Nevada County Picayune and Gurdon Times Newspaper Archive

Constitutional Changes Could Affect City

Gurdon City Recorder Tambra Smith said proposed changes for the Arkansas Consti1ution could affect how the city does its business.

One of the most drastic potential changes involved limitations on county and municipal indebtedness. Should this be changed, she said, it would allow the city to enter into lease-purchase agreements of more than a year at a time. "We could make purchase of items needed," Smith said, "like police cars."

However, there could be a problem. The proposed wording on the amendment for the indebtedness is not clear, and, Smith said, small cities may not be able to get enough money to do any good.

She said the change could be based on either 5 percent of the city's assets, or based on the five mills. If the amendment is based on the assets, Gurdon could borrow as much as $30,000. On the other hand, if the figures are based on the millage rate, the city would only be allowed to borrow about $500 per year.

These changes, Smith said, were discussed and approved, along with others, at the recent meeting of the Municipal League.

Other changes proposed and approved by the league include allowing 10 percent of total registered voters to petition for repeal of city ordinances. Currently, it takes 15 percent of those who voted in the last mayoral election.

The Municipal League also opposes doing away with tax on foodstuffs.

Bill Fleming, OF counsel with the league, said, the problems cities have with indebtedness is the council members are elected for two-year terms, while the mayor is elected for four years. "They have no incentive to do any long-range planning."

Under existing law, Fleming said, cities can enter into lease-purchase agreements, but can't be in debt for more than a year at a time. This means thelease must be renewed annually and budgeted into the city's appropriations.

Fleming said municipalities can ask for sales tax for two years for capital improvements, but this must first be approved by the voters. Overall, he said, cities can have up to 4 percent sales taxes, in addition to the state's 4.5 percent.

Another issue the league is fighting for in the proposed constitution deals with mandates services. This is services the state says cities and counties must provide to the citizens therein. The league's stance is if the state issues mandates, it should also provide funding for them.

Acts 916 and 917 are also under fire. These are the acts which state schools must have millage rates of at least 25 mill for maintenance and operation, and includes a penalty for those districts which do not approve the aforementioned millage rates.

Fleming said when these two laws, passed by the 1995 General Assembly, were approved, they were reversed. Act 916, he said, has the 10 percent surcharge on state income tax, while Act 917 would affect a district's turnback funds.

"They were labeled in the wrong order," he said. A suit could be filed to determine which of these will be the dominant act, Fleming said. Currently, the way the law is written, Act 917 would be, because the latter act takes precedent over earlier acts.

The Municipal League is also seeking repeal of the Davis-Bacon Act. This is a federal law passed during the Depression of the 1930's, requiring cities to pay minimum wages on construction contracts, and picks the highest wages possible for the projects.

Fleming said bidders must agree to pay these higher wages, and, consequently, this causes the cost of projects to go up. "We've been fighting this for 25 or 30 years, with no luck," he said.

The Davis-Bacon Act requires workers on allconstruction and rehabilitation projects on which the federal government contributes $2,000 or more in funding be paid the "prevailing wage."

This requirement inflates the cost of public projects, which costs the taxpayers more. It also, by costing more, diverts funds from other worthwhile projects.

According to information in the league's Policies and Goals manual for 1995-96, a bill exempting the purchase of food from state sales tax was introduced during this year's regular legislative session.

Should this law ever be passed, and extended to local sales taxes, it will decrease municipal sales and use tax revenues by about 30 percent.

"If we lost the food tax, it would kill us," Smith said of city revenues.

During a recent Municipal League meeting, Smith was placed on the advisory committee.