The Hope Board of Directors met in special session Friday to finalize the sale of $2,435,000 in Waste Disposal Revenue Bonds, completing another step in the city's long-term effort to finance improvements to Hope's solid waste and wastewater collection and treatment system.

The meeting can be seen in its entirety beginning at the 4:48 mark of this video placed on the City of Hope's Facebook page.

The ordinance approved by the board ratified and confirmed the sale of the Series 2026 bonds through the Rural Water Financing Agency. The financing, which amends provisions of an ordinance approved earlier this year, will provide funding for wastewater system improvements while establishing the maturity schedule and other terms governing repayment.

Friday, Eldridge and Clark bond counsel Taylor Marshall told the board the action represented the final step following adoption of the earlier parameters ordinance, which authorized city officials to accept an offer from the Rural Water Financing Agency if it met conditions previously approved by the board.

"We authorized a maximum of $3 million in bonds," Marshall said. "We knew we weren't going to borrow that much, so we're coming back here with an ordinance for $2,435,000 worth of bonds."

Marshall explained that the financing package satisfied every requirement established in Ordinance 1774. Principal payments will begin in 2027 and continue through 2038, while the true interest cost came in at approximately 3.74 percent, well below the board's authorized maximum of 4.75 percent.

He said two term bonds were incorporated into the repayment schedule after technical changes became necessary before the bond sale could be completed.

"We had to go back and kind of fix that, and that's why we're here today," Marshall said.

Public finance consultant Cheryl Schluterman explained the adjustment resulted from federal requirements governing municipal bond offerings. She said the first and final maturities originally were below the $100,000 denomination threshold required to avoid preparation of a more extensive offering document.

"All we did was change it from the technical term of a serial bond, which is every single year, to a term bond," Schluterman said. "The math still works out the same."

Schluterman also explained why the stated coupon rate of 5.2 percent differs from the city's actual borrowing cost. "You're not truly paying 5.2 percent," she said, noting investors are paying a premium above the principal amount, reducing the city's effective borrowing cost.

She explained several methods exist for calculating municipal bond interest rates, but said the true interest cost provides the most accurate comparison when evaluating competing bond proposals. "I thought the sale went really well," Schluterman said. "It's been great working with the team at the city."

She told directors the transaction is expected to close July 28 following the required 30-day referendum period provided under Arkansas law.

City Manager J.R. Wilson asked Marshall and Schluterman to clarify federal arbitrage rules that apply to tax-exempt bond proceeds. Wilson noted the board had become familiar with those regulations during financing of the city's approximately $31 million Hope for the Future project approved previously.

Marshall explained Hope will not issue more than $5 million in tax-exempt bonds during calendar year 2026, allowing the city to qualify for the federal small-issuer exception. Wilson said that means if investment earnings exceed the interest paid on the bonds, the city would not be required to rebate those earnings to the federal government.

Schluterman added that the calculation includes other tax-exempt obligations issued during the calendar year, including certain Amendment 78 financings.

Mayor Don Still then entertained a motion to suspend the rules and read the ordinance by title only. In a roll call vote, directors unanimously approved the ordinance ratifying the sale of the Series 2026 Waste Disposal Revenue Bonds and then unanimously adopted the emergency clause, allowing the measure to take effect immediately.

Before adjournment, Finance Director Mark Ross asked those present to remember Doris Brown, the mother of Director Linda Clark in their prayers and noted that Clark's daughter had received encouraging medical news.

Director Kiffinea Talley also asked residents to remove garage sale signs after their sales conclude.

Ross added that numerous political campaign signs remain posted throughout the city following recent elections.

Mayor Still said he would ask code enforcement personnel to address the issue.