March 8, 2017 Edition
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The Walnut Ridge Economic Impact Committee held a public information meeting Thursday night in Walnut Ridge to review findings it had made when researching the possible outcome of a Walnut Ridge and Hoxie consolidation.
The committee, made up of members Jon Walter, John Householder, Gail Jones and David Coker, was formed early in 2016 following the push to consolidate College City with Walnut Ridge.
Walter said one question was heard again and again after the College City consolidation. "Why can't we do this with Hoxie and Walnut Ridge?" The committee set out to project the outcomes of a consolidated Hoxie-Walnut Ridge and present the pros and cons for the public.
Presenting on the financials of a consolidation, Householder said, "It can be done, but it's up to you if it should be done."
Impact on budget
Figures presented were based on what a 2018 budget would look like for a consolidated city. Householder said there wouldn't be a substantial savings immediately but, should the cities consolidate, the long-term savings are expected to have a great impact. However, Householder said the committee focused on the initial budget required to run a consolidated city and how that compared with the cities as they stand now.
Some long-term benefits that were noted include the combined population and elimination of competition to attract new businesses. Also noted was the concept of economies of scale, a proportionate saving in costs gained by an increased level of production, and how it could save the cities to have combined expenses.
Comparing the two cities, Householder said there are some key differences that need to be noted when comparing the general funds of the two cities over the past few years.
He noted that Walnut Ridge's revenue has seen an increase every year from 2012 to 2015 while Hoxie's is declining. Householder said it appears Hoxie has been able to maintain its funds through control of expenses. Figures presented were acquired through state audits.
Projected 2016 figures were also presented, though the committee calculated them as the audit wasn't available for that year. Figures for 2016 showed an increase in revenue for Hoxie, but also an increase in expenses beyond what the city got in revenue. Walnut Ridge's 2016 revenue showed an increase and the expenses showed a decrease, based on the committee's findings.
Walnut Ridge owes close to three times the amount in debt and water and sewer bonds as Hoxie, but based on percentage of gross revenue, Walnut Ridge is about three percent higher than Hoxie.
The committee confirmed that there will be minimal impact on grants available to the cities.
While an immediate savings of about $250,000 to $300,000 is predicted, much of that would have to be used to address infrastructure.
Impact on departments
The committee spoke with all of the Walnut Ridge department heads when figuring how each budget would be affected should a consolidation take place.
The elimination of redundancies in both staff and equipment is expected to provide an initial savings that would make a combined budget smaller than the individual budgets for most departments.
However, the Hoxie Fire Department is working with about a 10th of the budget as the Walnut Ridge Fire Department due to its volunteer staff. The combined department would actually be higher than the budgets stand now.
The committee also noted that the ISO rating of the two departments would have to be addressed as Hoxie is at a class 5 rating and Walnut Ridge has a class 3 rating.
Sanitation rates in Walnut Ridge would go down to match Hoxie, and Hoxie's millage tax would be lowered to match Walnut Ridge. This would cause some loss of revenue for a combined city.
Impact on economy
With a combined population of 8,125, a consolidation would take Hoxie, the 24th largest city in Northeast Arkansas, and Walnut Ridge, the 17th largest and place the new city as the 11th largest in the region.
However, while Walnut Ridge and Hoxie are similarly ranked in sales tax as they are in population, a combined sales tax is only expected to rank as 16th in the region.
The higher population is expected to draw in enough new businesses to eventually make up this difference and increase sales tax.
Impact on name
Should a petition be passed to consolidate, it must also include at least two names that the newly consolidated city would be called. The names can be the current names, a combined name or a new name entirely.
However, no matter what names are on the ballot, if a consensus is not made by the two cities during the vote, the name will default to what the larger municipality is called.
No impact on schools
The committee emphasized that none of their research has shown that the consolidation would impact the current school districts of Hoxie and Lawrence County. Walter presented a map that showed how far reaching those districts are and also showed some areas in the county that are in the Westside district.
"School districts don't even follow county lines, so why would it be affected by the city lines," Walter said.
How consolidation works
The committee closed its presentation by explaining the consolidation process. A consolidation is only possible between two contiguous cities, meaning they share a border. A petition must be signed by 15 percent of the last mayoral vote of both cities. Walnut Ridge would require 220 and Hoxie would require 97.
The petition would then be recorded with the county clerk's office and be sent to both city councils to be ratified.
If a special election were called, it would cost about $25,000 and be paid by the larger municipality.
Following that, a third party would draw new wards and a new city council would be elected. A mayoral race is not required but may take place.
No petition reported
A resident at the meeting mentioned rumor of a petition being circulated. The committee said they were unaware of any petition.
County Clerk Tina Stowers confirmed that nothing has been brought into her office.
The Walnut Ridge Economic Impact Committee is planning another public meeting on March 16 in Hoxie. More information can be found on the Walnut Ridge / Hoxie Consolidation Facts Facebook page.
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