DALLAS — Little Rock voters will be asked to extend an existing property tax to support $105 million of general obligation bonds for public works projects under a plan outlined Tuesday by Mayor Mark Stodola.
Proceeds from the bonds would make a dent in the city’s list of more than $700 million of needed street and drainage projects, he said.
“The funding we have is not going to be enough,” Stodola said. “This would help out with all of those street and drainage issues that need our attention.”
Stodola used his annual state of the city address to ask for an election to extend a 3.3 mill property tax for another 15 years while lowering the rate to 3 mills.
Revenues from the tax currently support $72.8 million of GO bonds issued in 2004.
The final debt-service payment on the 15-year bonds will be made this year, Stodola said.
“I am happy to report that our bond trustee recently notified us that these bonds will pay off this year, a payoff in eight years rather than 15,” he said.
City officials said the early maturity is due to growth in property values and population since the bonds were issued.
“This fact provides us with a unique opportunity, which must be decided this year before November, when we send our millage rates for next year to the county,” Stodola said.
The tax would expire with the final payment on the 2004 debt. The levy, which peaked at 3.75 mills, was originally approved by voters in 1958 and renewed in 2003.
Little Rock’s GO debt is rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service.
The current 3.3 mill rate amounts to $132 a year on a $200,000 residence. The proposed reduction to 3 mills would lower the tax bill to $120 a year.
Voters in September 2011 approved an increase in the city’s sales tax rate that will generate $72 million over 10 years for street and drainage work, but Stodola said that is not enough.
“While this amount may sound good, and certainly is an improvement, please realize this total of $72 million is only 10% of the over $700 million in estimated costs for street and drainage improvements needed to fix the many problems citizens have brought to our attention,” the mayor said.
Stodola cited public improvements financed by the 2004 bonds in his call for the tax renewal vote, saying bond proceeds helped build a firefighter training facility, several community centers, and improve streets and drainage.