Law and Order in the Ozarks (Part XIX): More complications regarding the jail

The March 5, 2009, issue of the Newton County Times provides an update on the county jail, the topic of many prior posts. Regular readers will recall that the jail, built more than a century ago, was basically condemned by the state. Voters passed a sales tax increase to pay for a new jail in the November election, but they failed to pass a companion increase to pay for the maintenance and operation of the jail. Never mind. The county may not get a new jail after all because of Amendment 62.

So, what is Amendment 62? Well, according to this week's paper it allows the voters of a city or county to authorize the issuance of bonds for capital improvements of a public nature. The voters must first approve the bonds in an election, as Newton County voters did. The problem is that, under this Arkansas law, the maximum interest rate that can attach to the bonds is 2% above the Federal Reserve Rate, and the primary rate now is 0.5%. This means that the maximum rate of interest a local government entity can charge for a bond issue backed by a sales or property tax is 2.5%, and in this market, no one wants bonds bearing such a low rate of return. Thus, the state's interest rate limitation hurts local governments. Indeed, it also limits their ability to garner matching funds from federal programs that are contingent on raising state and local revenues.

So, will Newton County ever gets its new jail?

In other news, the Ozark Mountain Regional Public Water Authority recently drafted water usage agreements for member utilities to sign. Getting these leases signed is the "last major obstacles to possibly qualifying for part of Arkansas' share of federal stimulus funds." The Association plans to treat water from a lake in a neighboring county and to then transport it by pipe to about 20 rural water associations in three counties.