Batesville officials review tight but balanced 2026 city budget

Aldermen review 2026 finances; city budget too tight to add firefighters, other employees, mayor says

By Andrea Bruner, White River Now

The city of Batesville will be passing a balanced budget, but it was not without difficulty, Mayor Rick Elumbaugh said last week.

The council met Tuesday in an informal budget meeting session to review figures as presented by Elumbaugh, who praised City Clerk Jessica Davis and Public Works Engineer Damon Johnson for putting in “a lot of hours on this budget.”

The city’s budget is broken into five categories: General Fund, $10.5 million; Operations and Maintenance Tax Fund, $4.07 million; Street Fund, $1.3 million; Water Fund, $8.5 million; and Wastewater Fund, $9.1 million.

A few highlights:

* Batesville Water customers will absorb a credit card transaction fee when paying their bills.

* The city will absorb an $80,000 health insurance hike for employees and grant a 2-percent pay increase.

* Bethesda Water members have voted to dissolve their association and move its 500 or so customers to Batesville Water, but that will barely affect the overall budget.

* IT (information technology) initiatives are projected to add thousands of dollars to the overall budget, due to risk management and related compliance issues.

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Overall, Elumbaugh said this budget was “challenging” at best. He said this is his 19th year to serve as mayor, and the city has continued to grow.

“When I started, the city had 109 employees, and now we have 150,” although in the summer that number jumps to 175 to 180. “It takes a lot to run this municipality.”

Furthermore, expenses from vehicle prices to building insurance have increased exponentially. Elumbaugh said the fire department bought a tower truck in 2007 for $750,000, but the price for that same truck is closer to $1.5 million now.

He also said the city had looked at adding employees, but could not “because it’s really that close. A lot of the capital, we’ve combed out.”

He said overall the general fund is about $40,000 “to the good,” then asked the council if they had questions.

Alderman Scott Fredricks asked about fees charged at the community center, and Elumbaugh said they have tried to keep memberships “very affordable. We did have to have an increase two or three years ago,” but said wages have also risen. For instance, in 2017, there were lifeguards making $8 an hour, but now they make $11-15, depending on the position.

“We even try to keep sports very affordable for the youth.”

Overall, he continued, “it’s probably not going to raise that much revenue. … Families face (financial) challenges as well.”

He said that at one time, the community center had over 8,000 members, and the city has instituted an autorenewal membership option that helps maintain the number of memberships.

Alderman Landon Reeves asked about the court automation revenue under public safety, showing a $6,000 budget for 2025, but year-to-date activity is at $180,000.

Court automation is a county fund. The city cannot spend any of that money. It only flows through the city, which reconciles the bank statements and pays the bills for them. The funds are earmarked for items that keep the court system automated, such as computers, paper, internet, etc.

“We used to not get our fine money from the county, but we do now,” Johnson said. He said expenditures will increase as well, but the city will keep about half of the revenue for the general fund.

Alderman Robb Roberts said he noticed several departments were budgeted at amounts basically for the same or less than in previous years, and Johnson said that, frankly, the departments had asked for much more, but as Elumbaugh said, “Someone had to be the Grinch.”

Elumbaugh said they always ask the department heads to prioritize their wants and needs lists, but that cuts must be made.

Roberts said that annualizing the street and fire departments shows that the departments were given a 2 percent increase from 2024, but actually spent 9 percent more. However, this year they are budgeted at a 6-percent decrease.

The police department’s salary budget was $1.04 million in 2024 and $1.09 million in 2025, but for 2026, that number is $1.36 million. Johnson said in the past, officers were allowed to accumulate “comp” (compensation) time for the overtime hours they worked, but were not able to use it. Chief John Scarbrough had proposed to him that “it’s a big morale problem when a guy works 50 hours and gets paid for 44,” so the city will be paying officers for their overtime instead.

Johnson said the figure is based on the officers’ schedule for 2026.

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Johnson said across the board, there are “heavy IT expenses” in the 2026 budget. He said the efforts to mitigate risks take money. “Five years ago, we never could have imagined we would be spending what we are.”

In addition, Johnson said there is a new line item called “Subscriptions ” for the computers in the city’s police cars.

“When the computers were added, even people who built those systems out did not understand the perpetual expense,” he said, comparing it to the fine print of a major purchase where you don’t find out about ongoing or extra fees associated with the purchase on the front end.

“No one knew those expenses were going to be there two years ago,” Johnson said. “It’s a load that keeps getting heavier.”

And that does not include the general IT for the police department, which was budgeted at $16,000 in 2025 but $52,000 in 2026.

The fire department had asked for six additional firefighters. The department has 13 (counting the chief), but the city eliminated the assistant chief’s position about three years ago when Mark McCollum was named chief.

“We had them (additional firefighters) until the very end (of the budget process),” Elumbaugh said. “We need six more, eight more.”

Johnson noted that the O&M Tax Fund is a separate fund from the city’s General Fund. The city passed a one-cent tax in March 2012 – half of which was temporary to build the community center and fund other improvements, and the other which was permanent and to be allocated to the parks department for the ongoing operations and maintenance of the community center. In addition, some of those tax funds would be allocated annually to the streets, police, and fire departments.

“Fire, police, and parks – none of those three generate as much as they cost,” Johnson said.

Under the O&M general expenses, the city budgeted $2.8 million in 2025, but it was $1.9 million in 2026. Law enforcement salaries out of the O&M fund were at $189,913 in 2025 and $217,284 in 2026. Firefighter salaries in the tax fund were stagnant, however, with $103,012 budgeted in 2025 and $105,144 in 2026. The fire department has a new rescue truck built into the O&M budget, at $250,000.

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The Street Fund, Water Fund, and Wastewater Funds are also maintained separately from the General Fund.

Johnson noted that revenues will rise in 2026 with the predetermined rate increases that will take effect next year. He said a rate study was performed two years ago with the new water plant taken into account. “We’re trying to be prepared when the new water plant goes online. … Small increases are easier on ratepayers,” Johnson said.

Alderman Lackey Moody asked how the city’s absorption of the Bethesda water system will affect the budget, and Johnson said the system’s approximately 550 customers will not “move the needle much,” but Batesville will have to start investigating the water lines’ age and so forth. He said he knows some PVC pipes have not aged well and are fragile.

He said the Bethesda system’s water loss is about 15-20 percent.

“Ours in the city of Batesville is about 10,” Johnson said, noting that number is very low for water systems.

“That is phenomenal,” Elumbaugh said, and that is even more so when one considers the city has pipes in the ground stamped with “1890” on it as a date, added Johnson.

The members of the Bethesda water association recently met and voted to dissolve the association and grant the customers to Batesville.

“There was one guy who was doing everything,” Johnson said. “They recognized that they would have to hire three or four people to take the place of one guy. That would have to make them raise the rates themselves.”

He also said many of the board members have been serving for decades and are ready to move on. With the dissolution, the next step will be for the Batesville City Council to approve a resolution accepting the Bethesda customers, then both systems will have to send a letter to the Arkansas Natural Resources Commission for approval.

Batesville has been selling water to Bethesda at a wholesale price, but now will collect the retail rate directly from the water customers.

Alderman Fred Krug asked if Cushman had made progress with the bill owed to Batesville, and Johnson said that it would be a project lasting several years. Cushman’s infrastructure is in such a state of disrepair that it loses about 80 percent of the water and cannot keep current with the bills owed to Batesville (around $1 million).

“These projects take two or three years to plan, fund, and get done,” Johnson said, noting that he is optimistic that at some point they will “see some significant reduction in their bill.”

Another item that will help the bottom line is the credit card transaction fee, which previously has been absorbed by the city water utility but will now be passed on to customers. However, Batesville Utility Manager Clint Crain has consolidated that service and negotiated a better rate (3.5 percent) that will be covered by the customers, Johnson said.

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Johnson said there is a sewer line rehab project in 2026. “That’s actually the last official project associated with the Consent Administrative Order from the ADEQ,” he said.

He said the city has been dealing with the CAO for 18 years and was required to spend tens of millions of dollars to bring the wastewater treatment plant and collection system up to code.

“Our wastewater was in pretty rough shape in 2007, and now it’s one of the best in the state,” he said. “Cushman, they’re in the same situation with their water; they’ve got about a 20-year project ahead.”

Now the Batesville utility is looking at updating water meter readers, and that could be around $5 million, Johnson went on to say. “We have not budgeted that; we want to do the study and look in-house at how to do that.”

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Elumbaugh closed by reiterating that Batesville is not the only city with financial “challenges” and noted Russellville, for instance, did not give employee raises.

The council is scheduled to approve the budget at its regular session at 5:30 p.m. Tuesday, Dec. 16.

File image: Gena Tate, White River Now