Sports Complex Being Paid Off Early

FARMINGTON -- A special 1-cent sales tax to pay for the Farmington Sports Complex will go off the books at the end of the year.

Jimmy Story, city finance director, said the city will have enough funds to pay off a $1.75 million bond issue in December, nine months early. Bank of the Ozarks serves as the city's bond trustee.

"I'm excited about it," Mayor Ernie Penn said last week. "Number one, the tax is going to leave. Number two we paid it off early like we projected and at this point in time, we plan to stay with the revenues we are receiving from our businesses in town and operate our city with those revenues."

Farmington City Council passed an ordinance Monday night to abolish the temporary tax after the bond debt is paid off in December. The last day to collect the tax would be Dec. 31.

Farmington voters approved a special 1-cent sales tax May 18, 2010, and the city issued construction bonds July 23, 2010. The city began collecting the new tax in October 2010. At the time, the temporary tax was projected to last six years based on current collections but city officials thought it would be paid off in five years due to expected revenue growth.

In 2010, the city of Farmington collected $385,405 from the 1-cent sales tax, said Kevin Faught with Stephens Inc., investment firm in Fayetteville. In 2013, this increased to $452,601. Sales tax revenues for 2014 are running ahead of 2013.

"They are up in every month in 2014, compared to last year," Faught said.

Penn said the city will be able to retire the debt early because of revenue growth in Farmington.

"Farmington has always had a regular growth in sales tax revenue anyway," Penn said. "We anticipated we would be able to pay it off early. This is a great thing. It just goes to show when you spend money for a great facility, people will come to your town."

By using a sales tax to pay for the complex, the city benefitted from visitors spending money in town, Penn said, adding, "It was a win-win deal for our community."

Sales tax revenue is distributed by the state two months in arrears, which means taxes collected from the ballpark 1-cent sales tax in November and December will be distributed in January and February 2015. Penn said the bond issue ordinance allows the city to use this extra money as long as it goes to the park.

City officials are proposing to use the extra revenue to completely renovate all six infields at the sports complex with a mix of red clay/sand and conditioner.