LITTLE ROCK — The Central Arkansas Library System’s governing board on Thursday voted to pursue a referendum to coincide with the May 24 primary election to make good on a pledge to reduce the property-tax rate in Little Rock that funds capital improvements for the system.
If successful, the capital-improvement millage rate in Little Rock would decline from the current rate of 1.8 to 1.3 mills.
At the same time, the library system’s leadership is seeking to refinance bonds to generate money for certain improvements, including work on the Main Library’s entrance. The executive director has suggested the move might result in a two-year extension on repayment of the borrowed money.
The reduction of 0.5 mills to the capital-improvement rate would be equivalent to the increase Little Rock voters approved to the library system’s operational millage rate during a fall referendum.
During the Nov. 9 special election, voters approved increasing the operational rate in Little Rock from 3.3 to 3.8 mills by a wide margin. Library officials had asked for the increase to address a structural budget crunch tied to additional facilities, increased circulation of costlier downloadable materials like e-books and a shift away from using borrowed money to plug a hole in the materials budget.
“During the fall campaign we told voters that if they would increase their property taxes for operating the library we could come back in 2022 with another proposal to lower their taxes dedicated to capital improvements,” Executive Director Nate Coulter wrote in a report prepared for Thursday’s board meeting. “To honor that commitment we want to ask the city to put the capital millage on the regular primary ballot in May.”
Each mill represents the dollar amount paid on every $1,000 of the tax-assessed value of a piece of property.
In his report, Coulter said that if Little Rock voters give approval, the library system “will refinance all outstanding general obligation bonds.”
“The reissued bonds would be paid off over roughly the same amount of time as the current bonds,” he added. “The refinancing would generate some project funds that could be used to update the Main library.”
He suggested the Main Library would get a remodeled entrance and first floor, plus “21st century features.” The work would coincide with the 30 Crossing project, in which crews have removed the highway entrance and exit ramps close to the building.
“This will result in a new green space of about 15 acres spanning from Cumberland Street to the Clinton Presidential Center with the library at one end of it,” Coulter wrote in his report.
In exchange for the possibility of extended debt payments for a couple of years, depending on refinancing and interest rates, Coulter wrote that patrons “would wind up with a modern looking library that had a more open feel on the first floor and was reoriented to draw people in from the new green space to the south and west sides of the library.”
In light of Thursday’s vote to move forward, the first order of business for library officials is to gather signatures to put the measure on the ballot. Coulter in his report said that the library system will need to get 100 petitions signed — the same number for the previous election in the fall.
The Little Rock Board of Directors will get the final say on whether to approve the referendum. To get on the May 24 ballot, Coulter wrote that officials will need to present their request to the city board by early March.
The resolution to pursue the capital-millage reduction passed during Thursday’s meeting with one no vote from Stacey McAdoo, who serves as the board’s vice president.
Library system board member Robert L. Brown, a former associate justice of the Arkansas Supreme Court, voted to pursue the millage reduction, explaining that he had been assured that the resolution only addressed the reduction of the capital mills.
But earlier in the meeting, Brown and board member Andre Guerrero expressed some confusion regarding the mechanics of refinancing the bonds, as well as how to explain the latest referendum to voters. Brown at one juncture referenced that by seeking to refinance bonds the library system was asking voters to do something in addition to reducing the capital millage.
In response to a question from Brown, Coulter said that the length of the extension of the bond-indebtedness was not specified in the resolution, explaining that “we don’t know because it’s a question of how quickly the money comes in. … If you looked at the bonds, they all have a maturity date, but that maturity date is a lot longer than what it takes ever to pay them off.”
Nevertheless, Coulter said he has been told it will be roughly two years.
When reached via email after the meeting, Coulter said that should voters give approval in May to the capital-millage decrease, the city and county will adopt ordinances in late 2022 to set the combined rate for 2022 property taxes associated with the library in Little Rock back to where it was in 2020, from 5.6 to 5.1 mills. Property taxes in Arkansas are collected a year after they accrue, he wrote.
“In summary, property [tax] rates collected in LR for libraries this year are higher than last year, and higher than next year, if our proposal to lower capital millage rates is successful,” he wrote.