Jonesboro council adopts $2025 capital improvement revenue bonds after debate over process and funding

Jonesboro’s City Council on a single vote adopted an ordinance authorizing the issuance and sale of capital improvement revenue bonds, series 2025, to fund multiple city capital projects and approved an emergency clause to speed the financing.

The bond ordinance and emergency clause passed on roll calls that produced 9 ayes and 3 nos. Council also voted to waive the second and third readings and adopt the final terms supplied by bond counsel during the meeting.

Council members and the administration framed the vote as a way to advance prioritized safety and infrastructure projects without raising taxes. Mayor (name not specified) said the bonds will “save lives” by funding projects that include a consolidated 911 center and safety improvements on South Caraway Road. He emphasized the administration’s effort at transparency and public input in preparing the financing.

Paul Phillips, the city’s financial advisor from Cruz and Associates, described the market response and the final pricing. “We finished the day on the financing with a 4.96 true interest cost,” Phillips told the council, and said Stevens (the underwriter) generated an order book of more than $45,000,000 during the morning order period. Phillips and the underwriter credited investor interest in Jonesboro and noted the bonds were insured by Assured Guarantee and initially received a double-A rating.

Ryan Bowman of the Friday law firm, serving as bond counsel, told council that the procedural step of suspending rules and adopting the ordinance after an order period is “common practice for every entity in the state that is going to issue a bond.” Bowman said the ordinance before council reflected final pricing and terms delivered earlier the same day.

Several council members pressed for more detail on budget impacts and on process. A council member asked how the city will replace approximately $1,100,000 of franchise-fee revenue that the city intends to appropriate to pay debt service on the bonds; Steve Petit (city finance staff) said the appropriation would reduce available reserves if not replaced and pointed to the April financials showing reserve balances of $29,900,000 and available reserves of $20,300,000. Petit said the $1,100,000 currently flows into the general fund and the administration has “other avenues available” to replace the revenue stream if needed.

Councilmember(s) also questioned the timing: whether the council should permit three readings to allow more time for vetting. Bond counsel, the underwriter and the financial advisor warned that delaying final adoption could cause investor orders to evaporate and materially increase interest costs. The administration said the team expected to close the transaction in July and that postponing the adoption would likely require repeating the marketing process under different market conditions.

The council and administration also clarified that approving the bonds does not itself authorize spending on individual projects. Each project financed by the bonds must still return to the council for separate approvals before funds are expended. Councilmembers said project locations (for example, the final site for the 911 center) remain to be decided by a small committee the mayor appointed; that committee will bring recommendations back to the full council.

Votes and outcome - Motion to suspend rules and waive second and third readings: passed, roll call 9–3 (ayes: Heffner, Street, Porter, Moore, Miller, Williams, Gibson, Emmerson, Charles Coleman; nos: McClain, McLean, Bryant). - Motion to adopt the bond ordinance with the final terms provided by bond counsel: passed, roll call 9–3 (same vote disposition). - Motion to adopt emergency clause: passed, roll call 9–3 (same vote disposition).

What the bond finances and timeline look like - Market interest: financial advisor reported a 4.96% true interest cost on the financing after the order period adjustments (Paul Phillips). - Investor demand: Stevens reported more than $45 million in orders during the order period that closed the morning of the meeting (Paul Phillips). - Credit enhancement: the bond offering was insured by Assured Guarantee and initially rated double-A, officials said. - City reserves and replacement: staff reported available reserves of approximately $20.3 million and a total reserve balance of $29.9 million; the council is dedicating about $1.1 million in franchise fees for debt service, which would reduce available reserves if not otherwise replaced (Steve Petit).

Next steps and implementation The city will proceed to finalize the sale with the underwriter and expects confirmations from investors after ordinance adoption. Individual projects funded by the bonds (including the 911 center and road safety projects) require separate council-level approvals before construction or contract awards.

Speakers quoted in this article spoke during the agenda item on the bond ordinance and were recorded on the meeting transcript; direct quotes are attributed to the speakers listed below.