Fort Smith Board approves bond sales, sets priorities

Fort Smith city directors voted Tuesday night (Mar. 20) to authorize the offering of sales tax bonds that were approved by voters in last Tuesday’s (Mar. 13) special election.

The new bonds, which were part of the 0.75% cent sales tax passed by Fort Smith voters, will cover the following five projects:
• Refinancing existing sales tax bonds equaling $55.38 million;
• Wet weather sanitary sewer system work, $71.07 million;
• Water transmission system work, $28.12 million;
• Fire service improvements (Station at Chaffee Crossing, new fire equipment, renovation of older fire stations), $9.11 million; and,
• Construction of aquatics park at Ben Geren Park, $4.26 million.

The other 0.25% cent sales tax, which voters also approved last week, was not part of the bonds under discussion on Tuesday night.

According to a memo from Deputy City Administrator Jeff Dingman, the city intends to sell about 80% of the bonds in 2012 and defer selling the rest of them for about two years.

Four of the projects will be completely funded by the initial sale of 80% of the bonds, while sewer improvements will be only partially funded. The remaining 20% of the bonds will be sold in about two years; Dingman says this delay will help ensure that the city can meet IRS spend-down requirements.

Little Rock-based Stephens Inc. will underwrite 80% of the bonds, while Morgan Keegan & Company will underwrite 20%.

Directors were nearly ready to vote to approve the bonds when City Director Kevin Settle pointed out that the text of the ordinance showed the aquatic park bonds as $44.26 million, rather than $4.26 million.

Settle offered an amendment to change the figure to $4.26 million, and directors unanimously approved the ordinance as amended.

LEGISLATIVE PRIORITIES
Directors also approved a resolution establishing the City’s priorities for the 2013 Arkansas General Assembly.

The list of priorities will be submitted to the Arkansas Municipal League for possible inclusion in its legislative package. The Municipal League selects certain issues on which to lobby legislators, prior to the beginning of each legislative session.

According to City Administrator Ray Gosack, the city could still pursue other legislative priorities in the future, but they would not be part of the Municipal League’s package. He said the Municipal League could still unofficially support those priorities.

The City’s legislative priorities, as defined in this resolution, include:
• Shortening the filing period for candidates for mayor or director, from 20 days to 15 days, in order to give the city clerk more time to certify candidates;
• Eliminating the current state requirement that in a sales tax election, each purpose and project for which the tax will be used must be shown separately on the ballot; and,
• Clarifying current law to show that water supply operators (such as the City of Fort Smith) are not responsible for paying a land owner’s legal fees in an eminent domain trial.

Fort Smith citizen David Harris objected to the second of these priorities, saying the previous week’s election showed it was unnecessary to combine sales tax issues on the same ballot item.

Harris asked directors how they would feel if they were only given one up-or-down vote on all the items in their consent agenda — a list of resolutions in each board meeting that directors can approve all at once if they choose.

Gosack said if the legislature eliminated the requirement to display sales tax purposes separately, the Board would have discretion to display the purposes either together or separately.

Directors approved the list of priorities 6-1. City Director George Catsavis voted no.