Jonesboro Committees Discuss Shelter Insurance Building Purchase - August 6, 2026

The Finance & Administration Council Committee and the Public Safety Council Committee of Jonesboro, Arkansas, held a special called joint meeting on Thursday, August 6, 2026, at 4:00 PM at the Municipal Center to discuss the proposed purchase of the Shelter Insurance Agency Building. The meeting was a public discussion only, with no votes taken. Mayor and city staff presented details of the proposed acquisition, funding strategy, and timeline, and committee members and one member of the public offered comments and questions.

Public Comments & Testimony

• Patty Lack (4108 Forest Hill Road) stated she was neither for nor against the purchase but questioned whether it is the city's top priority. She expressed surprise that an offer had already been made before public discussion, raised concerns about potential hidden costs (e.g., renovations to the Caraway facility), noted the city's tight budget and unfilled positions, and cautioned against assuming the November safety tax would pass. She also mentioned that taxpayers are concerned about spending accountability, referencing the unresolved Danny Kapalis investigation.

Discussion Items

Opening Presentation

• Mayor opened by thanking property owners and staff for their work over the past year. He described the Shelter building as a "rare find" that nearly exactly fits the city's needs at a fair price, offering office space, furniture, a favorable location, and potential resale value. He emphasized the need to consolidate police operations into two facilities and return community centers to full public use.
• Police Chief Elliott provided facility details: 14,418 square feet, 51 parking spaces, 2.05 acres, electric and natural gas utilities. The building has 29 offices, a conference room, and a break room, with 95% of contents included in the purchase. The intended occupants include police administration, records, criminal investigations, community outreach, and DARE officers. Other divisions would consolidate at the Caraway facility.

Funding and Financial Analysis

• Purchase price: $2,750,000. Renovation estimate: $250,000. IT infrastructure: $80,000. Total: $3,000,000.
• Steve Pertie (finance) explained the funding plan: a short-term Amendment 78 loan based on the city's full faith and credit, repaid from the general fund. Four banks responded to an RFP; Arvest Bank offered the most favorable rate at 4.83%. Over a five-year amortizing loan, interest cost would be $382,820, offset by interest earnings of about $237,000 on the $3 million retained in city accounts, resulting in a net cost of $145,043.
• Insurance savings: The unoccupied justice complex costs ~$16,000/year, and old City Hall on Washington costs ~$7,000/year, totaling ~$23,000. The new property would cost ~$9,000/year, saving ~$14,000 annually.
• Pertie addressed why not use reserves: maintaining reserves (about $12 million) supports grant matches, preserves investment earnings, and keeps capital improvement funds available. He cited a $4 million capital improvement appropriation still pending.
• Budget impact: The loan requires about $700,000/year in payments. Sales tax returns are trending $840,000 ahead of last year and $80,000 over budget. General fund revenue is ahead of budget by ~$200,000, and uncommitted franchise fees total ~$427,000. These sources would support the obligation.

Timeline and FAQs

• Projected timeline: Special meeting August 6; Finance Committee review on Tuesday; City Council consideration (resolution and ordinance) shortly after; MOU expires if not chosen; closing August 21; renovations begin within three days; two-month move-in; demolition of the Washington facility at end of year.
• FAQs covered: Why a temporary facility is needed (current scattered locations across five sites, inefficiencies, public inconvenience); why not build a new downtown station (cost over $20 million, no current funding, two-year construction); whether a new facility still needed if a safety tax passes (yes, a temporary location is still necessary); why buy instead of rent (5-year lease estimated at $1.312M, 10-year lease at $2.6M, with no ownership asset); property appraised by independent appraiser at $187-$204 per square foot, correlating to $2.7M-$3M, excluding contents; long-term plan is a new police department on Washington Avenue, with the Shelter building as an interim option.

Committee Questions and Concerns

• Chairman Hafner praised the loan rate (4.83%) as aggressive and favorable, expressed agreement with purchasing rather than using reserves, and asked about growth room. Chief said the Shelter building has one office left day one, with plans to add two more offices; both facilities could accommodate the department for 20 years.
• Dr. Charles Coleman expressed support but pressed for equal urgency on employee raises and relief for the E. Boone Watson Center, which he said the community constantly asks about. Chief confirmed the goal to vacate the center by November, possibly October.
• Mr. McLean asked for a detailed financial analysis showing the impact of the $700,000 annual payment with the police department fully staffed, and requested an actual building inspection (roof, water spots). Staff noted an architect and engineers had reviewed the facility, found no water issues, and identified minor HVAC changes; McLean requested the report and insisted on a full inspection before purchase.
• Mr. Miller voiced support, saying "I don't want perfect to get in the way of good."
• Dr. Anthony Coleman echoed concerns about the $700,000 impact and the need to project staffing and salary needs.

Key Outcomes

• No votes were taken, as this was a discussion-only meeting.
• Staff were directed to provide: a financial impact analysis showing the effect of the $700,000 annual payment under a fully staffed police department; a comprehensive building inspection report (including roof and water stains); the identity of the appraiser; and a detailed HVAC report.
• The next steps are the Finance Committee review, followed by City Council consideration of the resolution and ordinance, with a planned closing on August 21, 2026.