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Eureka Springs council approves 1% sales tax ordinance, places three questions on the ballot
Summary
The Eureka Springs City Council approved ordinances to put a 1% sales-and-use tax and two bond questions (up to $10 million each for water and sewer) on the November ballot. Council members voted unanimously among those present; the city and bond counsel said visitors will bear much of the tax burden.
The Eureka Springs City Council on May 11 approved three ordinances to put a 1% sales-and-use tax and two bond questions before voters.
Bond attorney Michael Moyers told the council the package includes a 1% sales tax levied for 20 years, effective April 1, 2027 if approved, and two separate bond questions of up to $10 million each for water and sewer improvements. “You will be voting on three separate questions. One for the levy of the 1% tax for 20 years, one for $10 million of bonds for water improvements and another for $10 million for sewer improvements,” Moyers said.
Council suspended the rules, read the ordinances by title and approved them on their third and final readings. Roll-call votes recorded: Mr. McClung — Yes; Mr. Meyer — Yes; Mr. Holyfield — Yes; Miss Gruning — Yes. The ordinances are Ordinance No. 2384 (levy of 1% sales tax), Ordinance No. 2385 (calling a special election), and Ordinance No. 2386 (placing bond questions on the ballot).
Why it matters: Moyers explained that when sales-tax–backed bonds fund water and sewer work, tourism dollars from visitors help pay debt service so that ratepayers shoulder less of the cost. “Whenever that's the way that this is communicated, I found the cities have a pretty good percentage approval rate,” Moyers said. He also explained the flow of funds: collections pass through the state and trustee bank to pay monthly debt service; after debt service, any residual funds return to the city for water and sewer purposes.
Council and staff context: The city’s Public Works Director reported a recent sewer overflow near Clear Spring School caused by a lodged service-connection piece (not tree roots) and said the wastewater plant is operating normally. He also cited an estimated current water-loss figure of about 50 percent (noted as provisional while reads settle) and described coordination with ARDOT and utility providers on relocation work for a planned roundabout. Council members used that operational context when urging voter outreach on the ballot questions.
Next steps: The ordinances call a special election; the council and the city’s finance and communications teams said they will prepare explanatory materials for voters. An update in the meeting cited a county clerk certification deadline of August 20 for municipal ballot matters, which the city and local stakeholders said leaves time for public engagement before certification.
The council did not take additional, separate funding actions during the meeting; the ballot questions will proceed to the election process.
