SPRINGDALE — The city of Springdale plans to proceed with almost $180 million in projects if voters approve a bond issue Tuesday.
The cost of paying off a 2013 bond issue and financing a new one is the second-costliest item among the six ballot questions.
A question on refinancing must pass for any of the projects to be funded in the next few years, city officials said.
“If that does not pass, the other five [ballot questions] won’t matter,” Mayor Doug Sprouse said at a forum Jan. 30 at the Springdale Senior Center. “We will not be able to generate revenue for other issues. If this does not pass and the others do, we will not be able to sell those bonds. We will leave money on the table.”
The new bond issue will be repaid by extending a 1 percent sales tax for 10 years beyond its current expiration date. Taxes won’t be cut immediately if the issue doesn’t pass. The city is obligated to pay on previous bonds for eight to 10 more years, Sprouse said.
“You’re not going to get away from that 2 percent sales tax anytime soon,” he said.
The four major cities in Northwest Arkansas — Spring-dale, Fayetteville, Rogers and Bentonville — levy the same amount for capital improvement bonds. Wyman Morgan, director of finance and administration for Springdale, said half of the tax goes to the city’s capital improvement fund, paying for items such as street repairs, upgraded technology and new police vehicles.
The other half repays bonds the city sells for major capital projects.
Springdale residents approved a bond issue and 1 percent sales tax in 2006, Morgan said. That bond issue paid for construction of Arvest Ballpark and Don Tyson Parkway, among other projects.
Voters approved a second bond issue and agreed to extend the 1 percent sales tax in 2012. The 2012 bonds paid for projects such as the interchange of Don Tyson Parkway with Interstate 49, C.L. “Charlie” and Willie George Park, and two new fire stations.
Springdale resident Jack Clark, who attended the forum at the senior center last month, said he supports the bond issue.
“We’ve got to take advantage of this now. We get all of this for no tax increase,” he said. “It’s absolutely necessary for the city to refinance other bonds. It’s a smart, good way for our city to work.”
In 2013, the city refinanced the 2006 bonds at a 4.2 percent interest rate, “which saved the taxpayers $12 million,” Sprouse said at the forum.
If it passes, the new bond issue will pay off the 2013 debt. If not, that issue is projected to be paid in full in 2027. The 2012 bond debts are set to be paid in 2032.
Because of population growth in Springdale, the sales tax revenue dedicated to the repayment of bonds is more than anticipated. If the issue passes, the new bonds could be paid off in 15 years rather than 30 if revenue stays the same or continues to grow, Sprouse said.
“That 15 years is only five years longer than the city would repay the bond as it currently stands,” he said.
The cost of construction for all projects proposed for the bond issue totals $179.89 million. The construction totals are “up to” amounts, Sprouse said.
Print Headline: Springdale seeks bond issue