Can-do North Little Rock, the city that runs handsomely (a showcase park, sharp city services) on profits from its electric customers, seems to be facing a financial disaster, though the coverage this morning in Democrat-Gazette seemed remarkably restrained.
Here's the essence:
The city currently pays $39.3 million per year for wholesale electricity.
A new contract, approved by the City Council last night, will more than double the cost, adding $40 million per year.
Under the current rates, the city gets $13 million a year in "profits" (a hidden tax) that pays for fully one-fourth of the city general operating budget.
The rate increase eats up the "profit" and leaves $27 million more to be covered. You can raise rates 66 percent to produce that money. Or you can reduce city spending by 50 percent. Or you can do some combination of the two, still inflicting deep wounds on both ratepayers and city services..
The mayor is talking about "other sources of income." That starts with T, which rhymes with P, which stands for TAX. It will be a hard sell, the city just having committed a penny sales tax to a minor league ballpark of dubious revenue producing potential. The vaunted NLR leaf truck may have made its last rounds.
Or maybe the mayor has a TIF plan to poach still more school revenue, in addition to what he already wants to nab to build Bruce Burrow a shopping center, pay for road access, etc..
What's wrong with this picture?