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Minutes for the City Council meeting on December 3, 1956
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The City Council of the City of Jonesboro, Ark. met in regular session on the above named date at 7:30 p.m. in City Hall. There were present: Mayor, City Attorney, City Clerk and the following named Councilmen: Keister, Fritz, Field, Copeland, Stricklin, Powell, Snow, Hamilton and Hart. Absent: Johnson.
Captola Bennett presented the report of the Colored Community Center to the Council. The November report was accepted.
Mr. Ray Worthington, Chamber of Commerce president, filed with the Council a petition containing over 60 names of business men of Jonesboro urging the City Council to approve issue of bonds for rental of parking lot as described in Ordinance #929. Mr. Stricklin offered the following ordinance and placed it on the first reading:
AN ORDINANCE APPROVING PROCEEDINGS UNDER ACT NO. 468 OF ARKANSAS LEGISLATURE FOR THE YEAR 1949; APPROVING FORM OF BONDS, COUPONS, DEED OF TRUST, PLEDGE AND ASSIGNMENT OF PARKING METER REVENUES, AND DIRECTING EXECUTION AND DELIVERY OF SAME FOR THE PURPOSE OF PROCURING FUNDS FOR THE RENTAL OF PARKING AREA; DECLARING AN EMERGENCY AND FOR OTHER PURPOSES
Mr. Charles Frierson read the ordinance in its entirety. In the discussion, Mr. Keister made the following statement and asked that the statement be a permanent part of the minutes:
In the consideration of the matter before this Council it seems to me that the most important aspect of the transaction has been completely ignored, namely its legality.
Act 12, Section 5 of the Constitution of Arkansas provides as follows:
No city, county, town or other municipal corporation shall become a stock holder in any company, association, or corporation; or obtain or appropriate money for, or loan its credit to any corporation, institution or individual.
It is true that this ordinance is described as an ordinance for the leasing of off-street parking facilities. However, if its legality is ever challenged, surely the court would be guided in its decision by the actual intention of the parties and not solely by the wording of the document. If the sale of alcoholic liquor, for instance, is illegal, a bootlegger can hardly escape prosecution by dropping a little dry ice in his product, and entering into an agreement with his customer to call the liquid carbonated water.
If the Jonesboro Parking Authority were to proceed in their accustomed manner to provide off-street parking facilities they would arrange for the outright purchase of land at a reasonable price and an effort would be made to market the bonds at the lowest possible rate of interest. It is also rather doubtful that they would locate such parking facilities in a place where they would serve exclusively or almost exclusively the customers or employees of a single enterprise.
In this instance the city agrees to pay $60.00 for a fifteen year lease on property whose market value has been estimated at $14,000, and to issue bonds bearing 5-1/2% interest, a rate more than fifty percent greater than that borne by any of the city’s current indebtedness.
It is then provided that the lessor in this transaction, The Peoples Property Association, pays to the lessee, The Parking Authority, the full price of the lease plus interest at 5-1/2% by assuming the city’s debt on a $60,000 bond issue. Either the People Property Association is paying $60,000 plus interest for nothing of value, in which case the agreement is lacking one of the essential elements of a valid contract, namely consideration, or it is paying for the loan of the City’s credit which is prohibited by the Constitution.
A court in considering the true nature of this series of transactions would surely review the other evidence such as the minutes of the City Council, the Parking Authority, and the Chamber of Commerce, and the articles appearing in the local paper. All such evidence is overwhelmingly in favor of the opinion that the City contemplates lending its credit to a private corporation.
The following items are illustrative:
1. The City was approached for assistance in this matter, only after it was ascertained that the full amount needed for expansion of the Frolic Footwear plant could not be raised by sale of bonds to private investors.
2. The amount of the parking lot rental was precisely the difference between the $250,000 needed and the amount which could be raised by sale of bonds to private investors.
3. The rate of interest on City bonds, from which the income is tax free, is to be the same as that of the People’s Property Association bonds.
4. The local banks will purchase the People’s Property Association bonds only when they are bolstered by additional City bonds.
5. Even though the parking situation is no different than it has been for several months, the City Council has been subjected to a considerable amount of pressure to act with great speed, so that the Frolic Footwear expansion might go forward. Four days after the matter was first presented to them informally, they were urged to suspend the rules and pass the ordinance without further study. They did so, although less than a majority of the entire membership of the Council indicated whole hearted support of the measure.
6. A vigorous campaign of almost the proportions of a religious revival has been waged to gain community support of the ordinance before us, but the alleged purpose of providing off-the-street parking facilities has scarcely been mentioned. The Council has been given fulsome praise for its supposedly wholehearted-support of the expansion program of Frolic Footwear and it has been implied that anyone not in favor of the plan presented to the City Council is not interested in the industrial progress of Jonesboro.
All of the evidence seems to me to indicate a very doubtful legal basis for this ordinance and it is solely on those grounds that I would oppose it.
I would like to commend the Chamber of Commerce for the zeal they have displayed in their efforts to increase the employment opportunities in Jonesboro including this particular campaign.
My only fear is that they have let their enthusiasm for increased payrolls and resulting increase in business activity obscure the fact that they are urging the City Council to take a step of dubious legality, and incidentally that they are advocating an involvement of city government in private business, a policy which the National Chamber of Commerce has always staunchly opposed.
I do not claim to be expressing anyone’s opinion but my own and if the majority of this Council decide that it is both legal and desirable to commit the City to the course of action contemplated here, I would be the last to accuse them of having anything but the best interests of the City at heart. I might point out that it was on my motion that the City Council changed its vote on the matter of suspending the rules and proceeding to an immediate vote on the ordinance as its last meeting after hearing the Chamber of Commerce representative state that immediate action was essential or the whole project would fail regardless of final action on the ordinance. I do not want to be in a position of thwarting the will of the majority by any kind of parliamentary maneuver.
However, I assume that I have been elected to this body to exercise my best judgment and not to be a rubber stamp for anyone’s proposal, and I propose to act on that assumption.
Mr. Keister made the motion, seconded by Mr. Powell, that the rule be suspended and the ordinance be placed on the second reading. Roll was called. All aye. Motion carried. Mr. Keister made the motion, seconded by Mr. Powell, that the rule be suspended and the ordinance be placed on the third and final reading. Roll was called. All aye. Motion carried. Mr. Stricklin moved that the ordinance be adopted with Dr. Fritz seconding. Roll was called. Fritz, Field, Copeland, Stricklin and Powell voted aye. Keister, Snow, Hamilton and Hart voted no. The ordinance failed in accordance with Section 8 of Ordinance 840.
Mr. Hamilton made the motion, seconded by Mr. Hart, that the bills as okayed by the finance committee be paid. Roll was called. All aye. Motion carried.
The City Council recessed and then reconvened. Mr. Powell made the motion, seconded by Mr. Hamilton, that the vote by which Ordinance #930 failed be reconsidered and expunged from the records and that the vote by which said ordinance was placed on its second and third reading be expunged. Roll was called. All aye. Motion carried.
Mr. Powell offered the following ordinance and placed it on the first reading:
AN ORDINANCE APPROVING PROCEEDINGS UNDER ACT NO. 468 OF ARKANSAS LEGISLATURE FOR THE YEAR 1949; APPROVING FORM OF BONDS, COUPONS, DEED OF TRUST AND PLEDGE AND DIRECTING EXECUTION AND DELIVERY OF SAME FOR THE PURPOSE OF PROCURING FUNDS FOR THE RENTAL OF PARKING AREA; DECLARING AN EMERGENCY AND FOR OTHER PURPOSES
Mr. Charles Frierson read the ordinance in its entirety for the first time. Mr. Snow made the motion, seconded by Mr. Hart, that the rule be suspended and the ordinance be placed on the second reading. Roll was called. All aye. Motion carried. Mr. Snow made the motion, seconded by Mr. Hamilton, that the rule be suspended and the ordinance be placed on the third and final reading. Roll was called. All aye. Motion carried. Mr. Powell moved for the adoption of the ordinance with Mr. Snow seconding. Roll was called. All aye. Motion carried. All members present voted aye when roll was called on the emergency clause. The ordinance was given the number 930.
Mr. Powell made the motion, seconded by Mr. Snow, for adjournment. Roll was called. All aye. Motion carried. There being no further business, Council adjourned.