concurring in part; dissenting in part. I agree icpart e, dissent in part with the majority opinion. The City of Little Rock agrees that Amendment 65 to the Arkansas Constitution prohibits the City from using monies from its general funds to pay the revenue bonds it authorized in order to acquire land for the William Jefferson Clinton Presidential Park. This is so because Amendment 65 and the Revenue Bond Act of 1987 clearly provide the bonds must be paid from revenues from sources other than taxes or assessments. Thus, unless the voters approved a tax to pay for the land in question, the City cannot use tax proceeds for such purpose. No such election or approval has occurred here. Significantly, the City’s general fund is largely comprised of sales tax proceeds the voters approved for other purposes.
While the City agrees its general revenues cannot be pledged or used to pay the bonds it authorized here, it believes it can pledge user fees from its zoo, parks, and recreation facilities to secure payment of the bonds it authorized, and then replace those user fees with tax monies from its general funds to cover any deficit caused by the City’s removal of the user fees for bond purposes. In other words, the City technically uses its monies labeled “user fees” to secure the revenue bonds it issued, but “tax proceeds” in turn replace the “user fees” to continue funding the City’s zoo, parks, and recreational operations.1 Obviously, the City’s rearranging of its “user fees” and “tax monies” is designed to allow it to do indirectly what Amendment 65 forbids — employ tax monies to secure revenue bonds.
The majority opinion correctly reflects the City’s attempt to circumvent the plain terms of Amendment 65, but it stops there. The opinion states that, while general funds or tax monies cannot be used to replace the user fees pledged to secure the revenue bonds, it is premature to so hold because it has not yet been shown if the City will be required to use its general or tax funds to offset the user fees pledged for revenue bond purposes. I disagree.
In oral argument, the City was asked repeatedly whether its general fund would be used to pay this increased deficit sustained by its zoo, .parks, and recreation facilities, and caused by the City redirecting the user fees revenue. The City implicitly and explicitly agreed in the responses it made in oral argument:
City’s counsel said, “[I] do not deny that the general fund will continue to support the parks department. ...”
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City’s counsel answered, “Right” to the question, “[You] are creating a tremendous deficit in the use or in the facilities such as the zoo, and the fitness center, and the golf courses, and you are going to have to make up that deficit with general revenues.”
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After being asked, “If [the City] had not had the general revenues available to repay the user fees that were used to secure this bond, could the City have issued those bonds,” the City’s counsel said, “[I]f you are asking if, because of the use of the user fees, the [City] had to use general revenues to support a department such as the parks department in a manner that it didn’t have to because it used to collect (sic) user fees, then I think the answer to that question is yes .. . as long as the [City] doesn’t engage in deficit spending.”
From the foregoing, the City was quite candid that general funds (containing tax monies) would be used to reimburse the user fees pledged to secure the revenue bonds. However, the City simply sees no wrong in switching or redirecting these funds. Instead, the City responds, stating it has always used general funds to make up deficits incurred by its programs; that is true, but Amendment 65 was not involved then and its programs’ user fees were not being diverted to secure revenue bonds.
Obviously, general tax funds can be used to supplement the City’s zoo, parks, and recreation programs, but those tax funds cannot indirectly be used to secure Amendment 65 revenue bonds. Unlike the conclusion reached by the majority opinion, the City’s counsel’s remarks reflect an honest assessment that general revenues must be used to improperly replace its user fees.' The city manager, Cy Carney, acknowledged that past deficits in its programs, such as the zoo, golf courses, and fitness center, have been paid by the general fund. He further admitted pledges of user fees from these programs will create a need for additional revenues to make up those program deficits. Where will the City get those needed monies? Mr. Carney identified reducing the number of city employees. Of course, this would give the City additional revenues to spend from general funds, since such salaries are paid from those funds. Mr. Carney’s answer merely confirms the source or revenue stream it looks to in order to pay the debts incurred by its programs. The City’s evidence merely reveals the obvious — general revenues are and will continue to be those used to meet the City’s increasing program deficits. For that reason, I would reverse the chancellor's decision.
In conclusion, although most can agree with the laudable objective intended by the City, the issue involved here transcends the lofty goal of acquiring land to construct a presidential library. If the City’s redirecting of funds is permitted in these circumstances, a new mechanism for municipal-deficit spending will have been approved for the first time in this state.2
In short, the mechanism designed by the City of Little Rock provides a creative means of using tax funds to aid in the financing of municipal capital improvements or other possible programs secured by Amendment 65 revenue bonds. Of course, if approved, other municipalities will surely follow suit in financing new projects, since no voter approval would be required. If the municipalities have sufficient revenues to underwrite such bonded indebtedness, and at the same time underwrite its ongoing programs, no problem would ensue. It is only when municipalities have limited revenues and cannot meet debt service and pay for its programs that financial trouble will occur. Someone then will be called to pay that debt. In those cases, new revenues must be found and likely that means taxpayers will be asked to approve a new tax.
The City covenanted to provide sufficient funds to insure the efficient operations and maintenance of these facilities.
The City suggests a similar situation was involved in Rankin v. City of Fort Smith, 337 Ark. 599, 990 S.W.2d 535 (1999). However, in Rankin, Fort Smith issued revenue bonds to fund the building of a parking garage and the bonds were to be paid from revenues collected from the parking garage and meters. While taxpayer, Rankin, alleged Fort Smith used its general funds to pay the revenue bonds in violation of Amendment 65, the proof showed otherwise. In fact, the proof showed the parking facilities’ revenues were sufficient to pay the debt service on the bonds.