Board sets Sept. 11 special election for museum project
The Hot Springs Advertising and Promotion Commission says the new exhibition gallery proposed for Mid-America Science Museum can’t be built without voters approving a debt issue.
The Hot Springs Board of Directors adopted an ordinance Tuesday night authorizing the Sept. 11 special election for the $2 million bond issue secured by the 3-percent sales tax the commission levies on prepared food and lodging inside the city.
“The commission has agreed to do this out of their budget,” Visit Hot Springs CEO Steve Arrison told the board. “There will not be any new taxes involved whatsoever. Just due to the law, we have to come to the citizens and ask them permission to use some of the money we’re already collecting to fund this capital project.”
The commission said it will cost about $200,000 a year to service the debt over the 10-year life of the bonds, an obligation representing 2.33 percent of its $8.59 million in annual projected revenue. Tapping the $10.39 million it had on hand as of Wednesday isn’t feasible, the commission said, as $8.42 million of that is dedicated to the capital endowment account the commission created in 2007 to maintain the Hot Springs Convention Center and Bank of the Ozarks Arena.
The City County Tourists Facilities Aid Fund seeded the account with
money pledged to the expansion of the convention center. The debt issued for the expansion was retired early, allowing the commission to direct excess proceeds to the capital account.
According to a 2001 amendment to the Tourist Meeting & Entertainment Facilities Law, Hot Springs was one of eight cities the fund benefited, receiving more than $28 million during state fiscal years 2001 to 2012.
Arrison said interest generated by the account funds capital projects at the convention center and arena. The principal is available should a large capital need arise, he said.
“The arena is about to turn 15 years old, and the convention center is 20 years old,” he said. “They don’t look that old primarily due to the restricted fund and the interest we pull from that for projects at the convention center and arena.
“It’s a smart financial move to spread that debt out (for the museum project). We don’t want to spend ourselves down to zero. We don’t want to be like other cities that when they need a million dollars for a new roof at the convention center, they have to ask the city for money from the general fund.”
The museum is owned by the commission, but an autonomous board of directors has governed it since 2005, according to its Internal Revenue Service filings. Museum Executive Director Diane LaFollette told the city board Tuesday night the 7,000-squarefoot expansion will attract sought-after exhibits, building on the 110,000 visitors she said the museum has averaged annually since completion of a 2015 remodel.
“It would make the museum the largest museum in the state for science exhibits,” she said, noting that in its current form, the museum is conservatively estimated to generate $14 million a year for the local economy. “We can get exhibits we can’t get anywhere else, which would not only be great for Hot Springs. It would be great for the entire state.
“It would have temperature and humidity controls, so we can get precious artifacts we can display and protect, which is a requirement of many exhibit companies.”
The commission adopted a resolution calling for the special election at its meeting last month. Arrison told the city board putting the measure to voters in September increases the likelihood the expansion will be completed for the museum’s 40th anniversary next year.
If the measure passes, the museum may be able to begin drawing on the bond proceeds before the end of the year, he said.
“We think it’s very important to our community, not only to our children but to the visitors that come in,” he said. “It’s a process. We need to get it going, so they don’t miss a spring break. So they don’t miss a summer without a place to have these special exhibits that will add economic dollars to the community.”