The Jonesboro City Council last week voted to reduce its fund reserve requirement amount from 30 percent to 15 percent, which will free up about $5.44 million.
The lower rate is in line with recommendations from the Government Finance Officers Association and the Arkansas Municipal League, said Jonesboro’s finance director, Jim Barksdale.
Barksdale also said he had been lobbying for the change. The city handcuffed itself by having a more restrictive resolution than required, he said.
The move should help the city, which has seen its revenue drop and expenses rise in 2009.
As of the end of October, the city had revenue of $47.2 million, which was 12 percent below the same period in 2008. The city’s sales tax revenue was down seven of the last eight months, the report said.
In addition, the city spent $49.1 million from January through October, an increase of $2.8 million from the same 10 months in 2008, according to a city financial report.
The main expenditure was salaries, accounting for $16 million between January and October, an increase of 6.2 percent over the 2008 period. The city had 546 employees in 2009 compared with 525 in 2008.
The city recently laid off seven employees in an effort to save money, said Mayor Harold Perrin.
Perrin said he didn’t expect more layoffs, but when a city employee leaves, that position will be examined to see if it needs to be refilled.