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City approves $2.2 M MAD funding request

Monday, February 11, 2019

By Tia Lyons

Staff Writer

The El Dorado City Council has resolved a months-old issue regarding a $2.2 million funding request from the Murphy Arts District.

With guidance from the Arkansas Municipal League, council members voted Thursday to approve the request, which will cover cost overruns for the construction of the MAD amphitheater and playscape.

The money will come from the one-cent, El Dorado Works tax, which is geared toward economic development projects in El Dorado.

With the vote, city officials wrapped up months of discussions with MAD and municipal league officials.

The recommendation came from the council’s Finance Committee, who had met the previous day to discuss the matter.

Council Member Dianne Hammond, who heads up the Finance Committee, made the motion Thursday to approve $2.23 million for the funding request, which is in addition to $13.4 million the city previously pledged from the El Dorado Works and former El Dorado Forward taxes to assist with the development of MAD.

The El Dorado Works Board, which administers the economic development tax, approved the $2.2 million funding request last October.

However, the city council tabled a vote on the matter days later, having agreed with a suggestion by former Mayor Frank Hash to seek legal counsel from the AML.

MAD had also contacted the municipal league on the matter.

A purchase-lease agreement between the city and MAD calls for MAD to use city tax dollars to acquire the property; pay for construction costs; turn the deeds over to the city; operate and manage the property; and lease the property from the city for a nominal fee.

When MAD presented the funding request last fall, Hash said the property deeds had not yet been turned over to the city.

The request came upon the completion of phase one of the two-phased MAD development project.

At the time, Austin Barrow, former MAD president and chief operating officer, provided a breakdown of expenses that exceeded “loose (cost) estimates”, as outlined in the purchase-lease agreement, for the construction of the playscape, amphitheater and a parking lot.

Additional costs included:

• A total of $775,231.47 for the playscape, the most significant of which is $679,046.18 for an increase in overall acreage, which required additional playground equipment; security cameras; 14-foot tall fencing and lighting.

Barrow said then that the land acquisition from Union Pacific Railroad for the playscape came with more acreage than initially planned, bumping the size of the play area from 1.5 acres to 2 acres.

The actual cost of the property came to $492,967.55.

An environmental impact study for the railroad property was $59,217.74, and price-tag construction from a loose estimate of $2.2 million to $2.9 million, Barrow reported then.

• Several change orders for the amphitheater, the largest of which was $282,520 to go from grass to artificial turf, drove up construction costs for the amphitheater from an estimated $6.4 million to $7.8 million.

The purchase price for the amphitheater property was $680,000.

Barrow also explained that the $2.2 million request was based on the distribution of the El Dorado Works tax, which allots 12 percent of tax revenues to the development of MAD, formerly known as El Dorado Festivals and Events, Inc.

In October, El Dorado Works Board member Greg Downum said he took issue with the way the board was notified about the overage.

“I’m just concerned about the level of overage, what’s been overspent,” Downum said. “I’m just not comfortable with how the process was followed. I think the notification could have come earlier.”

When Barrow reiterated that MAD spent the past several months closing out invoices and final expenditures, Downum maintained his stance, saying, “As soon as you knew there would be a significant overage, the proper thing to do would have been to come to the board. We could have gotten a heads-up.”

Barrow acknowledged that “things could have been handled differently” and agreed to submit invoices and documentation to the city.

On Friday, Hammond said Pam Griffin — who succeeded Barrow as COO after having served as MAD’s chief financial officer for four years — had since provided the invoices and other pertinent information.

The Finance Committee reviewed the information Wednesday.

The municipal league concluded that the city may pay the invoices, noting that the expenditures cover construction and improvements to the amphitheater and playscape, both of which are owned by the city.

Hammond said title searches had also been performed to make sure there is no outstanding debt tied to the properties.

“When we turn over the money, we will have those deeds in hand … When we receive those deeds, they’ll be cleared of any debt,” she said.

Prior to casting a yes vote to the MAD funding request Thursday, Council Member Andre Rucks said city officials will have to exercise patience with MAD as the arts and entertainment district grows.

Saying that he supports MAD, Rucks — who represents Ward 3, Position 2 — also urged city officials to take a closer look at where city tax dollars are being allocated.

“The issue in my ward is poverty and I’m fighting for economic growth in my ward,” he said. “We need to get a plan together for our wards before we approve anything else and make sure our tax dollars are stimulating our economy and in that ward as well.”

Tia Lyons may be contacted at 870-862-6611 or tlyons@eldoradonews.com.