HomeMy WebLinkAbout1988-10-03 Minutes•
MINUTES OF A SPECIAL MEETING OF THE CITY BOARD OF DIRECTORS
A special meeting of the Fayetteville City Board of Directors was held on Monday,
October 3, 1988 at 8:30 a.m. in Room 326 of the City Administration Building at
113 West Mountain Street, Fayetteville, Arkansas.
PRESENT: Mayor Johnson; Directors Bumpass, Marinoni, Lancaster, Hess and
Martin; City Manager Pennington, City Attorney McCord, City Clerk
McWethy; members of the staff, members of the press and audience
ABSENT: Director Kelley
Themeeting was called to order by the Mayor, with five Directors present 303.
(Director Bumpass arriving after the meeting began), for the purpose of (1)
review and discussion of the proposed City of Fayetteville Capital Improvement
Program. and (2) consideration of an ordinance which would continue the levy of
the existing local sales and use tax; and which would call and set a date for an
election to refer said levy to a vote of the people.
PETITION CERTIFICATION
The. Mayor ,said that, before the Board began discussion of the Capital Improvement 303
Program, the Board wanted to talk briefly about whether the City Clerk should
certify the petition to the Election Commission (referring to the citizen
petition to abolish the Dickson Street Central Business.- Improvement District).
She said the Board received an Attorney General's opinion which indicates it is
the wrong type of petition. Johnson said the opinion stated it should have been
a referendum instead of initiative petition. She said the opinion also stated
this was an administrative rather than a legislative concern. She asked if the
Directors had any response to the opinion.
Marinoni said, according to the opinion, "we are not duty-bound" to turn the 303
petition over to the Election Commission. Marinoni moved that "we do not turn it
over to -the Election Commission." -The motion was seconded, by Martin.
In answer to questions from Hess, City Attorney McCord told the Board that 303
Amendment 7 states %that the City Clerk shall make a determination on the
sufficiency of the petition. He said the Clerk did determine that the petition
contained the requisite number of signatures, and the City Board then requested
an Attorney General's opinion on whether the measure was a proper measure to be
placed on the ballot, because the City Clerk was under a legal obligation to
certify the petition to the Commission, since it contained the requisite number
of signatures. McCord said the Attorney General's opinion states "the
Fayetteville City Clerk is under no obligation to certify the petition in this
instance." He said he didn't think the staff wanted to instruct the Clerk not to
certify a sufficient petition, commenting that the Board was the ultimate
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October 3, 1988
304.1 supervisor of all City employees and could so instruct the Clerk if it desired to
do so.
304.2 Hess said the opinion indicated that the formation of improvement districts was
an administrative, not a legislative, function and the Board didn't have a
legislative duty to disband the district. McCord said the Board would not be
disbanding the district but the Clerk would merely be certifying the petition to
the Commission, and the Commission could choose whether or not to place it on the
ballot. He added that the Attorney General's opinion was just an opinion and did
not have the force and effect of a judicial decree.
304.3 [Director Bumpass arrived at this point in the meeting.]
304.4 Martin asked if the language in the opinion - "under no obligation" - meant the
Board could allow the Clerk to certify the petition if it wanted to do so.
McCord said that was correct. Martin remarked that this was vague and asked
McCord if he could speculate on the reason for that vagueness. He said it seemed
to him the matter either was or was not a proper matter for a vote. Martin said
he was concerned about placing a matter on the ballot that would have no effect,
since the opinion states that the Board does not have the legislative authority
to disband the district.
304.5 Attorney Larry Froelich addressed the Board, stating the petition was called an
initiative rather than a referendum. He said, if the. Board decided it did not
want to submit the question to a vote, he would like the Board to clarify whether
or not it is because they put the wrong word on the petition, or for other
reasons. Froelich said in the past improvement districts were traditionally used
for things such as paving and electricity, and not for things they are used for
now, such as business parking and other things which are allowed under more
recent statutes. He said he believed improvement districts will be subject to
initiative and referendum. He said that was an ambiguity in the opinion.
304.6 Froelich said it seemed to him this was a matter to be subject to the
consideration of the people in the community. He said he believed the Board as a
group was tending to appear less than fully considerate of the controversy and
obvious shortcomings of the district, and was engendering, amongst a growing
group in the community, a settled bitterness over the issue. Froelich said he
thought this would, in time, reach the level of discourse that unfortunately
characterized the struggle over the incinerator project.
304.7 Froelich said he found it extraordinary that the Attorney General's opinion was
requested by the attorney for the district at a session where the matter was not
on the agenda and which was not a regular Board meeting. He said the matter of
one Board member coming before the Board to be the driving force behind the issue
was a matter, if not a conflict of interest, of apparent impropriety that "smacks
of insider dealing."
304.8 Froelich said if the Board had applied the level of scrutiny to the initial
petition (to form the district) that it applied to the initiative petition, it
would have discovered the district's petition didn't even have the requisite 67%
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October 3, 1988
of the appraised value of the district, and would have found out that there were 305
signatures on the petition of persons who did not have the authority to sign the
petition. He said the Board would have noticed that many pre -conditions had not
' been met, including individuals• not being notified. He said in this lack of
scrutiny the Board was showing favoritism that is not healthy for the overall
community.
Froelich said it was in the best interests of the political health of the 305
community that the Board place the matter on the ballot. He said it was his
legal opinion that it would have the effect of abolishing the district. Froelich
asked the Board to consider how this all looked to the group of. citizens who are
being subjected to a tax, and who have been told by the district that they can't
get copies of documents because the district is not subject to the Freedom of
Information Act. He said the district meetings are not open and citizens cannot
find out where meetings are or what goes on in their meetings. He said his group
found out the district has the apparent authority to expand its projects
indefinitely, that commissioners are not subject to recall, and the district's
projects are not subject to public scrutiny.
Froelich said about 1800 people signed the petition, over 1300 signatures were 305.
proven:to-,-:be registered voters, and it should be put to a vote so -the Board can
find out where the public stands on how the district was put together and the
principle behind it. Froelich said he believed City Manager Pennington was
quoted in the paper as saying he preferred to have ,_the matter put -to a vote.
.Pennington responded that he did not feel it was the City Manager's
responsibility to instruct the City Clerk to place the matter on the ballot and
would allow the Board to make that policy decision.
Cyrus Young,, speaking from the audience, said it was stated in the Attorney
General's opinion that the City .Board was obligated to approve"improvement
districts "if all prior conditions had been met." Young said at the Board
meeting where the district was approved he told the Board that all the conditions
had not been met. He asked that the Board place the matter on the ballot.
Bill Stiles, speaking from the audience, asked what
their petition is ignored. He asked how the attorney
sit on the Board and guide and direct it, when he has
said if the Board didn't see ;a conflict of interest
ones who didn't see it.
305.
recourse citizens have when 305.
who formed the district can
a $50,000 fee at stake. He
there, they were the only
Hess said he didn't think the issue was whether there appeared to be a conflict 305.
of interest. He said the issue at stake was whether or not the petition is moot.
He said, when the Board approved the district, he was acting in an administrative
capacity. He said the Board's hands were tied and when they heard appeals, they
were following rigid criteria. Stiles said the district assessors lowered some
property owners' taxes "by $10,000" because they signed a paper promising they
would not fight the improvement district. He said the rules stated the only way
assessments could be lowered were if an owner proved to the Board that they had
been incorrectly assessed. Hess said if the Board had wanted to grant everyone a
substantial reduction, they couldn't have done so because they had to adhere to
October 3, 1988
306.1 the rules. Hess added that the guidelines for forming improvement districts may
not be proper or just, but the Board had no control over that. Hess said, since
he did not know the law, he was relying on the opinion of the Attorney General
that placing the question on the ballot would not have any weight. He said it
was unfair to dupe people into thinking their vote is going to mean something,
when in reality it doesn't mean anything.
306.2 Froelich asked the Board why, instead of hiding behind an ambiguous opinion, they
didn't step forward and fight for the rights of the citizens of Fayetteville to
be able to have a voice in the matter.
306.3 Mayor Johnson said the Board had no impetus in how the boundaries of the district
would be drawn. She said the Board had a certificate from an abstract company
certifying that the correct number of signatures was contained on the petition to
form the district. She said, based on that information, the Board approved the
district. She said appeals were filed by some property owners, the assessors met
for two days with those who chose to meet with the assessors. She said, in
addition, the Board reviewed the appeals using a set of rigid criteria. She said
many who spoke simply stated they were opposed to the district and gave the Board
no figures on which to base a lowering of their assessment, although she said the
Board lowered one assessment. The Mayor said the initiative petition "goes
against State law" in saying "...now we're going to let you vote on it, but
whatever you vote for is not going to make any difference." The Mayor said there
was a legal remedy for the citizens in circuit court.
306.4 Director Marinoni said in his opinion, it was out of balance for people in other
parts of town to dictate to the people on Dickson Street what they're going to do
with their money and what's going to happen on Dickson Street.
306.5 Froelich asked if the Board ever asked the City Clerk to determine whether the
required number of signatures were contained in the petition to form the
district, commenting the Board had the Clerk check every signature on the
initiative petition. The Mayor said checking the signatures on the petition to
form the district was not the function of the City Clerk, but of the abstract
company.
306.6 Upon roll call, the motion passed, 5-0-1, Bumpass abstaining and Kelley absent.
306.7 The meeting recessed at 9:15 a.m. and reconvened at 9:25 a.m.
CAPITAL IMPROVEMENT PROGRAM
306.8 Scott Linebaugh presented a report on a proposed five year Capital Improvements
Program (1989-1993). He explained that the types of funding which would be used
to pay for the projects would come from (1) a sales tax bond issue; (2) sales tax
revenue; (3) a water and sewer revenue bond issue; and (4) operating funds.
October 3, 1988
307
He told the Board that it had been determined that $105,118,469 in projects are 307
needed in the City over the five year period. He said $16,198,679 are not
recommended for funding for the period. Of the. remainder, Linebaugh presented
two alternative proposals for the Board's consideration.
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Option.A was presented which proposed that $46,700,339 of the projects be funded
through a City sales tax. Of that amount, $10,000,000 would be reserved for use
by the Fayetteville School District.
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Linebaugh presented highlights of proposed sales tax projects and their estimated 307
costs. These were:
Economic Development
Animal Shelter
Police Facility Remodeling
Fire Equipment
Fire - Station Relocation
Library Expansion
Parks Improvements
Water - New 36" Line
Sewer System Rehabilitation
Street Construction
Bridge Replacement/Improvements
Drainage Improvements
Maintenance Center
Sanitation Equipment
Airport T -hangars
Recycling Disposal Program
Public School Construction
3,000,000
100,000
75,000
340,000
265,000
500,000
503,545
7,750,000
5,100,000
10,300,000
750,000
2,162,000
500,000
1,056,000
468,000
3,000,000
10,000,000
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Option B was presented which proposed that the entire $46,706,339 be reserved for
City capital improvement projects, with no funds to be reserved for the schools.
Linebaugh said that, if the Board chose not to fund the schools, the following
projects could be accomplished with the $10 million:
Water system improvements
Sewer system improvements
New operations area'•
Computer mapping
Street construction
Bridge replacements/improvements
Elevated water storage
$ 600,000
500,000
1,400,000
419,000
5,264,000
1,142,000
675,000
[The program in detail was published in written form, distributed to the
.Directors and media representatives, and is on file in the City Clerk's Office.]
In answer to a question from Director Marinoni, Linebaugh said $10 million to pay
off the incinerator was not included in the program The Mayor said the revenue
for that, will be generated from increased sanitation fees rather than from the
sales tax.
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October 3, 1988
308.1 Director Bumpass asked what assumptions were made regarding changing operations,
such as the use of private contracts for street construction and sanitation
pickup. Pennington said the direction to the Public Works Department is to move
to private contractors, particularly in the areas of street paving and water and
sewer operations. Pennington said the sanitation area has not been settled on,
commenting that this was a policy matter.
308.2 Bumpass asked if the staff was proposing that some of the bond proceeds would go
into an operating fund. Linebaugh said the City would use operating revenues to
pay for capital. He said some of the sales tax would be used for capital
improvements. Pennington said under Option A about $500,000 would go from
General Fund to capital projects.
308.3 Bumpass asked if there would be any reduction in City staff as a result of going
to the private sector for some of the City operations. Pennington said he did
not envision that, because employees would be transferred to other projects which
will be proposed that have never been done before.
308.4 Director Martin asked how the staff had arrived at the figure of $10 million for
the Fayetteville School System. School Superintendent Winston Simpson said,
based on the recommendations from a citizen advisory committee, $10 million would
pay for an addition to the existing high school, the construction of a ninth
elementary school and approximately $2 million toward renovation recommended for
secondary schools.
308.5 Martin asked if an addition to a building would qualify for City funding. City
Attorney McCord said the necessary legal requirement would be met to do that.
308.6 Director Martin asked what the recent 6 mill increase would be used for. Simpson
said 3 of the mills would fund construction of additions at two junior high
schools and the other 3 mills will be used to fund capital outlay items for the
school system.
308.7 Larry Bittle, speaking from the audience, said the citizens advisory committee
felt that splitting the funding in cooperation with the City would help keep
Fayetteville economically competitive. He said the committee's number one
recommendation was to pass the 6 mills now, and then request the additional City
funding. Bittle said the proposal before the Board for funding the schools was a
"bare bones approach" and if there is a major growth in Fayetteville, the
projections for funding will not take care of the school's problems.
308.8 Martin said, philosophically, it was wrong to use sales tax to provide for
schools, but said he could support it because it was the only way to meet a
crying need. Martin added that his support was predicated on this being a "one
time thing" to help the schools "get over a hump."
308.9 Hess said he thought Fayetteville was at a disadvantage in term of the moneys
that an increase in millage can generate, because of the restrictive size of the
Fayetteville School District. He said that the school district received no
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October 3, 1988
benefit from all the money that is generated at the Mall, since those revenues go 309
to the benefit of the City of Fayetteville. Hess said he believed Fayetteville
was at a high level of millage right now and thought increases in millage could
' become an economic detriment to the City. He said he didn't know how you could
separate the school system from the City, remarking that they were integral parts
of each other.
Ed Fryar, school board member, said the intent would not be to come back later to 309
the City and request more funds but instead would be to ask the public to vote
for some tax other than a property tax. He said the sales tax being proposed now
would be a permanent sales tax and revenues will increase over the years. He
said, although this would fund a $46 million bond issue in the first year, by the
seventh.year about $62 million in bonds will be generated.
Linebaugh said that, although a five-year program is proposed, it will be paid 309
for over a twenty-year period.
Director. Lancaster said this proposal is just one way to "get the foot in the 309
door" to the City Board to finance the school system, and said he found out it
was illegal in Arkansas to turn over sales tax money to the school board. He
said. het-rW6 -rdrather see the City Board put an ordinance on the ballot for a
sales tax directed to the school system. 'Lancaster said he didn't think the City
government and the School systemshould be mixed.
Larry Bittle said the 23 mills proposed to the voters a couple of years ago, and 309
which was defeated, was for a brand new high school. He said that is not being
proposed now. , He said the legal issue was that the School Board cannot pass a
sales tax, that it was not illegal for the City Board to convey property or money
to school projects.
Director Marinoni- said he hadn't made up his mind yeti. He asked if the City 309.
proposed .to build an addition to the high school and would then propose to lease
or rentthe building to the school system. He asked if the school system was
going to be in the position to make any payments if necessary. City Manager
'Pennington said there were several options, and the one most appropriate would be
a legal gift to the school.
Larry Bittle said The Niblock Law Firm had prepared an opinion on the sales tax 309.
issue which states that, although the school cannot pass a sales tax, the City
may pass a sales tax and may legally convey funds or property to the school
system.
School Superintendent Winston Simpson said he thought funding school construction 309.
and renovation with a combination of property tax and sales tax is perhaps the
only option for the City of Fayetteville, and the best choice in the light of the
economic development issue.
Simpson encouraged the City Board to approve the $10 million for the schools, and 309.
asked that, if a greater sum can be generated in a shortperiod of time, the
October 3, 1988
310.1 schools be included for funding up to another $5 million in projects recommended
by the advisory committee.
310.2
Simpson told the Board the plan projected by the advisory committee encompasses
school facilities and operating funds up to the year 2,000, and will provide
housing for approximately 800 more students than what was proposed in March of
1987. He said, under the 23 mill proposal in March, 1987, it was proposed to
build two junior high school additions, a new high school, a renovation of the
existing high school, a renovation of the west campus to use as an administration
building with the vocational classes being moved to the current east campus, and
a renovation of the athletic facility. He said these projects were projected to
cost about $22 million. He said, in addition, 8 of the 23 mills were to be for
maintenance and annual operation funds. He said that proposal and the new
proposal were very different. He said he felt the new proposal was not an
attempt to get something past the voters, since they would have to vote to
continue the one -cent sales tax, and would have to vote on each bond proposal as
well.
310.3 Simpson asked that some city and school representatives meet in the next few
hours regarding how the two groups would relate to each other on matters such as
planning, supervision, construction, conveyance of facilities, placing the issue
on the ballot, and attempting to inform the community about the conditions of the
proposal.
310.4 Mayor Johnson said she viewed this as a $10 million investment but did not see it
as a "never-ending pit where somebody keeps coming back with a bucket."
310.5 Fred Hanna, speaking from the audience, said he represented a group of citizens
for fair taxation who were opposed to the 23 mill school tax in March of 1987.
He said they were in favor of the current 6 mill increase and would like to be in
favor of the one -cent sales tax, so the schools can receive a portion of it.
310.6 Director Bumpass said he never conceived of a five-year capital improvements
program which would be funded by a permanent sales tax. He said it was always
his impression that there would be a number of issues on the ballot for various
projects. He said the City tried to pass a local sales tax that would have been
an impediment to economic development because it would have put all the retailers
in a competitive disadvantage with other cities and counties. He said, after
that tax was defeated, the city got the authority to enact a county/city sales
tax. He said that tax met the needs of the retailers by putting a cap on the
amount of sales tax which could be collected on any one item, and allowed the
county to share in the revenues.
310.7 Bumpass said the only way he would be in favor of the funding for the schools
would be to isolate the $10 million for the schools as a "one-shot deal."
Bumpass added that he would be in favor of using sales tax money to pay off the
resource recovery bonds that have been spent so far, versus having increases
sanitation rates. Bumpass said he thought school districts should be kept
separate from city government. He said they have their own constituency, their
own elections, and are their own political subdivision.
October 3, 1988
The meeting recessed at 11:00 a.m. and reconvened at 11:25 a.m. 311
ORDINANCE CHANGES
The City Attorney explained minor changes needed to be made to the proposed
ordinance,regardless of which option -is chosen. He said Les Baledge of The Rose
Law Firm offered to review the ordinance and suggested the following changes:
311
The first sentence of the explanatory paragraph following the ballot 311
question in Section 3 should read as follows: "Collection, of the 1% local
sales and use tax will not commence until collection of the city's existing
1% local sales and use tax shall have ceased."
In Section 2, the phrase "local sales tax" should read "local sales and use 311
tax."
At this point the City Attorney left the meeting. 311
REVIEW OF SALES TAX PROJECTS - BOTH OPTIONS
The proposed projects to be funded by the sales tax, as shown on pp. 27 through
37 of the report, were reviewed and discussed by the Board.
During discussion of economic development, City Manager Pennington announced the
hiring of Richard Shewmaker as the new Economic Development Coordinator for the
City.
311,
311.
Director Bumpass asked if a water and sewer rate increase was anticipated to fund 311.
water line projects. Pennington said it was, since there will not be enough
money available from the sales tax for the entire program Bumpass asked how the
bond issue can be explained to the public in thirty days, as well as the fact
that water and sewer rates will go up by an undetermined amount. Pennington said :.:
that issue would not be presented to the voters between now and January.
Linebaugh said a lot of "normal" money will be used towards capital projects, but.;,
that a 3% increase in water and sewer rates is proposed to fund the bond issue:-'`'
He said that the proposed 36" water line project would be funded with $7 million
in sales tax funds and $3 million in water rate revenues.
Director Martin asked if funds were proposed to take care of the sewer odor
problem. Public Works Director Batie said the City had received the results of a
preliminary study from Metcalf and Eddy. He reported the firm proposed three
solution points, one of which involves adding certain chemicals at lift stations
now, and injecting chemicals into the sewer system this fall.
Director Bumpass asked how the proposed water and sewer projects would affect the
average household. Linebaugh said the sales tax and an additional 3% increase in
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312.1
October 3, 1988
rates would allow the projects to be built. In answer to a question from
Northwest Arkansas Times reporter Phyllis Rice, Linebaugh said the 3% increase
would be in addition to increases already approved by the Board, and in addition
to any increases from the Beaver Water District.
312.2 Director Martin asked what was represented by the $3 million proposed for a
recycling program Public Works Director Batie said that figure would get the
City into a curbside pickup program, but not a huge collection system involving
hand -sorting. The Mayor added that the amount included vehicles and land for a
composting operation. He said revenues are expected to be only 30% on the
dollar.
312.3 Martin, stating he represented the City Board on the Northwest Arkansas Economic
Development District, reported that group was moving forward with some ambitious
solid waste management activities. Batie said the staff was keeping up with
what's going on with that group but preferred to wait until the incinerator issue
was concluded.
312.4 The Mayor announced that the Board would reconvene at 8:00 a.m. to take some
action on the proposal before them, with the Board tour to follow that meeting.
ADJOURNMENT
312.5 The meeting was adjourned at 1:10 p.m.
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MINUTES OF A SPECIAL MEETING OF -THE CITY BOARD OF DIRECTORS
The special meeting of the City Board of Directors which was begun on Monday,
October 3, 1988.was reconvened on Tuesday,_ October 4, 1988, in Room 326 -of the
-City. Administration Building at 113 West Mountain Street. .
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PRESENT: Mayor Johnson; Directors Lancaster, Martin, Kelley, Marinoni, Hess
and Bumpass; City Manager Pennington, City Attorney McCord, City
Clerk McWethy, members of the staff, press and audience.
CALL TO ORDER
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31,3
The meeting was called to order by the Mayor at 8:15 a.m. with seven Directors 313
present. -
SALES TAX ORDINANCE
Director Martin asked if the staff had any new thoughts regarding the termination 313
or non -termination of the sales tax. City Manager Pennington said the staff had -
assumed everyone knew it would be a continuing tax for a number of reasons. He
said a twenty-year bond issue was involved. He said there would be continuing
infrastructure problems which will not be solved in a five-year time period.
Martin expressed concern that, when the proposed projects are completed and the 313
sales tax "rolls off", there would be uncertainty about..what's_going to happen.
He asked if the sales tax was envisioned as always being earmarked for capital
items and, if so, why not have an infrastructure trust fund.
City Manager Pennington said the ordinance was written to earmark the funds for 313.
infrastructure -type needs. City Attorney McCord noted the explanatory paragraph
under the- ballot question in Section 3 states "It is proposed that proceeds from
the tax be used to finance a capital improvement:program and economic development
program for the City."
Martin pointed out that, assuming the tax is not being used to pay down a bond 313.
issue, a future City Board could always rescind the tax.
Bumpass said he was reluctant to pass an ordinance for a permanent sales tax, 313.
commenting that he was shocked this was being proposed. He suggested an
alternative ordinance that would set a total amount of money for certain
projects. Regarding the school issue, he said he had problems with mixing city
revenues and school revenues, and suggested this question of giving $10 million
to the schools be submitted to the voters to decide, rather than including it as
part of the overall sales tax package.
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October 4, 1988
314.1 Martin said he liked Bumpass' idea of two questions on the ballot - one asking
the voters whether to continue the sales tax, and a second question asking the
voters whether $10 million should be used for the schools.
314.2 City Manager Pennington suggested the Board approve a mandated five-year capital
improvement plan. Martin said a problem he had with the open-ended nature of the
tax is that we don't really know what is in the future. Pennington said he was
wholeheartedly in favor of a continuing tax, but admitted the drawback is whether
philosophies will be carried through by future boards and future staff.
314.3 McCord said, if the Board didn't want a continuing tax, the ordinance could be
worded for twenty years or whatever period of time is desired. Bumpass asked how
many years it would take to pay off a $46 million bond issue. Linebaugh said he
estimated a $49 million bond issue, netting around $42 million, would take twenty
years to pay off and would mean an average collection of $4.6 million per year.
314.4 Director Bumpass asked if the bond issue could have a fixed amount of dollars.
Pennington said the capital improvement plan is not totally contingent upon bond
issues, but some projects will be paid for straight from sales tax. He said, if
the Board wants to set a limitation, the twenty-year limit would be best. McCord
pointed out that, under Arkansas law, specific bond issues would still have to be
submitted to voters.
314.5 Bumpass said if revenues increase over what is projected, he wondered what would
be done with the extra money, if there is any. Pennington said the ordinance is
worded such that the funds would have to be used for capital improvements and
economic development. Bumpass asked if salaries could be paid out of economic
development funds. Pennington said the proposal is not for sales tax to be used
for operating expenses, but they may be used for engineering or architectural
costs of a capital project. Director Kelley asked how any excess revenues would
be allocated. Pennington said these would be allocated by the City Board and
pointed out that every year the Board would go through this same process.
314.6 McCord advised the ordinance could be amended to reflect the fact that proceeds
from the tax would be used to finance capital facilities only, for example, and
the phrase "for a period of twenty years" could be added to the ballot question
if the Board desired.
314.7 Martin moved that the ordinance be amended to include a twenty-year termination
period. The motion was seconded by Marinoni. The Mayor asked if the amendment
included adding language to the ordinance such as "economic development capital
improvement program", and the choice of the ordinance which included school
funding. Martin agreed.
314.8 The Mayor asked the Clerk to call the roll so the record would reflect who was
present. The roll was called and all seven directors were present.
314.9 Director Bumpass asked if $10 million school funding should be a separate ballot
issue under Section 3 of the ordinance. McCord said he understood the staff was
recommending that question be voted on next year, along with other bond issues.
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October 4, 1988
315
°The Mayor -said that question could be placed on the November 8 ballot. Bumpass 315
expressed his preference for thequestion to be placed on the November 8 ballot.
Marinoni spoke in favor of the twenty-year limitation, and allowing voters to 315
vote for sales tax separately from voting for school funding.
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The Mayor asked the City Attorneyrto read the ordinance including school funding. 315
With the City Clerk advising there had been no vote on the motion, the Mayor
asked the City Attorney instead to redraft the ordinance to reflect the intent of
the motion.
The City Attorney explained the ordinance could be changed as follows: At the 315
end of the "For"' paragraph and at the end of the "Against" paragraph in the
ballot question the phrase "for a period of twenty years" would be added. In the
explanatory paragraph, after the phrase "economic development program" the
wording "(capital facilities)" would be inserted. He asked the Board if they
wished to add a second ballot question to the ordinance - "For or Against the
.issuance of $10 million in bonds secured by a pledge of local sales tax revenues,
to finance the construction or reconstruction of educational"facilities." The
City Manager pointed out that $10 million in bonds would not give the schools $10
million. Linebaugh said it would only net approximately $8 million which could
actually be used. Bumpass suggested the question be worded to reflect "the
financing of $10 million in capital improvements to the Fayetteville Public
Schools to be financed with a bond issue."
Martin clarified that the intent of his motion was that the •ordinance would 315
provide that sales tax funds could be used to construct"educational facilities,
that the tax be limited to twenty years, and to provide that the economic
development program be for capital items only. He said there would be a second
question in the ordinance for the citizens to vote on the school issue.
McCord read proposed wording for the second ballot question: "For or against the 315,
issuance of revenue bonds secured by a pledge of a portion of the City's 1% local
sales and use tax, if approved, to finance the construction or reconstruction of
$10 million in :educational facilities for the Fayetteville School District."
McCord suggested striking the reference to the Fayetteville School District in
the first ballot question's explanatory paragraph. It was the consensus that the
ordinance should be so amended as recommended by the City Attorney.
The City Attorney read the ordinance for the first time. Director Martin, 315.
seconded by Bumpass, moved to suspend the rules and place the ordinance on its
second reading.
Mayor Johnson asked if Section 7 of the ordinance needed to be changed because it 315.
states the tax shall become effective on the first day of the first month
subsequent to 'the expiration of 30 days from the date of the proclamation of the
results of the election. The City Attorney said that paragraph should be deleted
because the tax should become effective when the current tax expires.
October 4, 1988
316.1 Hess asked if the ballot question on the school issue would have to be subject to
a vote a second time. McCord said that would be subject to a decision by bond
counsel. Hess said he felt if he voted for the ordinance as worded it wouldn't
show that he is in favor of funding the schools. Martin said he thought the
ordinance would clarify the sales tax issue for the citizens. Hess said the
ordinance takes the Board "out of the posture of having to support school
funding." The Mayor said she thought the option was still available, since the
ordinance puts the question on the ballot.
316.2 Upon roll call, the motion to place the ordinance on its second reading passed by
a vote of 7-0. The City Attorney read the ordinance for the second time.
Director Bumpass, seconded by Martin, made a motion to further suspend the rules
and place the ordinance on its third and final reading.
316.3 A citizen in the audience asked if there would be any public discussion. The
Mayor stated she had not intended to take public comment.
316.4 The Mayor asked the City Attorney if a motion was necessary to delete Section 7.
The City Attorney advised a motion would be in order to modify Section 7 to be
consistent with the ballot question. It was moved by Bumpass and seconded by
Martin to modify Section 7 as recommended by the City Attorney. Upon roll call,
the motion passed, 7-0.
316.5 Upon roll call, the motion to place the ordinance on its third reading was
passed, 7-0. The City Attorney read the ordinance for the third time.
316.6 Director Martin suggested that those who were not present in the audience
yesterday and who have a brief statement to make be given an opportunity to
speak. The Mayor asked if anyone had a brief statement to make.
316.7 Gordon Cummings said he thought it was a healthy new development for the Board to
be putting a heavy emphasis on public elections. He said he thought it was quite
inappropriate to be placing a tax increase on the ballot thirty days before an
election. He said he didn't believe citizens would have time to clearly
understand the ordinance and have a public debate on the issues. He said there
will be at least one, and perhaps three, new members of the Board and he believed
the new Board should take a look at the capital improvements to determine that
they are necessary. He said he believed a majority of them were totally
unnecessary. He said he believed the street improvements were necessary but
pointed out that, if $46 million in bonds are issued at 7%-8% interest, the first
year the interest cost will be $3.5 million, and the bond broker, underwriting
and attorney fees will run another $1.5 million. He said that $5 million in the
first year could almost pay for all the street improvements the city needs.
Cummings said he thought there ought to be a one-year moratorium on tax increases
in the community. He said he believed eventually a tax increase may be necessary
but thought if it is submitted to voters on such short notice for not cost-
effective projects we maybe burning our bridges in the future. Cummings said
"when Governor Clinton and President Bush get through with us next year, the
citizens of Fayetteville may need that 1% a lot more than the city government."
October 4, 1988
.iDirector Martin pointed out that staff, in preparing the program, incorporated 317
':,the input of many citizens during the five-year planning forums. He added that
he was comfortable that these were necessary projects.
Upon :roll call, the ordinance passed, 7-0. - 317
.ORDINANCE NO. 3381. APPEARS ON PAGE 3 51 OF ORDINANCE...AND RESOLUTION BOOK
XXIV
ADJOURNMENT
The meeting was adjourned at 9:15 a.m. 317
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