Marshals Museum tax proposal to be considered by Fort Smith city board, directors offer thoughts on special election

by Tina Alvey Dale (tdale@talkbusiness.net) 893 views 

Updated rendering of the planned U.S. Marshals Museum under construction in Fort Smith.

The Fort Smith Board of Directors will consider a special election for a one-time, non-renewable, nine-month, one-cent sales tax to benefit the U.S. Marshals Museum at its regular board meeting Dec. 18.

The U.S. Marshals Museum requested the board to consider the election during its study session Tuesday (Dec. 11).

“With only $17 million left to raise, it’s time to ensure the USMM legacy is established as an anchor for economic development and impact in Fort Smith, as well as a hub for civic literacy across the city, the region, and the nation,” supporting documentation for the request included in the board packet for the study session stated.

Construction of the museum formally launched in July. The museum is expected to open in late 2019.

The museum is asking for the board to approve the appropriate ordinances that would set a special election for March 12 for a one-time, non-renewable, nine-month only, one penny sales tax, which would be levied beginning July 1 and would expire permanently March 31, 2020.

The United States Marshals Museum Foundation would pay the city’s cost for the special election.

The approximately $15-$16 million in revenues the tax would generate would go to finish the remainder of the USMM project, the information stated.

“The revenue from the requested sunset tax will be used to fund the production of the museum experience (exhibits), FFE (Fixtures, Furniture & Equipment), startup costs, working capital/cash reserves, and remaining contingency,” the supporting documents said.

The supporting documentation for the request also states that a Public Facilities Board comprised of community residents will own the USMM building and grounds and it will be outside of the control of the City of Fort Smith Government.

“The Arkansas Constitution and law enacted by the Arkansas Legislature require that public funds (proceeds from a Gross Receipts or Sales Tax) be expended for public purposes. If expended for a facility, the property may be owned by a ‘Public Facilities Board’ (PFB),” the documents said.

SPECIAL ELECTION REACTION
Jim Dunn, president of the U.S. Marshals Museum Foundation, said the board would be made up of five members originally appointed by the mayor. One position would serve one year, one two and one three, and two positions would serve five years each. When those positions were rotated out, the new members would be chosen by a process in which the mayor and board of directors filled the seat, he said.

Directors Keith Lau, Mike Lorenz and Don Hutchings said in the study session that they were in favor of the issue being placed before the voters. Director Andre Good said before the meeting that he also supported the issue being placed before voters since the city would not pay for the special election.

“I absolutely think this is an issue that should be voted on by the citizens of Fort Smith, and I support that. However, as a board of director I want to make sure that there is no liability back to the city’s finances,” Lau said, adding that he needs to better understand the role of a public facility board for the museum.

The PFB will be created by an ordinance passed by the board of directors, and that PFB would purchase the USMM building and grounds from the U.S. Marshals Museum, Inc., for the amount derived from the one penny sales tax for nine months.

The value of the building and grounds will be about $22 million, $7-8 million more than the estimated proceeds from the sales tax.

“The PFB, as owner of the Museum building and grounds, would lease these to the USMM. It would hold the USMM accountable for the performance of its many public purposes in education, economic, downtown, and riverfront development, and more. The rights and obligations of the PFB and the USMM would be spelled out in legally enforceable contracts,” the documents said.

Fort Smith City Attorney Jerry Canfield said the state statute that allows for a PFB does not require city control or city operation of a project given to a PFB and thus a provision can be added to a city ordinance that the city does not assume any responsibility.

The USMM board of directors would operate the museum, and neither the city nor the PFB would be responsible for future operational expenses of the museum, Dunn said.

While he said he supported the Marshals Museum, Director George Catsavis said he was not in favor of a special election.

“My constituents, their sticking point, is the term special election. They see that as a stacked deck,” Catsavis said. “They just want a fair vote. … I am personally against a special election.”

City Director and Vice Mayor Kevin Settle moved that the issue be put on the agenda of the upcoming board meeting. The motion passed 7-0.

Provided budget figures place the total project cost of the museum at around $49.266 million, down almost $10 million from estimates two years ago. The previous figure included over $5 million in land donations. Adding those back into the budget places the total project cost around $54 million, with the museum picking up about $4 million in savings through a design retool and value engineering, it has been previously reported.

The museum will feature five immersive galleries: Defining Marshals; The Campfire: Stories Under the Stars; Frontier Marshals; A Changing Nation; and Modern Marshals. It will also include a National Learning Center, Hall of Honor, conference rooms, general office space, retail space and a large lobby for community partnerships. Additionally, it will feature an exterior dining area, green-space, full-service restaurant, and a monument donated by the Five Tribes. Los Angeles-based Thinkwell: The Experience Co. are designers of the exhibit and will use subcontractors for the installations.

To date, nearly $35.4 million has been raised in cash, pledges and in-kind land for the project. Of that, 54% came from Fort Smith/Van Buren and 23% came from the state of Arkansas, information provided to the board of directors said.

“The majority of (the funding) is because of the vision of philanthropic individuals and organizations in this area who believe in what the USMM will mean for Fort Smith through its educational programming and economic impact,” museum provided documentation states. “The USMM building currently under construction, including the USMM campus and Hall of Honor has been funded through cash and pledges receivable currently in play. There is $17 million left to raise including an allocation for interest on potential loans that will not be necessary with public support.”

The USMM will operate on a $2.5 million annual budget. Current projections cap annual fundraising needs at $600,000 with the remainder of the required revenue being earned through admission, retail and food and drink sales, facility rentals and special programs and events, including spring and summer camps.

“We cannot let this fail,” Dunn said of the proposed tax. “It’s too good for the city, our education programs, to our people. We have to get this passed.”

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