FORT SMITH -- City directors Tuesday authorized two bond issues totaling more than $83 million for sewer system improvements and for expansion of a local industry.
One bond issue was for $33.64 million for bond refunding and construction will be used to make improvements to the city's sewer system under a consent decree the city agreed to with the U.S. Department of Justice and the U.S. Environmental Protection Agency.
The other bond issue was for $55 million in industrial development revenue bonds for expansion of the Dixie Consumer Products plant in north Fort Smith.
City Utilities Director Steve Parke said $1.98 million of the bonds would be used for water system improvement while $26.96 million will be used for wastewater system improvement and expanding the Water and Sewer Department headquarters at 3900 Kelley Highway.
An additional $5.74 million in bond proceeds will be used to refund Series 2005 bonds to take advantage of lower interest rates, Acting City Administrator Jeff Dingman said. The refund will save the city $493,000, he said.
Money from the bonds will be used for a variety of consent decree work, Parke said, such as pump stations and line work.
But about $7.7 million of the bond money will be spent on expanding the property at 3900 Kelley and providing a new headquarters for the Street Department, which shares the 3900 Kelley property with the Water and Sewer Department. Parke said since the Water and Sewer Department was displacing the Street Department, it was obligated to build facilities for the Street Department.
Work will involve renovating the old library building next to the Fort Smith Convention Center for use by the Street Department while its new headquarters is underway and renovation of city property on Wheeler Avenue for temporary Water and Sewer Department offices. He said the project will take three to four years to complete.
The expanded Water and Sewer Department building will be needed to accommodate the larger staff the city will bring in to carry out the sewer improvement required by the consent decree. Department officials said as many as 90 additional employees may be needed. The department employs 224 people.
Georgia Pacific wants to use the bonds to expand and upgrade its Dixie Consumer Products plant, 4411 Midland Boulevard. The upgrade to the facility, which has been in operation since 1948, will consist of acquisition and installation of a new printing press, plate presses, packaging and handling equipment, associated machinery and equipment and infrastructure improvements, according to a memorandum to city directors from Dingman.
While the city will authorize issuance of the bonds, Fort Smith will have no obligation to make the bond payments, the memo said.
The memo also said the project for which the industrial revenue bonds will be used will be exempt from property taxes for 15 years but will pay an in-lieu-of payment equal to 50 percent of the taxes it would have paid on the expanded and improved facilities.
Dingman said the company now pays $550,000 a year in property taxes. The in-lieu-of payment over the 15 years is estimated to total $2.7 million.
NW News on 11/19/2015