FORT SMITH -- City directors in Fort Smith authorized two bond issues Tuesday totaling more than $88 million for sewer system improvements and for a local industry expansion.
One bond issue was for $33.64 million for bond refinancing and construction work to improve the city's sewer system as called for under a consent decree that the city reached with the U.S. Department of Justice and the U.S. Environmental Protection Agency.
The other bond issue was for $55 million in industrial development revenue bonds to expand the Dixie Consumer Products plant in north Fort Smith.
City Utilities Director Steve Parke said $1.98 million of the bond money will be used for water system improvements, and $26.96 million will be used for wastewater system improvements and expansion of the Water and Sewer Department headquarters at 3900 Kelley Highway.
An additional $5.74 million in bond proceeds will be used to refinance Series 2005 bonds to take advantage of lower interest rates, acting City Administrator Jeff Dingman said. The refinancing will save the city $493,000, he said.
Money from the bonds will be used for various consent-decree projects, such as pump stations and line work, Parke said.
About $7.7 million will be spent on expanding the property at 3900 Kelley Highway and building a new headquarters for the Street Department, which currently shares the 3900 Kelley property with the Water and Sewer Department.
Parke said the Water and Sewer Department expansion will displace the Street Department.
Plans call for renovating the old library building next to the Fort Smith Convention Center for the Street Department to use while its new headquarters are being built. City property on Wheeler Avenue will be renovated as temporary Water and Sewer Department offices. He said the new Street Department building and renovation of the Water and Sewer Department building will take three or four years to complete.
Expanding the Water and Sewer Department building is necessary to accommodate the larger staff that the city will need to carry out the sewer improvements required under the consent decree. Department officials said as many as 90 additional employees may be needed. The department currently employs 224 people.
Georgia-Pacific Corp. wants to use money from the bonds to expand and upgrade its Dixie Consumer Products plant at 4411 Midland Blvd. The plant has been in operation since 1948. The upgrade will consist of acquisition and installation of a new printing press, plate presses, packaging and handling equipment, associated machinery and equipment, and infrastructure improvements, according to a memorandum from Dingman to city directors.
While the city will authorize issuance of the bonds, Fort Smith will have no obligation to make the bond payments, the memo said.
The memo also said the project, for which the industrial revenue bonds will be used, will be exempt from property taxes for 15 years, but the company will pay an in-lieu-of-payment equal to 50 percent of the taxes it would have paid on the expanded and improved facilities.
Dingman said the company now pays $550,000 a year in property taxes. The in-lieu-of-payment over the 15 years is estimated to total $2.7 million.
Metro on 11/20/2015