City & County

Quorum Court gives nod to bond issuance for bypass

By Joel Phelps
The Arkadelphian

The Clark County Quorum Court took a further step Tuesday in funding its part of the Clark County Truck Bypass project, as the 10-member panel authorized the issuance of sales and tax use bonds.

In a special-called meeting, representatives from Stephens Inc. were on hand to discuss the borrowing of $8.9 million in bonds. The investment banking firm on Tuesday morning solicited interest rate bids from investors, and were able to “slightly decrease” the interest rate originally projected, said Jason Holsclaw, senior vice president of Stephens. The firm was able to underwrite the bond at a 1.89% interest rate for a 15-year term.

Holsclaw reported the maximum annual payment of $676,400 will leave about $1.3 million for other economic development activities within the county.

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Shep Russell, financial analyst with Stephens Inc., provided the court with information relating to the contract between the county and bondholders. The bonds, he reported, will be repaid solely from the collection of the 1/2-cent sales tax Clark County voters approved in June. 

Once those tax collections begin on Oct. 1, the state treasurer will direct those funds to US Bank, which will then deposit the collections into a revenue account. Five days later the money will be wired to County Treasurer Karen Arnold to be approved by the quorum court for economic development purposes.

The bond amount from that revenue account will be kept by US Bank in a bond fund and used to repay the bonds semi-annually, with a debt reserve in that fund in the event tax collection is insufficient. The county may withdraw the bond funds by claims and/or warrants signed by County Judge Troy Tucker.

In regards to the bypass, Russell said, “how all that’s going to work with the state highway department, I’m not exactly sure. That’ll all be coordinated.” Russell pointed out that the funds are the local share for the project. “If there is any money left over the state doesn’t require, it can be used for other projects” like road improvements.

Justice Ricky Arnold, referring to the reserve fund, asked what happens in the event the county’s sales tax collections come up short. Russell assured that would only mean it would take longer for bond holders to get the county its money. Arnold asked: “So we wouldn’t have to come up with the money from somewhere else?” Russell replied, “No.”

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Justice Albert Neal asked how much was projected to be left over after the bond issue was paid. Holsclaw responded that, based on collections from the past month, an estimated $1.3 million would be available for economic development. “That number will change every month as collections come in,” Holsclaw said.

Tucker reported that sales tax collections “has been the most it’s ever been for every month this year.” The judge said July’s tax collections was a record for that month. “We’re doing really good on sales tax collections,” he added.

The court suspended the rules to avoid reading Ordinance 2021-16, a 22-page document, in its entirety. All three readings, as well as the adoption of an emergency clause, were passed unanimously.

Tucker called the bond issuance a “big accomplishment for Clark County.”

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