EL DORADO — The El Dorado-Union County Chamber of Commerce is now armed with a $45,000 contract to provide economic development services for the city.
The El Dorado City Council voted unanimously Thursday the use of the city’s economic development tax to renew its annual contract for services with the chamber.
In early 2015, Mayor Frank Hash opted against renewing the contract after hearing about a Circuit Court ruling in Pulaski County that said such arrangements violated the state Constitution.
The judgment stemmed from a lawsuit that was filed against the cities of Little Rock and North Little Rock for similar contracts with chambers of commerce and economic development organizations.
Cities across the state closely followed the case, which had been expected to work its way to the Arkansas Supreme Court. Like El Dorado, several other Arkansas cities temporarily halted their contracts with chambers of commerce and economic development organizations.
A Constitutional amendment that was approved by Arkansas voters on Nov. 8 addressed the issue by authorizing cities to pay chambers of commerce or other organizations to look out for their economic development interests.
Last week, the El Dorado Works Board approved $45,000 from the city’s one-cent sales tax. Fifteen percent of the tax revenue is geared toward economic development projects.
EWB treasurer Alan Gober presented the proposal to the council for final approval on Thursday, explaining that within the 15 percent allotment, 5 percent is dedicated to commercial and retail development, and 10 percent is for economic development, including management of economic development operations.
Based on conservative projections, the temporary tax, which went into effect on Oct. 1, 2015, is expected to generate $50 million over 10 years.
Gober said that in recent years, El Dorado has been planted firmly on the radar of the Arkansas Economic Development Commission, which has directed several business and industry prospects toward South Arkansas.
“With the work that (interim chamber president and chief executive officer) Mike Dumas has been doing for the city and at the chamber, we now have a seat at the table for those discussions,” Gober said, adding that the services provided by the chamber cost money.
He told aldermen that Brandon Barnette, the chamber’s economic development associate, was recently called to a meeting in Atlanta with two days’ notice. Barnette then had to return to El Dorado the same night to meet with an industry prospect the following morning.
Gober said the contract for services would be a one-year commitment.
Hash said he will seek more input from the Arkansas Municipal League on how to draft the contract.
Last week, city officials traveled to the AML winter conference, and Hash said he had received from feedback on the matter. He said AML legal counsel mentioned that state lawmakers are looking to implement instructions on how municipalities should enter into such agreements.
“It won’t materially affect the agreement. We’ll just put in language to satisfy whatever ‘implementing instructions’ means,” Hash said.
Alderman Judy Ward asked if a representative from the city could sit on the chamber’s executive committee now that the city is stakeholder in the chamber.
Dumas said he would check on the matter.
Hash said the city is legally prohibited from becoming a member of the chamber, and he is paying personally to join the chamber as mayor.
In other business, the council passed a resolution confirming that it will abide by the amounts for salaries and wages that were approved for city employees and elected officials in the 2017 city budget.
Hash said the resolution was required by the AML.
Aldermen passed a second resolution adopting operating rules and procedures for council meetings in 2017. The resolution the AML’s procedural rules for municipal officials.
The council also authorized Robert Edmonds, director of public works, to place several pieces of surplus equipment and vehicles up for auction.
Edmonds said the items include old pickup trucks, vans and tractor attachments that have outlived their service life.
Tia Lyons may be contacted at 870-862-6611 or by email at tlyons@ eldoradonews.com.