JONESBORO — There are ways to finance major capital improvements without a tax increase, but they are limited, Mike Downing, the mayor’s chief of staff told the Jonesboro City Council.
It helps to have an estimated $19 million in unrestricted reserves on hand. But a city policy adopted by the city council in 2011 requires the city to maintain minimum financial reserves in the general, street, cemetery and E-911 funds at 15 percent of budgeted expenditures. Based on that formula, the city would have about $7.8 million available for projects.
The city is in the midst of building a shooting sports complex in phases. City leaders have also expressed the need to construct two additional fire stations to preserve the city’s Class 1 fire insurance rating and to build a police headquarters building to put more of its operations under one roof.
Then, there are parks and recreational projects many residents would like to see.
In addition to simply paying cash for a capital improvement, the city has the option to take out a short term bank loan, issue bonds secured by future franchise fee revenue or enter into a municipal lease with a private entity, also known as a public-private partnership.
That option is under consideration for completion of the shooting sports complex under construction on Moore Road. The Shooting Sports Complex Committee, which was appointed to help raise money and advise on development of the project, voted in June to recommend a partnership with the P3 Group, a Memphis-based company that provides financing for major projects. Generally, the company pays for the infrastructure then uses a lease-purchase agreement with the public entities.
None of those options require voter approval, Downing said.
The city could also pledge a portion of the city’s existing sales tax revenue to issue long-term bonds, but that would require voter approval.
Downing said the use of franchise fees for bond issues could face other issues, as Suddenlink Communications is the largest contributor of those fees, and consumers nationwide are moving away from cable.
“Here’s some considerations for projects,” Downing said. “The economic impact, return on investment within the community, especially where you are a catalyst using public improvements to facilitate redevelopment of blighted areas.”
Downing, former director of economic development for the State of Missouri, said such an approach can be very effective.
“I can tell you that numerous projects I was involved in in my former career in Missouri, we used public improvements to spur redevelopment projects. It’s just incredible what you can do,” he said.
Some projects can attract grants from foundations or other government entities to reduce the local cost, and there’s the potential for selling naming rights to some facilities, he said.
Downing also said capital projects can have a positive impact on the community in other ways, such as providing the amenities that encourage young talent to stay in Jonesboro.
But there’s another consideration that also has to be factored in to any infrastructure improvement, and that’s staffing, equipment and maintenance, Downing said.
Voters narrowly rejected a temporary 1 percent sales tax proposal that would have funded a number of quality-of-life projects, including the fire and police stations.
In other business, the council gave final approval to the following rezoning ordinances:
South Caraway Baptist Church, 3707 S. Caraway Road, to rezone its 16.77-acre campus from R-1 single family residential to C-3 general commercial district for purposes of establishing a private childcare business.
Ashley Tallant to rezone 0.28 acres at 911 E. Parker Road, near Harrisburg Road, from CR-1 commercial residential mixed use district to C-3 with a limited use. Tallant proposes a hair salon for the property.
The council also approved a resolution dealing with special funding to assist in the response to the coronavirus pandemic. The state made Jonesboro eligible for up to $2,664,809 from the Coronavirus Relief Fund, managed by the state Department of Finance and Administration (DFA). Each city and each county was provided funding based on population and other factors.
Another resolution formally accepted a $2 million grant from the U.S. Department of Commerce’s Economic Development Administration for a rail expansion at the Craighead Technology Park. The grant was announced Oct. 5.
The panel also heard the first of three required readings of the following proposed ordinances:
Sunrise Hospitality for a private club restaurant alcohol permit, doing business as Lazarri, 2230 S. Caraway Road.
Pilgrim Lutheran Church to rezone 2.05 acres at 604 E. Highland Drive from R-1 single family residential to C-4 neighborhood commercial. The land, with a vacant house, is adjacent to the church’s campus and school.
A proposed change to the city’s stormwater management ordinance to require city approval before anyone can alter or modify any open channel, drainage swale, detention facility, storm sewer, or other watercourse either natural or artificial where any of the facility is part of the city stormwater management system.
Waive competitive bidding and purchase $107,750 in software for the city planning department from IworkQ. The council also waived the second reading, setting up a vote to approve the proposed measure at the Nov. 5 meeting.
Council members also heard the second readings of:
An ordinance to approve a private club request for Everyday Association, doing business as Native Restaurant, at 515 S. Gee St., which would be the first microbrewery in Jonesboro.
State law requires city council approval before a formal application can be filed with the state Alcohol Beverage Control Division.
An ordinance to provide for city attorney retirement benefits. Under state law, the city attorney is entitled to retire at one-half of that person’s final annual salary after 10 years after reaching the age of 60, or after 20 years regardless of age. Under the proposed ordinance, current City Attorney Carol Duncan, who took office in 2015, could receive one year’s credit for every two years she served as assistant city attorney
Other resolutions gaining approval formally requested the Craighead County Quorum Court to levy the following city property taxes, which reflect no changes in taxation rates:
One-half mill each to support the police and firefighter pension funds.
2 mills for the public library.
The council also approved resolutions that authorized placing municipal liens on 13 separate properties to recover code enforcement expenses.