The Central Arkansas Library System will issue $4 million of bonds this summer to buy land for new branch libraries but will wait on a legal decision before issuing the remaining $28 million of a proposed $32 million bond issue.
The library system that serves Little Rock and several suburbs in Pulaski County had planned to take the full $32 million issue to market in early May. However, the deal was postponed when several residents filed a lawsuit over a voter-approved increase in the property tax for the library.
The tax increase was approved in December by a 65-to-35 margin, but the election was held after the date established under Arkansas law when the county must certify the next year’s property tax rate.
Bobby Roberts, director of the library system, said the library can issue the remaining bonds in January, when the tax can legally be collected. He said using the $4 million of bond proceeds would allow the library to purchase two future library sites without having to dip into operating funds.
The one-mill, 20-year tax increase is expected to generate $2.8 million a year, and is to be removed when the 20-year bonds mature.
Projects to be financed by the bonds include two new libraries for a total cost of $15 million, new books and computer upgrades for $9 million, completion of the fifth floor of the main library for $4.3 million, and acquisition of future library sites for $600,000.
The bonds, which will be issued by Little Rock, are rated AA by Standard & Poor’s. Stephens Inc. is the underwriter. Wright, Lindsey & Jennings is the city’s bond counsel.