The city's best investments are already on the table

An investor asks one question before spending a dollar: what do I get back? A city should ask the same question about every decision it makes. Some moves return a few percent a year. Some return a hundred times what they cost. A few cost nothing but staff time and a phone call.

On Wednesday I wrote that the city too often answers a shortfall by charging residents more (A city should give back more than it takes). This piece is the other half of that argument. I asked a simple question: if Helena-West Helena treated every decision as an investment, where are the best returns? I went through the city's audits, treasurer's reports, council meetings, and state and federal funding records to find out.

The answer surprised me. The best returns are not new projects. Most of them are paperwork.

1. Money the city has already won

These are the highest returns on the list. The money is already awarded. What is left is closing the paperwork and drawing it down.

$9.75 million in water-loan forgiveness. In November 2024 the state approved a drinking-water package for the city: a $3.25 million loan plus $9.75 million in principal forgiveness, which works like a grant state records. The state's newest funding plan, sent to the EPA in September, still lists it, with an estimated closing date of August 31, 2026. I have found no record that the loan has closed. The state's September list also places the city's water system in fiscal distress, along with 62 other large systems that came due for a rate-study review this summer. While a system is on that list, it needs the state's written approval to take on new water debt. Closing this loan runs through that approval. Until it does, the forgiveness does not flow, and the state's rules let it move money to the next ready project.

A $4.5 million federal water grant. Congress directed $4.5 million to the city for water rehabilitation. Federal spending records show nothing obligated yet EPA grant. In July the council voted 6-0 to ask the EPA to waive the local match 1:31:08. That waiver alone is worth roughly $900,000 to $1.1 million (an estimate of the 20 percent local share). That vote was the right move. The next step is making sure the request reached the EPA and the grant gets obligated.

The police hiring grant. The city won $1,019,756 in 2021 to hire 10 officers. Federal records show $500,323 drawn when the grant period ended on September 30 federal award record. Federal rules allow 120 days to draw for costs incurred before the end date. That window closes around late January. Whatever the city can properly claim, it should claim.

2. Money the city already holds

Cash that should be earning. At the end of August the water department had about $1.9 million in its operating account. From January through August it earned $226 in interest treasurer's report. Arkansas law lets cities buy U.S. Treasury bills, which paid about 4.15 percent on October 8 Treasury rates. Putting the cash the water fund does not need day to day into Treasury bills could earn tens of thousands of dollars a year (about $38,000 on $928,000, an estimate).

Trash fees owed to the city. The water fund's August balance sheet lists $2,018,208.79 "Due to Sanitation." The water system's own audits describe it every year as trash money owed to the city city records. That is residents' trash fees, collected on their water bills, sitting in another fund at no interest.

This year the sanitation fee brought in $778,313 from January through July. The sanitation department spent $426,273 treasurer's report. Part of that gap is missed pickups while the trucks were down. But the fee is not falling short. In 2024, sanitation money owed to the general fund went to a truck payment, a pension payment, and a police grant payment along the way. In July the council was told plainly, "sanitation fees have always funded other departments" 0:54:34.

When a fee quietly pays for other things, residents lose track of what they are paying for. My view is simple. The trash fees should reach the city the month they are collected, and the old $2 million should be paid back on a written schedule set by ordinance, out of the water fund's surplus. Sanitation should have its own fund, created by ordinance, so residents can see what their trash fee buys and the money cannot be borrowed again. Money set aside should buy trucks before the trucks fail. And if sanitation money can earn more by paying down a city debt, such as the IRS balance at 7 percent interest plus penalties, that should be done openly, as a recorded loan from sanitation to the city, with terms and a payback schedule. It is the people's money. The books should say so.

What the city's debts cost

An investor starts with the price of money. Here is what the city's debts cost, next to what its idle cash could earn.

The lesson is in the spread. Every dollar sitting idle while the city carries 7 percent or higher debt costs money. Paying off the 1 percent water loans early would lose money. Paying down the IRS and pension arrears would save it.

State aid that stopped. In September 2024 the state stopped sending the city its general turnback, because the city fell behind on police and fire pension payments state records. About $300,000 is left on the pension catch-up plan, which is set to end next April, according to the treasurer at the October 6 meeting 0:03:42. Every month the plan stays open holds back about $9,750 in state aid. That makes paying it off early the best return on this list: about 3 percent a month on the remaining balance (an estimate). The state can also withhold turnback when a water or sewer audit runs more than 18 months late, so the city's water audits need to stay current too.

3. Deals worth reopening

The jail tax. Before 2020, a countywide 1 percent sales tax funded the harbor and the cities. It was set to expire in June 2020. In December 2017, county voters approved a permanent 1 percent tax in its place, with 5/8 going to the county for the new jail and the rest to the cities jail records. City officials have said the change costs Helena-West Helena about $600,000 a year 0:10:19. That figure assumes the old tax would have continued. It was set to end, so without the vote the city's share would have ended too. The jail tax also pays the county's jail bonds through 2043. Since then the state has leased the jail and runs most of its beds; the county keeps about 20 and still maintains the building. If the county's cost to run the jail has fallen, the cities can fairly ask whether some of the tax can come back to them once the bonds are protected. No court will order it. It is a negotiation, and it is worth having.

Renting instead of owning. Through July, the landfill had spent $208,596 on equipment rentals against a $5,000 budget. The budget set aside $530,441 to lease-purchase equipment, and nothing has been booked to that line. The city's own 2024 comparison found that lease-purchase saves about $80,000 a year over renting city records.

Insurance. The city spends more than half a million dollars a year on group health coverage alone. Shopping it, and taking sold or repossessed equipment off the property and vehicle policies, is routine work that could save tens of thousands a year (an estimate).

4. Spending that pays for itself

Some investments do cost money up front. These pay back.

Buying sewer pumps instead of renting them. The city has rented emergency bypass pumps for at least four years. The water superintendent told the council a new pump costs about "$20,000, $30,000" 1:00:24. The state's own inspection found the rented pumps need diesel twice a day state order. A pump that pays for itself in months is an easy call.

Fixing leaks. The water superintendent has said the city still loses about 30 percent of the water it treats 1:19:30. Every gallon that leaks out was paid for in power and chemicals and never billed. Each point of water loss the city wins back is worth tens of thousands of dollars a year (an estimate).

5. What does not pay

The same test also says no. At the October 6 meeting, reopening a city jail came up as an idea. Run through the numbers, it does not pay yet. The city held only a few prisoners a day in recent years, and a jail needs round-the-clock staff to meet state standards. Running one would likely cost far more than the city now pays to house prisoners elsewhere (an estimate; real prisoner counts and renovation costs are still needed). And the jail tax would not come back, because it is pledged to the county's bonds through 2043.

Paying off the city's cheapest loans early is also a loss. Some state water loans carry 1 to 2.55 percent interest. Cash earns more than that in Treasury bills.

What it adds up to

If the city finished the fixes in this piece, I estimate it would save or recover about $650,000 to $1.3 million a year (an estimate; one-time money not included).

About $360,000 to $490,000 of that is in the general fund. It comes from paying down the IRS balance, finishing the pension catch-up so state aid resumes, buying landfill equipment instead of renting it, shopping insurance, and paying off the state withholding balance. That is about 5 to 6 percent of this year's $7.7 million general fund budget (2026 amended budget, general fund spending $7,709,073).

The rest is in the water fund. It comes from buying sewer pumps instead of renting them, fixing leaks, and investing idle cash.

These are estimates, and some depend on work the city has not yet priced. The one-time money comes on top: $9.75 million in loan forgiveness and a $4.5 million grant.

Clearing the way for new money

New grants come after the basics are in order. State and federal programs look at a city's audits and reports before they award money. The state environmental agency's notes tie the city's denied $14 million sewer request to items the city still owes under its state order state notes. The same agency noted the city had not contacted Communities Unlimited, a nonprofit that helps small towns with water projects at no cost. Free help is sitting unused.

What I want to do

1. Keep a ranked list. Every money-saving or money-recovering move, with what it costs, what it returns, and who is responsible.

2. Finish what's already won first. Close the $9.75 million forgiveness, get the $4.5 million grant obligated, pay off the pension plan early to bring back state aid, and claim every eligible grant dollar before the deadline.

3. Put idle money to work, in the open. Invest cash the city does not need this month. Pay the trash money back on a schedule, and give sanitation its own fund. If one fund lends to another to pay down expensive debt, record it as a loan with terms.

4. Review the list every quarter, in public. Residents should be able to see what was tried, what it returned, and what is next.

A city that treats its decisions as investments asks residents for more only after it has used what it already has. Most of what I found does not need a new tax or a new vote. It needs follow-through.