Members of the Little Rock Board of Directors during a meeting Tuesday gave the green light to an effort to obtain nearly $6 million through short-term financing to undertake various projects.
The ordinance authorizing the $5,925,000 note, along with an accompanying emergency clause, was approved in a voice vote.
Infrastructure initiatives expected to be funded with the short-term financing include the reconstruction of Interstate Park Drive and improvements related to MacArthur Park, such as a new playground and improved lighting and walkways, according to the ordinance.
MacArthur Park is the site where the Arkansas Museum of Fine Arts -- formerly the Arkansas Arts Center -- is undergoing an overhaul. The museum is expected to reopen in the fall of 2022, later than anticipated.
At a meeting last week, City Manager Bruce Moore suggested the planned MacArthur Park improvements are in line with the construction work happening at the museum.
Basketball courts and a parking lot are scheduled for construction at Kanis Park, according to the ordinance's text.
Additionally, the money will fund the purchase of a fire truck as well as mobile radios for the police and fire departments.
Asked by Vice Mayor Lance Hines during the meeting Tuesday about the rationale for using short-term financing as opposed to the city's financial reserves or dollars received as part of the American Rescue Plan Act, Moore said the city has used financing in the past as a mechanism to move forward with capital projects.
Officials felt they needed to move forward with the purchases despite the federal money, Moore said, adding that they still have to go back to the board with recommendations on how to use the stimulus funding.
In May, Little Rock received the first half of what is expected to be a total of $37.7 million distributed to the city from the American Rescue Plan, according to the U.S. Treasury Department.
At-large City Director Joan Adcock on Tuesday asked Moore how much interest the city's $18 million in the bank was drawing.
Moore said he would have to check with the city's treasury manager.
He noted that the board will ultimately decide how to spend the first round of money received from the federal government. None of the ideas submitted by board members regarding how to spend the money "were on this list," Moore said, referring to the projects scheduled to be carried out using the loan.
Later in the meeting, treasury manager Scott Massanelli told city directors that Little Rock's overnight rate for its money in the bank was 53 basis points, or 0.53%.
Language in the ordinance says the city may pay up to 5% on the principal amount of the loan.
However, that line simply means the city cannot borrow more than 5% of the assessed value of taxable property in the city, which at the end of 2019 was more than $4.6 billion, Moore said in an email Wednesday.
Moore wrote that the city will issue a request for proposals and select the bank that offers the lowest interest rate.
"Though rates are potentially going up I am fairly confident it will not be close to 5%," Moore wrote.
He said the city expects to select a lender within the next 30 days.