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Fort Smith board approves resolution to begin sales‑tax bond issuance for sewer, consent‑decree work
Summary
The Fort Smith Board of Directors voted unanimously July 22 to adopt an intent resolution launching the issuance of sales and use tax bonds to fund sewer and consent‑decree projects, setting underwriting, counsel and a September ordinance schedule ahead of late‑October funding.
The Fort Smith Board of Directors on July 22 adopted an intent resolution to begin the sale of sales and use tax bonds to finance sewer improvements tied to a federal consent decree and other wastewater projects. The vote was 7–0.
The resolution, presented by city staff, follows a May 13 voter authorization allowing issuance of up to $385 million in sales‑tax bonds for consent‑decree and wastewater work. City staff said the bonds would fund construction of up to eight capital projects expected to be under contract by year end and could include design of three additional projects. The resolution names the underwriting team, financial advisor and bond counsel and starts the formal process; an ordinance authorizing issuance will return to the board in September and funds are slated to be available in late October.
“What's the most important consideration for these bonds going forward is the interest rate,” resident Levon Morton told the board during public comment, adding that the board should seek the lowest market interest cost and maintain a debt‑service coverage ratio. “The fees themselves...which firm charges the lowest fee is not the most important factor.”
Lauren Lowe of PFM Financial Advisors, the city's financial advisor, told the board the city selected underwriting firms with a demonstrated focus on Arkansas sales‑and‑use‑tax transactions and that the first sale would set Fort Smith's credit story for future borrowing. “This first transaction is going to be unique,” Lowe said, noting the need to present the city's sales‑tax pledge and the consent‑decree water‑and‑sewer needs to rating agencies and investors.
Lowe said current market pricing estimates put an all‑in interest cost near 4.9 percent, subject to market movement; the packet shows a tentative pricing date in mid‑September and a close in October. Board members asked about serial maturities, refunding provisions and whether local investors could participate; Lowe said the structure would include serial maturities and the city could choose to refinance later if market rates fall.
The board discussed rating considerations and the need to maintain coverage ratios as the city issues subsequent tranches of bonds. After the presentation and public comment the board moved and seconded adoption of the resolution and approved it by roll call: Directors Rigo, Kemp, George Gatsavas, Christina Gatsavas, Settle, Martin and Good voted in favor.
The resolution sets the administrative track for a September ordinance and a planned bond closing in October; no final bond sale or pricing was taken at the meeting.
