LR board to weigh financing proposal

Little Rock officials have proposed the short-term financing of nearly $6 million so certain projects -- including the 12th Street Police Station -- can be completed this year.

The Board of Directors will consider an ordinance at tonight's 6 p.m. meeting at City Hall that would allow City Manager Bruce Moore to issue a promissory note to pay for Fire Department vehicles, information technology upgrades and completion of the police station.

Each of the projects were promised a certain amount of tax revenue from the three-eighths percent capital sales tax that voters approved in 2011. The sales tax funds are being disbursed incrementally over a 10-year period that began in 2012, meaning the total amount to be allocated to any given project won't be available until eight years from now.

So to be able to address what Moore has called urgent or "critical public safety needs," the board can approve short-term financing for some of the projects.

"We could either wait 10 years until the money accumulates and have built the [12th Street] Station in 10 years, or we can borrow under short-term financing and do it now and pay it back as the revenue comes in," Police Chief Stuart Thomas said Monday.

Moore said the intent all along had been to fund some of the larger projects through short-term loans.

"When you weigh the advantages of getting these projects open like 12th Street in the next months, clearly it was in our best interest to move forward in this direction," Moore said.

Under the ordinance, the city would repay the $5,916,000 loan in five equal payments from 2015 to 2019 out of its general account. That account would be reimbursed with revenue generated from the capital sales tax. Accrued interest would be paid for out of the general account.

The ordinance proposes financing:

• $1,000,000 for an intensive upgrade to the city's IT infrastructure, including improvements to the server, network, disc backup and data storage.

• $2,922,000 for the purchase of four fire engines and one ladder truck.

• $1,994,000 to complete the police station on 12th Street.

Short-term financing for the majority of the $12.5 million station has already been approved by the city board. The project was originally estimated at about $10 million, but after planning and research it was realized that the extra $2 million being considered in the ordinance was needed, Thomas said.

"The building is a state-of-the-art facility for our major crimes detectives, our crime scene forensic functions and our downtown patrol functions," he said. "It represents a partnership with the neighborhood there because eventually we intend to have more than just police in the facility. It also provides a stable center point for the 12th Street redevelopment."

A separate ordinance before the board tonight would allow the city to sell a lot it owns and then purchase another one behind the station, which comes out to the city paying the approximate $26,000 net difference of the two lots.

The property exchange will result in the city being one lot short of owning an entire half-block behind the station. The city plans to use the area for parking spaces, which would also be accessible to visitors of a nearby church or neighborhood resource center.

If short-term financing is approved, construction is on schedule to have the 12th Street Station open by mid-July.

The board has approved short-term financing nine other times for projects on the list for funding from the 2011 capital sales tax, including recent 911 system and radio upgrades.

"It's critically important as a city that we move forward with these major public safety initiatives, and this is a funding mechanism that allows us to do that," Moore said. He added that other projects, even some dealing with public safety like a Main Street police headquarters, will have to wait until funds from the capital sales tax accumulate.

Growth projections of the tax revenue have fallen short so far of what officials had predicted they'd be. Sales tax growth in 2013 was just 0.78 percent, significantly less than the 2 percent yearly growth that was expected. Officials budgeted for a 1.75 percent increase for 2014.

Moore has told the board at previous meetings that if the projected growth isn't achieved, there will need to be a policy discussion next year about whether funding will be reduced evenly across all projects or selectively.

Metro on 05/20/2014

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