DALLAS -- Little Rock voters may decide as early as August whether to approve a one-cent sales tax to pay for a $110 million bond program -- the city's largest ever.
City Finance Director John Pryor said Little Rock has decided to seek voter approval of the referendum, which would allow the city to use sales tax revenue bonds for the first time.
"The city has already decided to call the election," he said. "It's just a matter of when."
But first, Little Rock is conducting a national search for a financial adviser to help it develop plans for $110 million of bond-financed infrastructure and other projects. Last week, solicitations were sent to 35 firms, mostly in New York. Responses are due by June 28, and a financial adviser is expected to be named by mid-July. The city then will begin putting together a syndicate to sell the bonds.
"It will not be a local search," Mr. Pryor said.
The one-cent sales tax, which would replace an identical countywide sales tax that was phased out this spring, would raise to 6.5% the total retail rate in Little Rock and generate an estimated $23.8 million in revenue in fiscal 1992.
The tax would secure the bonds and finance some pay-as-you-go features of the proposed $110 million of improvements.
Mr. Pryor said the centerpiece of the 11-point proposal calls for $77 million of tax-exempts to finance a multipurpose center as part of the downtown Diamond Center project.
The total project would cost $88 million and includes expanding the Little Rock Convention Center and building new facilities such as a museum and theater.
Other components of the plan, including a new downtown library, expanded educational facilities, and an international trade center have either been dropped or are still under consideration.
The remaining $33 million of proceeds would be used for other city projects, including infrastructure needs.
When an election is called, Mr. Pryor said voters will decide in one ballot proposal whether the tax will be levied and if it will be used to pay for bonds. Such a referendum usually requires two proposals.
The tax would be collected only until the project bonds are retired, he said, adding, "It will be a tax that is not permanent."
If approved, the issue would be the largest ever for Little Rock, which last issued general obligation bonds three years ago with a $34 million issue.
At the end of 1990, the city had $34 million of outstanding GO debt rated AA-plus by Standard & Poor's Corp. and A1 by Moody's Investors Service, Mr. Pryor said. The city has about $71 million in water, sewer, in airport, and convention center revenue debt.