City says Issue 3 won’t affect HSMP

The Hot Springs Board of Directors approved a $100,000 contract for economic development services earlier this week with the Hot Springs Metro Partnership, a binding agreement made less necessary by the passage of a constitutional amendment last November.

Voters passed Issue No. 3, or the Amendment to the Arkansas Constitution Concerning Job Creation, Job Expansion and Economic Development, by almost a two-toone margin. Section two of the legislatively referred measure amended Article 12 of the Constitution to allow local governments to provide money to private interests for economic development.

The Constitution previously prohibited local governments from becoming a stockholder in any company, association or corporation or providing money for any corporation, association, institution or individual. A Pulaski County Circuit Court Judge ruled in a lawsuit brought against the cities of Little Rock and North Little Rock that payments they made to their respective chambers of commerce without a contract enumerating the services provid-

ed violated Article 12.

According to case filings, Little Rock had only a “nominal contract” with the Little Rock Regional Chamber of Commerce prior to the August 2013 filing of the lawsuit, and North Little Rock had no service contract or letter of agreement with its chamber.

Hot Springs City Attorney Brian Albright said Issue 3’s passage makes a contract stipulating the services HSMP provides less necessary, but reducing the agreement to writing rather than providing the money as a contribution protects both parties.

“(Issue 3) makes it less of a requirement to have a contract for services,” he said. “I think it’s good for both parties to have something in place that spells out what’s expected and what kind of services will be performed. To have a binding contract for services shows we’re getting something in return for the money we’re paying them.

“The city is able to do that type of function if it wanted to staff the personnel and budget for it, but over the years the city has taken the position that (HSMP) is in a better position to be able to do that.”

The ordinance approving the 2017 contract also waived the city’s competitive bidding requirement. The contract calls for the city to be billed quarterly and lists a scope of services containing 20 items related to business recruitment, retention and expansion.

They include employing a full-time downtown development director and a full-time economic development manager, completing visits and surveys with at least 75 primary job providers to identify challenges and opportunities for growth and keeping up communications with a managed database of 1,200 professional site consultants. It also requires HSMP to design a retail page on its website that can be linked to the city’s website.

The board also adopted an ordinance approving a $12,500 contract for services with HSMP for a retirement relocation program, but HSMP President/CEO Jim Fram told the board the program is casting a wider net and no longer focusing on retirees.

“We have stricken the word retirement from our relocation program, because we’re targeting relocation of any age group or occupation that wants to relocate to the community,” he said.

Fram said HSMP has launched Splash!, a digital publication, to spearhead the relocation program. It can be accessed on The Greater Hot Springs Chamber of Commerce website. HSMP shares staff, office and executive leadership with the Chamber of Commerce and reimburses it for administrative expenses. According to the monthly profit-and-loss statement Fram provided the Garland County Quorum Court Finance Committee last month, the HSMP reimbursed the Chamber of Commerce for $26,576 last December.

The county appropriated $75,000 to contract with HSMP this year but releases the funds monthly. Last year, the county withheld $51,333 from the public-private nonprofit corporation’s 2016 funding over concerns about its level of advocacy for county interests. The county chose not to contract with HSMP in 2015.

Fram told the city board that some of the money the county provides contributes to the relocation program.