Mayor says a yes vote means no increase in tax

The key component in a program for keeping up with city capital needs goes before Conway voters beginning Monday.

The plan, initially introduced by Mayor Tab Townsell more than a year ago, calls for "refunding" bonds issued in 1997. By splitting a current 0.5 percent sales tax into a pair of 0.25 percent levies, revenues would be used to pay off existing bond debt, to back $7.525 million in additional bonds for a new police station, and to supplement the general fund with an estimated $2.2 million per year. That money would be reserved first for specific police and fire department needs, and then for arterial road improvements.

Townsell met with reporters last week at City Hall to explain the program. He emphasized it represents no increase in city sales taxes, and likened the $2.2 million revenue boost to a home refinancing, while the police department bond issue compares to a second mortgage.

The mayor also noted that the half-cent tax, "the work horse for capital" - having funded critical capital needs such as a fire station, the sports centers and road projects - had not produced income for city projects since 2000.

"The refinancing gives the tax a chance to work for us again," Townsell said. "This is the only way we've kept up with growth. ... It's the only way we can do it again."

Townsell first presented the idea to the city council in November 2004 as one component in his "Extraordinary Revenue Sources" plan to bridge a projected $60 million shortfall in capital needs.

The council in February outlined an approach for this year. Other parts of that plan - a 2 percent "hamburger tax" to fund park projects, reworking the fiscal relationship between the city and Conway Corp., and investing as much $640,000 in a special census - are either already in place or in the implementation phase.

In May, the council heard a specific presentation by representatives of Stephens Inc., the primary underwriter, on the bond refunding, and in August and October aldermen met to review spending plans.

And while the council has gone along with the plan, aldermen have expressed reservations that, even though public safety is important to voters, it's not a common topic of community debate.

Ward 2 Alderman Sandy Brewer restated last week in an interview concerns he voiced in the recent spending discussions.

"I don't know that I've heard from anybody who's worried the police station is too crowded," Brewer said. "The people I talk to want something done about streets and traffic."

Renewing taxes prior to their scheduled sunset likewise is a increasingly common government move that doesn't sit well with some voters, Brewer added.

Statewide, tax elections this year have gone both ways, according to Don Zimmerman of the Arkansas Municipal League.

"Usually voters find those measures pretty popular if it's a rededication of an existing tax, and if there's no tax increase involved," Zimmerman said.

And while voters do typically care more about fixing streets than fixing fire trucks, he suggested it's up to city leaders to make sure public safety is not neglected.

" Roads are always popular because everyone uses streets. Police and fire they have great need for, but it's not something you utilize every day." he added. "When they have a need for it, it quickly becomes a top priority."

Voters must approve the bond refunding in a Tuesday, Dec. 13, special election. Also on the ballot are pair of state bond questions referred by the General Assembly to fund highway and higher education projects.

Early voting begins Monday at the Faulkner County Courthouse. Ballots will be available 8 a.m. to 4:30 p.m. weekdays until the election.

The ballot

The local plan, as presented on the ballot, is broken into three different questions - and stated in potentially confusing legal language.

As explained by Townsell, Question One authorizes a 0.25 percent general sales and use tax; Question Two authorizes refinancing 1997 capital improvement bonds; and Question Three authorizes new improvement bonds to build the police station.

If either items one or two fail, all three fail, Townsell said - meaning the current half-cent collection will continue to go entirely to paying off the 1997 bonds, expected to take until 2009.

Passage of only items one and two - if voters reject bonds for the police station - will generate about $2 million per year in revenue that would go toward the capital projects. Townsell noted, however, the police headquarters would remain at the top of the priority list, bumping fire department and street needs at least four years into the future. Expected payoff in this scenario would be 2013.

If voters approve all three questions, work on the police station could begin as soon the bonds are sold. Likewise, the $2 million in "pay as you go" projects would mean the fire department needs could be taken care of in about two years, making the revenue stream then available for the street projects until all the bonds are paid off, projected to be 2016.

"Hopefully, we'll continue to grow as an economy and we can shorten that time frame," Townsell said.

Maybe, maybe not

Recent tax votes in Conway have produced mixed results.

Conway taxpayers agreed to $43 million from bond issues in 1993 and 1997.

In a special election two years ago, Conway voters defeated a proposed additional three-fourths cent sales and use tax expected to raise about $28 million for drainage and street projects during its five-year lifetime.

In August 2000, a 10-year, 1-cent sales tax for streets, parks and other city expenses was defeated, also in a special election. A year later a three-quarter-cent, five-year initiative failed by 20 votes from more than 5,000 cast. A one-quarter-cent permanent sales tax to fund city employee salaries passed handily, however.

Conway's sales taxes include a 1 percent general sales tax, the 0.5 percent for the bond issue that is the subject of the Dec. 13 rededication, and 0.25 percent directed to municipal employee salaries. The Conway Advertising and Promotion Commission also levies a 2 percent sales tax on hotel rooms and prepared food.

Based on figures prepared by the city, the 1-cent general sales tax brought in $7.4 million through the first three quarters of 2005. With the fiscal fourth quarter still to go, this year's collection has surpassed the full 12-month tally from 2000.

This year's partial collection is running nearly 14 percent ahead of last year's, which finished at a record total of $8.7 million.

September's reported $935,500 collection was the largest single month ever, up nearly 22 percent from a year ago.

(Staff Writer J.K. Jones can be reached by e-mail at kevin.jones @thecabin.net or by phone at 505-1236.)