City of Alexander sales tax referendum scheduled for November 14

On Tuesday November 14, City of Alexander voters will be asked to approve a one-cent hike in the city sales and use tax for the general fund. Adding one-cent will increase the city’s local tax from two-cents to three, equal to the City of Bryant. If approved, collection of the new tax will begin January 1, 2018.

During his presentation to council members at the council’s August 21 meeting, Mayor Paul Mitchell repeated many of the comments he made at the April meeting when the topic was first discussed. Mitchell said he wants to be able to provide the services residents have requested for several years; animal control, clean-up vacant lots and solving the city’s drainage problems among others. He also reminded council members about the loan on city hall, with interest alone totaling $300,000.

Then there’s the audit for 2014 and 2015, released earlier this year. According to the audit for 2014 $46,654 of, “restricted monies were paid from the Parks and Recreation Fund to the General Fund.” Also, the audit states the Police Department Fund did not receive all of its five-eighths-cent sales tax revenue in 2014 in the amount of $42,617. All of this occurred while Michell Hobbs was mayor. Changes are being made where possible so the general fund can repay the two accounts.

Mitchell also addressed the issue of acquiring grants for city projects. He explained that many grants require matching dollars, or property in lieu of funds, neither of which the city has. And, unless someone in Alexander is an expert at writing grants, hiring a grant writer costs.

“The money (to pay for that) has to come from somewhere,” he said.

The current two-cent sales tax was approved by voters in two special elections. The first referendum levied a one-cent tax to be given to the fire department. Voters then approved a second referendum which divided a one-cent sales tax among the fire department, police department, and parks and recreation. Of the second one-cent tax the fire department receives one-eighth-cent, the police department five-eighths and parks and recreation two-eighths. The one-cent sales tax being proposed now will go to the general fund allowing it to be used for any purpose in the city. Both previous referendums were held prior to the Woodland Hills annexation in 2006.

The final 2016 budget shows revenue to the general fund at $300,000. That includes property tax collections and the city’s share of the state sales tax, among others. In 2016 one-cent of sales tax in Alexander generated $432,225.

Mitchell repeated his aversion to increasing taxes. However, he said to make the improvements needed to attract both new businesses and residents, “That takes money.”

Mitchell estimates the cost of the election at around $14,000. With a one-cent sales tax generating approximately $36,000 per month he expects the new tax will pay for the election the first month.

Mitchell reminded council members this sales tax will not just be paid by Alexander residents. He said anyone from outside the city, or driving on the interstate, who makes purchases in Alexander will also be paying the three cents; the same as Alexander residents who shop in Bryant pay Bryant’s sales tax.

In order to increase the city sales tax council members had to approve an ordinance calling for the special election. They then passed a second ordinance establishing the one-cent sales tax, which will be collected beginning January 1, 2018 if approved by voters. Present at the meeting were aldermen Joe Pollard, Joy Gray, Juanita Wilson, Harold Timmerman, Dan Church, and Melissa Ratliff. All voted “Yes” to pass the ordinances and to suspend the three-reading requirement. Absent were Elizabeth Bland and Jeff Watson.

Next month council members have an even bigger question. If voters approve the sale tax increase Mitchell wants to reduce the city property tax from five-mils to three-mils. Every September the city council is required to set the millage rate for the next tax cycle. The maximum is five-mils.

“If you have a $750,000 home it would reduce your tax burden $300 a year,” Mitchell said in April. “I want to give back (if the tax increase passes).”

According to the final 2016 budget property tax to the general fund brought in $14,000 from Pulaski County and $76,300 from Saline County. In September council members will have to decide whether to wait and see if the tax passes then change the millage amount for the 2019 tax collection, or assume it will pass and take a chance on losing around $36,120 in 2018.

In other action at the August 21 meeting;

The council passed two resolutions appointing six residents of St. Joseph’s Glen subdivision as commissioners to the boards of the subdivision’s two improvement districts. Cammie Wood, Bryan Rupar and Christopher Prowse were appointed commissioners to Alexander Municipal Property Owner’s Multipurpose Improvement District No. 43. Jamelia Wallace, Hannah Self and Kendrick Seahorn were appointed commissioners to Alexander Municipal Property Owner’s Multipurpose Improvement District No. 86. District 43 is responsible for phases one through six. District 86 covers Phase-7.

By state law the City of Alexander approved the original resolutions forming the two districts prior to the construction of Phase-1 and also Phase-7. Since then all of the original commissioners have resigned and this action was needed to fill those vacancies. Prowse, Wallace and Self were present at the council meeting and were sworn-in by Mayor Mitchell.

With that bit of housekeeping out of the way the two districts will begin updating the subdivision’s sewage system. Currently St. Joseph’s Glen has a small treatment plant. The plan now is to connect the subdivision to the Little Rock sewer system replacing the treatment plant with a pumping station.

The next regular meeting of the Alexander City Council is Monday, September 18. Meetings start at 6 PM and are held in the courtroom at the City of Alexander Municipal Complex. The public is invited to attend.