Dingman: Sales tax money for parks and recreation legal to use for water slides

Sales tax money dedicated to Fort Smith’s parks and recreation capital projects can be used to install water slides at Parrot Island Waterpark, and the parks and recreation tax revenue has been used in previous waterpark upgrades.

That’s the assessment of Acting Fort Smith City Administrator Jeff Dingman who said legality of the tax revenue use was confirmed by Taylor Marshall and Shep Russell III, attorneys with Little Rock-based Friday, Eldredge & Clark who specialize in public finance law and municipal bonds.

Acquisition and installation of five slides at the waterpark have been a hot topic for almost two years. Proponents say the park expansion will be a popular amenity with city residents and have a positive impact on the regional economy. Opponents allege that the process lacked transparency and that the city has more important financial priorities.

The water park opened in 2015 at Ben Geren Regional Park, which is owned by Sebastian County. Its initial construction cost was shared jointly by the county and the city.

The Fort Smith board initially voted in mid-2024 to spend $2.1 million on the slides and installation, with Sebastian County expected to also spend $2.1 million. The Sebastian County Quorum Court voted against buying the slides. The Fort Smith board voted in September 2024 to pick up the other $2.1 million and continue with slide purchase and installation.

It was learned in October 2025 that the cost to install the five slides would push beyond the $4.2 million. The board voted Jan. 20 on a $2.689 million plan to finish the project, with Fort Smith-based Royal Ridge Construction awarded the work outside of competitive bidding. Part of the $2.689 million includes $760,000 from interest earnings on accumulated sales tax revenue dedicated to parks and recreation capital projects. A lawsuit has been filed seeking to block installation of the slides.

When questions emerged about the use of parks and rec sales tax revenue to install the water slides, Deputy City Administrator Maggie Rice asked Colby Roe, an attorney with the Daily & Woods firm that handles the city’s legal matters, for an opinion. Roe said in an email dated Oct. 28, 2025, said the city’s partial ownership of the waterpark creates uncertainty.

“While it may be asserted that installation of the subject waterslides would constitute a ‘park and recreation capital improvement project,’ we are concerned that use of the subject tax proceeds for that purpose could be challenged on the basis that Parrot Island is not a park owned solely by the City – it is owned jointly with the County,” Roe noted. “As such, one could assert that the use of the subject tax proceeds for installation of the waterslides in a park owned partly by the County is an illegal exaction. At this time, we are not able to provide an opinion on the validity of such a challenge to the use of the subject tax proceeds.”

Indeed, the city and county jointly own the property, but the city has joint possession of the property only as long as the waterpark is active. According to Sebastian County Judge Steve Hotz, property ownership reverts back to the county if the waterpark were to permanently close.

Dingman said during a Feb. 13 interview that Roe’s initial review was not a complete opinion, and that Roe didn’t at the time have all the info needed for a complete review. Dingman said the city purposefully created the ownership arrangement with the county so that the city could use parks and recreation sales tax revenue for waterpark expansions.

He said Marshall reviewed the voter-approved ordinance establishing the sales tax and the city’s property arrangement with the county and said tax revenue can be used for the waterpark. Dingman said because Marshall provided the opinion in person, there is no written opinion to provide as sought in a Freedom of Information Act request by Talk Business & Politics. Dingman also said Daily & Woods confirmed through conversation that the water slides were an appropriate use of sales and use tax proceeds. (Talk Business & Politics has asked the city for an updated opinion in writing from Daily & Woods.)

Dingman said parks and recreation sales tax proceeds were used to pay for more than $1.4 million in waterpark expansions in 2019 and 2021.

“At no time during the initial project or the subsequent expansion projects did the topic of the city’s ownership of the property come into question,” Dingman said in a note to Talk Business & Politics. “The original steps were to annex and acquire ownership interest as tenants in common with the county (both the city and county are owners of all of the property, the city doesn’t just own a 50% interest) specifically to address that city-ownership requirement. … As this is a parks amenity owned by the city, it is appropriate to consider the use of the Parks SUT proceeds (including interest earned on those proceeds) for this purpose, especially as it has been deemed appropriate by the Board.”

Fort Smith City Director Christina Catsavis, who has opposed the water slide expansion, doesn’t share Dingman’s certainty.

“Since Parrot Island has not historically been classified under the Parks Department and has instead been treated as an attraction, I have been concerned (that) the use of that interest money was improper,” she said.

The city’s Parks and Recreation department website does not list Parrot Island Waterpark as one of the city’s parks.