City Council elects to continue in sidewalk grant program, approves $250K hospital maintenance fund : KZHE News Blog
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City Council elects to continue in sidewalk grant program, approves $250K hospital maintenance fund

by J.D. Bailey on 05/25/21

With a June 1 deadline looming, the Magnolia City Council on Monday voted unanimously to continue the city’s involvement in a sidewalk grant program that has seen construction and refurbishing of numerous local sidewalks over the past few years. The program, which is funded by the state, grants 80% of the sidewalk building costs, leaving the city government on the hook only for the remaining 20%. The resolution approved this week will keep the city in the sidewalk grant program for another year.

If the council had not approved a resolution this week to remain in the program, the city would no longer have been eligible for the 80%-20% match grants.

“We are applying for another round of funding,” said Magnolia City Inspector David Nelson on Monday as he informed the council about the grant matter.

Sidewalk projects in Magnolia are currently funded by the grant program, including the ongoing Columbia Street sidewalk. On Monday, a $147,000 bid was accepted and approved by the Magnolia City Council to further expand the concrete footpath.

With the match grant, the city will only pay around $29,000 to complete the project. The new build will tie into the Columbia Street sidewalk and run up the east side of High School Drive, cross over Bradley Street, and continue to the parking lot at Magnolia High School’s Ninth Grade Academy parking lot, according to Nelson. The lone bid for the project was submitted by the Bryant-based construction firm, JCON, Inc.

On Monday, Magnolia Mayor Parnell Vann stated that another sidewalk is planned for South Vine, to stretch from Dixie Mart to School Street. With the lead time required for the grant program, though, construction on the project may not begin for another two years, according to the city official.

The area was targeted for new sidewalks after Magnolia Junior High School Principal Gwen Carter recently witnessed children walking in the street in that area and relayed the scene to the mayor.

“That’s a sidewalk that we won’t see, probably until the year 2023,” said Vann. “But (Carter) will be glad to know that something will be done.”

Additional sidewalk projects are not the only pedestrian improvements the city is looking at improving in the future. In March, during his annual State of the City address, Vann stated that he wished to pursue the construction of walking and cycling trails in Magnolia along the local water and wastewater property right-of-ways. But, on Monday, the city leader noted that, after researching the project more, the city only has the ability to use the right-of-ways for water and wastewater utility purposes, and not for the construction of pedestrian trails.

“We don’t have to ability to use the right-of-ways for anything we choose,” he said. “In this case – walking-bike trails.”

The location of the trails, according to Vann, is hoped to stretch from Southern Arkansas University near Hwy. 82 to the Forrest Place Addition area of Warnock Springs Road (Columbia 61) in the northern and eastern portions of Magnolia, as well as near Southern Arkansas University’s Laney Farm, along Columbia Rd. 13 (Old McNeil Highway).

In hopes of continuing the trail endeavor, the mayor on Monday noted that, even with the newly-discovered right-of-way limitations, the city plans to progress with the trails. This time, however, the city will be required to gain permission from individual property owners along the proposed route to use the right-of-ways for walking and cycling.

“We will have to work on easements of the (water and wastewater) right-of-ways that we currently have and visit with those people to see if they will allow us to do that,” the mayor said. “They have the option to say ‘yes’ or ‘no.’”

If the city is indeed granted the proper easement approvals by the property owners, the city government would likely begin the trail project in 2022, according to Vann.

“If they say ‘yes,’ then we will begin next year,” he said. “If they say ‘no,’ then we’re done.”

When asked just how many property owners will need to issue an approval for the trail project to move forward, the mayor said that, at the moment, he did not know.


An amendment in the property lease agreement between the City of Magnolia and Magnolia Regional Medical Center was approved Monday via a 5-1 vote from the Magnolia City Council. The amendment will allow for a $250,000 maintenance fund to be set up by the city and allow the local hospital to use the monies for building and property upkeep. The funds can only be used for hospital maintenance purposes, according to the agreement, and cannot be used for services directly associated with health care, according to the lease.

In August 2020, Magnolia Regional Medical Center signed a 30-year lease with the city after the hospital last year broke away from local government ownership and formed a new 501(c)(3) nonprofit corporation. The move was made in an attempt to boost the financial health of Magnolia’s hospital through higher federal Medicare and Medicaid reimbursement rates. Estimates in 2019 stated that the hospital could be in line for a $750,000-plus annual revenue boost by the move.

The new lease revision limits the maintenance fund only to property and building repair items at MRMC. These items include the following:

  • Roofing
  • Cooling Towers
  • All Chillers, to include compressors and motors
  • Boilers, to include replacement and re-piping
  • Generator, switches, and software
  • Major electrical feed panel
  • Hot water storage tank
  • Elevator major repairs
  • HVAC systems (including air handlers)
  • Fire Alarm system and software
  • Sprinkler System
  • Repairs to major sewage and wastewater drainage systems
  • Structural damages not covered by insurance
  • Any other major repair item not contemplated by the parties, but later agreed upon by the parties as a major repair item related to the building

The fund will be limited to $250,000 and filled by local hospital maintenance fund tax collection. Currently, the fund is full, according to Magnolia City Attorney Mike Boyd.

Hospital maintenance tax collected by the city will be separated from other city tax monies, according to the lease amendment, and placed in an interest-bearing account. Should the hospital be required to spend from the maintenance account, the city will replenish the maintenance account at a rate of $10,000 per month, per the lease amendment. Once the fund reaches $250,000 again, the city replenishment will cease until the next round of spending -- should that occur.

To receive monies from the city hospital maintenance account, MRMC will be required to issue a request form to the city containing a description of the repair and a cost, or estimated cost, and submit all invoices and receipts from the repair, according to the lease.

When Magnolia Regional Medical Center was under city ownership, it previously had unlimited access to the hospital maintenance tax fund. Magnolia Mayor Parnell Vann on Monday stated that the old fund was often used to aid the hospital financially, as well as maintain its grounds.

“For 10 years, that money has been used to operate,” he said.

The amendment was approved Monday by ‘yes’ votes from Aldermen Larry Talley, Jeff White, Steve Crowell, Kelli Souter, and Steve Nipper. The only ‘no’ vote was cast by Alderman Tia Wesson. Councilmen Jamie Waller and James Jefferson were not present for the vote.

The approval vote came after Magnolia Mayor Parnell Vann expressed wishes to hold off the vote until after MRMC addressed a current drainage problem at the hospital, which could potentially deplete or significantly lower the $250,000 in maintenance tax funds.

“It appears that the Nabholz Group (that built the current hospital in 2010) did not dig up the old french drain-water drain system and left the 1939 system in the ground,” he said. “It has come loose.”

The vote to approve the amendment, however, proceeded with a 5-1 passage, which will allow the hospital to access the maintenance funds for its current property issue, and potentially avoid incurring a large expense from its operational bottom line.

There was a request Monday by Wesson to amend the language in the lease amendment motion to exclude the current drainage issue, but the original motion to pass the lease was moved forward with, voted upon, and passed.

According to Nipper, the MRMC Board of Directors on Monday also approved the lease amendment. The language in the contract was also reviewed and approved by attorneys at Friday, Eldridge and Clark LLP, according to Boyd. The Little Rock-based firm has offered legal advice to the city since MRMC’s nonprofit transition began nearly two years ago.


In other city news:

- The Magnolia Blossom Festival did “very well” this year, according to Magnolia Economic Development Director Ellie Baker. The city official stated Monday that the local chamber of commerce appreciated the city’s input, as well as its help in cleaning up the streets immediately following the conclusion of the event last week. In addition to the work performed through the night by the Magnolia Street Department, the Magnolia Police Department and Magnolia Fire Department also pitched in, according to Baker.

“If you went to church the next morning, you really didn’t see anything left out,” she said.

- The newest version of Magnolia Living, the city’s local travel and information guide, is now available, according to Baker. They can be picked up at the Magnolia-Columbia County Chamber of Commerce offices along West Main Street, as well as various locally-owned businesses. The Chamber is also working on a new city seal and logo to help better market the town, according to Baker.


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