HomeMy WebLinkAbout1998-10-24 MinutesFayetteville Public Library
Board of Trustees
Special Meeting
8:30 a.m.
Saturday, October 24, 1998
Present were: Trustees Michael Thomas, Marty Goff, Louis Gottsponer, and Maury Roberts. Staff: Louise
Schaper. Guest: Bill Spivey, attorney with Wright, Lindsey, Jennings (Little Rock).
Mr. Spivey was asked to speak about various means to fund a capital project. Here is a summary of his one hour
visit with the Board.
1. Key library funding legislation includes Constitutional Amendment 30 that deal with cities and Amendment 38
which deals with counties. Amendment 72 refers to both 30 and 38 in that it increased both city and county
library operating millage from 1 mil to 5 mil. It also permitted up to 3 mils for capital improvements.
2. The city boundaries define the tax base for a city millage.
3. The capital millage can be used to "equip libraries" and can include construction, computers, furniture, and
books etc.
4. Once the capital millage is passed, it appears the following year on everyone's tax bill. The funds go into the
City funds, segregated by use.
5. If millage is approved for capital projects, we do not have to issue bonds. Only what comes in can be spent.
6. If we use the millage to retire bonds, then there is a separate question on the ballot that refers to this.
Something like "...pledge proceeds to repay bonds issued to construct a city library".
7. We would need to engage a bond company to help us determine the needed millage to retire the bonds. For
example, if we levy a 2 mil tax, the yield is X, we have a budget of Y—can we borrow enough to do all this?
8. Bond companies mentioned include: Susan Fleming at Stephens (377-2428); Stearn, Agee, Leach; Paul
Young at Morgan Kegan (671-1336); A.G. Edwards out of St. Louis. Ask the firms to submit a proposal and
then decide who is most qualified. Need to select a firm early on to get guidance. Try to find a firm that has
been supportive of the library.
9. It is Mr. Spivey's opinion that if property tax were repealed that bond issues tied to milage would need to be
honored.
10. If the bond issue funds are not used within three years (or some other period of time), the earnings have to be
repaid to the federal government.
11. It is very important to informally involve and inform City Council members from the beginning.
12. According to legislation, 100 signatures are needed on a petition to call an election. Once the petition is
submitted to the city, it is the city council's duty to call the election. But they must first pass an ordinance so
doing. After approving an ordinance, there is a 30 day period where a suit can be filed against the special
election. According to the constitution, the election can take place no sooner than 30 days following the
ordinance. Usually, it is 60 days (depending on the Election Commission).
13. The city actually issues the bonds. The city will probably want a bond counsel to draft it. The bond counsel is
usually paid out of proceeds of bond issue. This is negotiated up front.
14. Four to six months after the ordinance calling the election, we would approach the city council to approve
issuance of the bond. There is a 30 day referendum period to allow challenges.
15. Key players are:
a. Bond counsel -prepares legal wording, advises
b. Underwriter -bonds
c. Trustee- issues and pays funds (examples include First Commercial, Metropolitan Bank, Simmons Bank).
16. Can also finance library construction with targeted sales tax. Amendment 62 allows this. Cities may levy up to
1% for capital improvements for libraries, playgrounds and parks. Fort Smith took this route. An election is
also required. Need to find out how Fayetteville uses the sale tax.
17. Another avenue is a combined millage and sales tax. Saline County did this.
After Mr. Spivey left, the Board decided that Louis Gottsponer and/or Marty Goff and Matt Lawrence would speak
with Jerry Rose about next steps.