The Hempstead County Quorum Court on Thursday unanimously approved placing before voters an item on the Nov. 3rd ballot asking permission to issue up to $13.5 million in bonds for improvements at Southwest Arkansas Regional Medical Center, the next step in financing upgrades made possible by the three-quarter-cent county sales tax approved by voters last month.
The meeting can be seen in its entirety below the photo.
A bond issue allows a government to borrow money up front for major capital improvements and then repay the debt over time. In this case, no new tax would be created. Instead, if voters approve the Nov. 3rd ballot measure, the county would pledge revenue from the three-quarter-cent hospital sales tax already approved by voters in June to repay the bonds over the ten-year life of the tax.
The financing plan would allow the county to begin long-needed improvements immediately rather than waiting years as sales tax revenue accumulates. County officials have said the work includes replacing aging equipment, repairing the hospital roof and making other improvements necessary to strengthen operations at Southwest Arkansas Regional Medical Center which operates under county ownership of its physical property.
The action came during the quorum court's regular July meeting in the third-floor courtroom of the Hempstead County Courthouse.
The three-quarter-cent sales tax approved by county voters in June was promoted as a way to stabilize the county hospital, now operated by Pafford Medical Services, after years of financial challenges.
Quorum Court member and head of the budget committee Ed Darling said the hospital tax is expected to generate about $3 million annually and would allow work to begin as quickly as possible.
"We wanted to go ahead as soon as we could gto et the equipment in place, get the roof repaired, and some other cosmetic things that are necessary for the operators to generate enough revenue to survive," Darling said. He explained that while the Critical Access Hospital funding model improves operating reimbursement, "there's no allowance for any capital improvements or equipment."
Bond counsel Ryan Bowman of the Friday, Eldredge & Clark law firm explained that Thursday's ordinance does not ask voters to approve another tax."The voters of the county approved last month the levy of a new three-quarter cent sales and use tax for the hospital," Bowman said. "You're now asking the voters to approve issuing bonds secured by the collections of that tax."
Bowman said Arkansas law requires separate voter approval before debt secured by a tax may be issued. "So again, no tax increase other than what the voters have already approved," he said. "They are simply giving the county the authority to use those tax collections to issue bonds for the improvements at the county hospital."
He said the proposed bonds would have a maximum principal amount of $13.5 million and could not extend beyond Sept. 30, 2036, when the current sales tax is scheduled to expire unless renewed by voters. If approved in November, the quorum court would, in a meeting early next year, authorize the bond sale, allowing construction funds to become available during the first quarter of 2027.
The court unanimously adopted Ordinance 2026-8 after one entire reading and two by title only. The ordinance specifies an item be placed for approval on the November 3rd ballot making clear bond proceeds would finance acquiring, constructing, furnishing and equipping improvements to the county-owned hospital. Any sales tax collections not required for debt payments would remain available for other lawful hospital-related purposes under the existing tax authorization.
Immediately afterward, justices unanimously adopted Ordinance 2026-9 establishing the Hospital Sales and Use Tax Fund, designated Fund 3452, to receive and account for revenue generated by the new tax. The ordinance declares an emergency so the fund can begin operating immediately once tax collections begin.
The court also unanimously approved Appropriation Ordinance 2026-10 amending the county jail budget after spring hail damage to the jail roof.
The ordinance transfers $115,000 from the Jail Booking Fee Fund into the building materials and supplies account to pay for roof repairs while increasing anticipated revenue for the jail fund accordingly.
Another unanimous vote approved Appropriation Ordinance 2026-11 allocating $915.13 received through the national opioid settlement for Hempstead County's Adult Drug Court program.
County officials said Circuit Judge Randy Culpepper provided the requested distribution of the funds. The appropriation includes:
General supplies — $45.12
Special legal services — $141.00
Medical, dental and hospital expenses — $84.60
Miscellaneous expenses — $136.77
Child care assistance — $84.60
Housing assistance — $112.08
Transportation assistance — $84.60
Utility assistance — $112.80
Training and education — $112.84
The appropriations total $915.13.
Before adjournment, Justice of the Peace Jessie Henry observed that many residents might not fully understand why the county must hold another election after approval of the hospital sales tax.
"I think a lot of the general public doesn't understand about the bonds," Henry said.
"They don't," Darling said. He acknowledged that the financing process has created confusion and said county officials intend to continue explaining why separate voter approval is required before bonds backed by the sales tax can be issued. He added that the bond financing would place the hospital "on a competitive stance" by providing the capital improvements needed for long-term operations.
Below photo: Ryan Bowman of the Friday, Eldridge and Clark Law firm presents the details about a plan to place an item on the November 3rd ballot which allows county voters to approve or disapprove the county issuing bonds based on the recently passed 3/4-cent hospital tax. This would allow the county to receive $13.5 million in early 2027 in funds to help improve Southwest Regional Medical Center's equipment, fix its roof and address other needs.
