In 2018, a coalition of elected officials, business owners and educators in Saline County recognized the need to bolster the local workforce to attract industry. It was determined that the county could benefit from a career technical-education center available to students in the county’s six school districts.
Working with Stephens, the independent financial services firm in Little Rock, the county determined a 0.375 percent sales-and-use tax could provide the funds necessary to support bonds to generate the roughly $43.5 million cost of the facility.
Proceeds from the tax would be dedicated to repayment of the bonds, and the tax would be terminated once the bonds were paid. Voters approved in November of that year, and the following April the tax went into effect.
Leigh Ann Biernat, executive vice president and head of public finance at Stephens, said the decision was made to not include a debt service reserve. The Saline County offering, she added, was well received in the marketplace, having more than 160 percent debt service coverage and an ‘A1’ rating on the bonds.
At the time the tax was issued, it was expected to take 12 years to pay off the bonds at 0 percent annual growth in the tax — 10 years assuming 3.5 percent growth.
“These bonds are secured by a bond tax, and they are projected to be paid in full this year, earlier than anticipated due to the growth in the Saline County sales tax,” Biernat said. “Once the bonds are paid in full, the tax will no longer be levied.”
The Stephens public finance division works with government entities and 501(c)(3) nonprofit organizations as municipal advisor, underwriter or placement agent in the issuance of debt, typically in the form of municipal bonds, to help fund public projects. The firm works with cities and counties, school districts and higher education institutions, hospitals and health care organizations, state agencies, and water and sewer entities.
“By fostering strong relationships with local and state officials, we gain a deep understanding of their funding needs and provide tailored financial solutions,” Biernat said. “Recognizing that public officials can change with each election cycle, we also offer educational materials — such as specialized resources for new mayors — to ensure they are aware of the financial tools available to them.”
The Saline County Career & Technical Campus has been a big hit, offering a variety of programs designed to prepare students for certain career paths, including automotive service technology, construction, cybersecurity, health sciences, HVAC repair, industrial technology, manufacturing, medical professions, networking and welding.
Participating high school students can earn college credits through program partner Arkansas State University Three Rivers in Malvern, which also provides program instructors.
“We believe our expertise is most valuable when we are involved early in the planning process,” Biernat said. “Because we are typically compensated only when a transaction closes, our approach is long term and relationship driven. Our role includes helping clients identify revenue sources to repay debt and determining how much funding can be generated through bond issuance.”
In Arkansas, most tax-secured bonds require voter approval before they can be issued, she said. “Stephens assists in financial modeling related to the ballot initiatives outlining the proposed use of bond proceeds — for parks, road improvements, etc. — and the impact on project funds if some of the initiatives are approved by voters and some are not; creating financing calendars to ensure proper timing of funding measures; and, if requested, engaging with constituents to explain the financing process and how the bond-issuance process works,” she said.
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