SPRINGDALE : City: Funding available to build $20 million exit
Posted on Friday, August 15, 2008
URL: http://www.nwanews.com/adg/News/234289/
Springdale says it has enough cash over the next four years to build a $ 20-million exit at Interstate 540 and the Don Tyson Parkway.
If the City Council approves a funding resolution later this month, the north-south exit will replace the 2003 bond program — now in its final phases of completion — as the city’s top infrastructure priority.
The city’s Capital Improvement Program, fed by a sales tax, is sufficient to design and build the exit without state or federal money, chief city engineer Ben Peters said. By paying for the exit with local money, the city can sidestep the long line of towns and cities waiting for transportation project money.
In a perfect world, motorists could be driving on the exit as early as 2014, Peters said.
Touted as the linchpin for growth in commercial and residential markets, the exit would link east and west, and provide access to Arvest Ballpark, home of the Northwest Arkansas Naturals, the Class-AA affiliate of the Kansas City Royals.
Mayor Jerre Van Hoose, in a letter issued Tuesday, urged his colleagues to divert funds from the bond program to the exit — once the needs of the bond program are satisfied early next year.
“I have no doubt this interchange is the single most important major infrastructure project the city needs to pursue at this time,” he states in the letter.
Van Hoose’s plea was made after U. S. Rep. John Boozman, R-Ark., and Jonathan Barnett, chairman of the Arkansas Highway Commission, told the city last week that it could expect bureaucratic help, but not money, for the exit.
Alderman Rick Evans, who attended the meeting, said the time is right to move forward at the local level.
“We can make this thing work if we have to,” said Evans, sponsor of the funding resolution.
The City Council in November 2005 agreed to set aside $ 5 million per year for five years to supplement the $ 105-million bond program. The annual supplements, totaling $ 25 million, were scheduled from 2008 to 2012. The entire bond program is expected to conclude next year, and all the contracts have been awarded. Instead of needing $ 25 million to fulfill the bond program, the city needs only $ 6. 3 million, leaving $ 18. 7 million in projected, unencumbered revenue, according to Peters, Van Hoose and Evans.
Instead of driving the sales tax into other projects, revenue can be used to build the exit.
Van Lee, the bond program manager with Construction Dynamics Group, explained why the city only needed to use a portion of the supplement.
Most importantly, Lee said, Springdale was able to sign affordable contracts because of its use of asphalt indexing.
With indexing, the city agreed to pay the market rate for asphalt at the time it was laid. With the index in mind, contractors submitted bids with conservative speculations on asphalt prices. If the cost of the asphalt ended up higher than what was listed in the bid, the city paid the difference. If the price came in lower than what was bid, the contract was reduced accordingly.
The result is that contractors submitted low bids, because they didn’t want to take the risk of guessing high on asphalt rates but being paid low by the city.
“It made it a level playing field,” Lee said. “It helped us tremendously.”
Springdale also did well on investments.
“We made quite a bit of interest over the years on the bond money,” Lee said.
Finally, Springdale Water Utilities gave reimbursements to the city when road programs benefited water improvements.
Together, the three-pronged savings made it possible for the city to meet all its bond requirements without having to dig too deeply into the Capital Improvement Program, Lee said.
Now that attention has turned to the exit at Tyson Parkway — in July the city entered contract negotiations with Garver Engineers — city staff have taken a sharper look at public finances.
Though sales tax collections in Springdale have been in decline for months, Peters said, the three-fourths of a cent levy that feeds the capital program still brings in a respectable haul. In 2006, the sales tax produced $ 9. 2 million for capital programs, while in 2007 the tax generated $ 8. 5 million. As of May, the 2008 tax has brought in $ 3. 2 million. If the Council were to move forward with the $ 5 million allocation over the next four or five years, and if the tax produces at least $ 7. 5 million in the coming years, there could be as much as $ 2. 5 million per year remaining for other programs.
“I can never say that we have too much money,” Peters said. “But can we continue to do things with $ 2. 5 million per year ? Yes.”
Alderman Mike Overton said he can support paying for the exit through the capital fund, but not until he has a clear understanding of how much money is available.
“I want to see an actual accounting of the Capital Improvement Program to know what the numbers look like, because I’ve never been able to figure out the accounting,” Overton said. “I haven’t seen any numbers that I’m confident in. But once I’m confident, I can make a decision.”
Overton pointed to the fact that the capital program already pays for a variety of projects and that there are other needs in the city, such as unpaved roads in recent annexations.
“We’ll have to take a look at our other priorities,” he said. “If it fits in and it’s not a significant burden, of course, I’ll consider it.”