The Harrison City Council voted unanimously Thursday night to call a special election regarding two sales taxes to build a recreational complex, but not before nearly an hour’s worth of discussion and public input.
The city proposed the $39.9 million facility at a special council meeting in July. It will require passage of a 0.75% sales tax to build the center, which will expire when bonds sold to finance construction are paid off, and a permanent 0.25% sales for maintenance and operation, and for maintaining and improving existing parks facilities.
Mayor Jerry Jackson opened the issue up for discussion with the public at Thursday night’s meeting.
Rick Schoenberger said he wanted to get information out to voters regarding the actual cost of the entire project.
Schoenberger said officials have reported the proposed complex would cost $39.9 million, but he wanted to know who would pay what would likely be millions of dollars in interest.
Ryan Bowman with the Friday, Eldridge & Clark law firm, who is representing the city as bond attorney, explained that $39.9 million is the maximum amount of bonds that could be sold, although the city could opt to borrow less.
That amount represents the cost of construction and issuing bonds, as well as establishing a “rainy-day fund” that could be used to help pay off bonds if tax collections dwindle.
Revenue from the 0.75% sales tax would go to a bond trustee, not the city, in order to see the bond issue retired. The trustee would also maintain the rainy-day fund.
The sale of bonds represents only the principle of the loan.
“So, there will be interest on that $39.9 million that will be paid with collections from the 0.75% sales and use tax,” Bowman said “So, the city is actually paying more than $39.9 million back.”
He went on to say he couldn’t give an exact figure that night regarding how much interest will be paid because that will be determined by the interest rate at the time of the bond sale.
Schoenberger said that could mean the project would cost far more than $39.9 million, possibly as much as $60 million.
“I have been sharing that the reason we need to do this now is because the interest rates are crazy low,” Jackson said. “And if we wait, all of a sudden they’ll be 6% and this thing will be off the table.”
Jackson said he was quoted an interest rate of 2.7% a few weeks ago, but was quoted a 2.3% on Wednesday. He called on Marshall Hughes with Crews & Associates Investment Bankers, the agency that would underwrite the bonds if voters approve, to address interest on bonds.
Hughes said the agency is currently refinancing transactions they never thought they would because interest rates are so low.
Hughes went on to say projections show the bond issue would be paid off in about 14 years at a total cost of about $45 million at current market rates.
Council member Bill Boswell likened the bond issue to buying a house for $200,000 or a car for $15,000. That’s the amount of principle borrowed and there will be interest that must be repaid as well.
“It’s a common sense thing,” Boswell said.
“There is a large percentage of people in Harrison who have never bought a house, never bought a car,” Schoenberger said. “Right now they’re struggling to buy either their medicine or food.”
Those citizens, he said, don’t know interest payments to be a common sense matter.
“These are voters, too,” Schoenberger said. “They’re people, too.”
Bill Van said he is new to town and had been a businessman in Springfield, Missouri, but living in Nixa. He said he and his daughters regularly used a recreational center in Ozark, Missouri.
When he moved to Harrison about two years ago and his oldest daughter visited, she asked why he moved to Arkansas because there is nothing to do in town. They still go to Ozark to use that facility when they visit the area.
“I think it’d be a tragedy if Harrison did not vote this,” he said. “It is definitely needed.”
Avery Hensley, 13, and Anna Unwer, 14, also spoke about the project.
Hensley said she and her family drive 40 minutes to go to Berryville to use the Community Center there. They also stop while in town and spend money.
She went on to say the proposed Harrison center could offer lifeguard and other jobs to youth in the area, as well as another aspect.
“This would be a great place for us to go and have fun with our friends,” Hensley said.
Jim Deben spoke up. He said he has rental properties and his tenants are struggling to pay rent. They won’t be able to afford to use the center and will end up paying more for their groceries as well.
“It’s a great idea,” Deben said, “but I don’t think we can afford it.”
Jackson said lower income people will benefit from the facility by giving children something to do rather than roaming the streets and potentially getting in trouble with the law.
City Finance director Luke Feighert said he is consulting with schools who have students on free or reduced-price lunches to determine if they might also qualify for scholarships to use the center. He is also working with the Harrison Housing Authority in the same fashion.
One woman said she has three daughters who are now adults. She said the city needs to do something for children because it’s often a running joke that in Harrison you either get drunk, get high or get pregnant.
Council member Mitch Magness said his wife went to Walmart last week and spent $138. That would mean she would have spent an additional $1.38 if both sales taxes were in effect. After the 0.75% sales tax sunsets, the extra amount spent would drop to about 35 cents.
Liz Witt told the council she lives outside the city and cares for her father and other elderly people on fixed incomes. She said they are one septic system lateral line or water well issue away from having nothing.
“A dollar thirty-eight, by the way, that’s a loaf of bread and a pack of bologna. You’re welcome,” Witt said.
She asked the council to consider people who live outside the city and will still have to pay the additional sales tax some simply can’t afford.
Jackson said the center could be a benefit for elderly people who use the facility and become healthier, thus increasing their quality of life. But Witt said there are many home-bound elderly peoplewho won’t be able to get out and use the center.
Jackson said he got a message from a woman who lives outside the city. She said she weighs 360 pounds and is excited about the center because she would drive to town to use the aquatic facilities.
Rick Vermeulen asked how citizens could be sure the 0.75% sales tax would definitely expire or sunset.
Bowman said revenue from that sales tax would go to the bond trustee to retire the debt. When the debt is nearly paid off, the trustee will notify the bond attorney to set in motion the process to see the tax expire. The city would never see the revenue.
Bowman also address discussion of cost to the city. He said Crews & Associates wouldn’t underwrite the bond if projections indicate the sales tax wouldn’t retire the debt.
Boswell spoke up about some issues he wanted aired in public. He asked about the land on which the center would be located and about the real estate agents involved. He pointed out that city clerk Jeff Pratt owns Jerry Jackson Realty, which was formerly owned by the mayor, and asked if Pratt would waive his fee in the sale.
Jackson said Pratt does represent the city and would receive a 3% fee on the $545,000 purchase of the 40-acre parcel on Gipson Road. Ralph Gene Hudson represents the seller.
Pratt said his fee would be paid by the seller in closing costs, so he wouldn’t waive that fee.
Boswell asked if that would amount to a conflict of interest.
Jackson said there are several city employees on a list approved by the council to do business with the city outside the scope of their employment.
He said Pratt is already on that list with his Quality Quick Printing business, but the council will be asked to add Pratt to that list separately to include the real estate purchase if voters approve. City attorney Grant Ragland said that would be done by ordinance in September.
Jackson said city officials want to get all possible information out to voters before the election because he feels the more they now will amount to greater support.
To that end, the city is hosting a meeting Monday, Aug. 26, at 7 p.m. at Woodland Heights Baptist Church on Gipson Road and 200 residents who live in the area have been invited to attend. It’s also open to the public.
“If the voters decide they don’t want it, we don’t want it either,” Jackson said. “We’re here to represent the people of Harrison and, actually, Boone County.”
The Boone County Election Commission is scheduled to meet at 2 p.m. Monday, Aug. 26, to approve documents calling the special election set for Tuesday, Nov. 12.