The city of Mayflower will hold a special election in September with the hopes of passing a sales tax increase to better the city’s financial standing.
Officials have proposed a one half of one percent (0.5%) increase to build a reserve fund.
Currently, the reserve fund is running on “less than a week’s” worth of funds. Financial Director Dale Carter said the city hopes to build a safety-net with its reserve account that can be used when national disasters and other emergency situations transpire.
To be comfortable, the city needs to have at least three months worth of its financial obligations saved in the reserve fund. The fund, which needs about $180,000 to $200,000, would also be used for matching grants to further build the city.
“It really helps to develop the city,” Carter said of having reserve funds available. “We would just let the money accumulate as much as possible, that way the money is there when we need it.”
The city’s current sales tax rate is 2%. If residents vote in favor of the proposed increase, the rate would be 2.5%.
Officials expect the increase to generate around $16,000 each month specifically for the reserve fund.
Mayflower Mayor Randy Holland said he has high hopes the proposal will pass.
“I want to get the reserve up … for disasters,” he said. “I’m going to try to establish a fund for matching monies for these grants. You have to have that money in the bank.”
Referencing a grant the city is not eligible due to a lack of funds, Holland said having a stream of revenue to build the reserve fund would allow officials to apply for improvement grants.
Holland and other officials planned to join the Safe Routes to School Program offered by the Arkansas Department of Transportation. However, the city did not have the funds to match the 80/20 grant.
The grant is for $400,000 and would require the city to pay $80,000. The funds would have to be provided up front to receive the grant. Holland said the grant would benefit the city greatly because it would allow officials to install sidewalks for the district’s students.
The special sales tax election will be held Sept. 10 at Mayflower City Hall. Early voting will be from 8 a.m. to 4:30 p.m. Sept. 3-6 and 9.
Staff writer Marisa Hicks can be reached at email@example.com.