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Hot Springs council approves 2024 annual report; council members point to large capital spending and deliberate cash use
Summary
The council approved the city's 2024 annual report; finance staff said overall cash balances and several fund balances declined because the city used cash to pay for capital projects rather than incur low-interest debt. Council scheduled an audit readout for May 19.
The Hot Springs City Council on May 5 approved the 2024 annual report as presented by the city’s finance officer, who told council the city’s cash balances decreased in 2024 largely because the city used cash to complete capital projects rather than borrowing.
Finance officer Misty said the city’s combined funds were down about $1.9 million year-to-date and the city’s cash balance decreased approximately $2.7 million. She explained the figures follow the Department of Legislative Audit’s required report format and that the headline numbers do not show the full story: during the year the city completed large construction projects and capitalized assets that increased long-term assets despite short-term cash decreases.
Why it matters: Council members framed the cash reductions as planned, prudent uses of reserves to avoid long-term debt payments where no dedicated revenue stream exists to service new loans.
Council discussion Alderman Bill Lukens and others noted the council intentionally used roughly $1 million from the general fund and about $590,000 from another fund to pay for a suspended sidewalk project instead of taking on a 10-year loan at roughly 1% interest. Council members said paying cash avoided saddling future councils with annual debt service without a clear revenue source.
The city also paid cash for a front-end loader for the streets division (about $251,000) rather than incur financing, council members said; they framed both decisions as conservative fiscal management amid rising construction costs.
Other finance notes and next steps Misty told council the water and wastewater funds took large construction-related hits but the water fund recorded a net gain ($254,000) after capitalizing infrastructure expenses. Council scheduled a full audit readout and discussion for Monday, May 19 at 6:30 p.m. for additional review.
Ending: Council approved the annual report, thanked finance staff for the highlights and directed staff to present the full audit readout at the May 19 meeting.
