Building the Future
A one-time, non-renewable, nine-month only, one penny sales tax.
Special election to be on March 12, 2019
The United States Marshals Museum Foundation will pay for the city’s cost of the special election.
Tax levied beginning July 1, 2019
Tax expires permanently March 31, 2020
Approximately $15-$16 million in tax revenues to be used to finish the remainder of the USMM project.
The City of Fort Smith government will have no control over how these tax dollars are spent. We presently have five levels of review and accountability: Finance Officer, Part-Time CFO, Board of Directors, regular audit, and submissions to media/public.
A Public Facilities Board comprised of community residents will own the USMM building and grounds, outside of the control of the City of Fort Smith Government.
The United States Marshals Museum is a once-in-a-lifetime chance for Fort Smith to Bring Home a Museum that combines our past with our future, educates our national citizenry of the importance of the Constitution, the Rule of Law and Law Enforcement, and will spur downtown and riverfront development.
Vote YES and Make Your Voice Heard on March 12!
Background & Documentation Presented to Fort Smith Board of Directors
Frequently Asked Questions
Property & Site
The site is next to the river and will flood. Why did you select such a site?
The Marshals Museum property is not located within the 500-year floodplain and will be positioned higher than the 100-year floodplain mark.
Who will own the Museum and the property it sits on?
The Museum building and grounds will be owned by a Public Facilities Board (PFB).
Are you using local contractors to build the building?
Our preference is to always work with local vendors and contractors when possible. 38 local contractors (those located within 30 minutes of the site) were invited or requested to provide information to the general contractor regarding capabilities, capacity, and pricing. 12 chose to decline the opportunity. A total of $6.4 million, or 40% of the overall work was awarded to local contractors. Many contractors were on jobs elsewhere and could not bid.
Why did you begin construction of the Museum before you had all the money necessary to complete the project?
We raised enough money to not only construct the Museum building but to pay many other expenses. The donors gave money to build the Museum. We believed it prudent, with escalating building and materials cost, to begin construction. The passage of a sales tax will allow certainty in the completion timetable, will enable us to lock in rising costs, and to begin attracting thousands of visitors to Fort Smith sooner rather than later.
Post Construction & Operations
How are you going to sustain the Museum? Will you be coming back and asking for more taxpayer money?
The business model for the Museum is to raise money through earned revenue, such as admission, gift shop, food and beverage, etc. and through contributed revenue. The contributed revenue of approximately $600,000 per year will be raised locally, regionally, and nationally, and from memberships, events, sponsorships, corporate and individual gifts, and more. The sales tax is intended to finalize the construction timeline and get the full Museum project opened and operating. It is not the intention of the USMM Board of Directors or Foundation Board to approach the city again in the future for additional tax dollars.
What are the salaries of your staff? Why should the taxpayer subsidize salaries and other operating expenses?
Salaries of the staff are at or below regional and national levels. These will be shared privately upon request.
City of Fort Smith & Public Facilities Board
Does the City pay the employees of the Museum?
No, the City does not pay the Museum’s employees.
I don’t trust City government, so why should I support a tax for the Museum?
An independent PFB will own the facility and grounds. The USMM, not the City, will manage the Museum.
The Arkansas Constitution and laws enacted by the Arkansas Legislature require that public funds (proceeds from a Gross Receipts or Sales Tax) be expended for public purposes. In this case, Fort Smith’s Board of Directors will establish an independent PFB, governed by five citizens, who will use Sales Tax receipts from the temporary penny sales tax to purchase the Museum’s building and grounds.
The PFB will lease the building and grounds to the USMM, who will be solely responsible for the operation of the museum, including all operational expenses. The purchase price paid by the PFB will be less than the cost of construction. The proceeds from the sale to the PFB will be used by the USMM to finish out the experience/exhibit costs and other expenses of startup. The USMM will provide multiple and substantial public benefits and will be accountable to the PFB for the performance of those activities benefitting the public.
If the City won’t be managing the Museum, then who will?
The Museum is governed by up to 22 members of the Board of Directors (currently 20), 12 of whom are residents and taxpayers of the area and three who are representatives of the U.S. Marshals Service. The remainder are from elsewhere in the country.
Financial Information & Accountability
How much have you spent since you began and what has it been spent for?
As of October 31, 2018, the Museum and Foundation have spent a total of $14,151,321. The majority of this has been in construction-related costs, architectural design & engineering, experience design and asset purchases. $6,069,792 of the total was spent on educational programming, artifact management, administration, marketing, and fundraising. We expect to spend an additional $1.4 million by the end of calendar year 2019 plus additional start-up costs including staffing up, the Hall of Honor and building dedication, and regional/national marketing efforts.
Are the Museum’s finances public?
All financial information concerning the Museum has been public since our beginning. Our financial reports are made available to the public at our quarterly board meetings and are reported on by the media. We will continue to furnish our financial data to the public and always seek to honor any requests for financial information.
In addition, the law requires disclosure of expenses of tax-exempt organizations such as the Museum and the Foundation. Those documents (called 990’s) are available online.
There should be a full accounting for all the money you have spent so far. The best indication of whether you can manage millions of dollars in tax money is how you have managed the millions spent so far.
All expenses incurred by the Museum are reviewed and audited by Landmark, formerly known as Beall Barclay, a third-party CPA firm who specializes in ensuring the appropriate handling of money and fiscal responsibility. Day-to-day operations oversite includes a senior management team with years of experience in managing projects like this to ensure that correct and ethical decisions are made every day. The financial team consists of a financial manager and part-time CFO to ensure the accountability of the details.
Explain specifically how you plan to spend the tax money.
The USMM building currently under construction, including the USMM campus and Hall of Honor, has been funded through cash and pledges receivable. The revenue from the requested sunset tax will be used to fund the production of the museum experience (exhibits), FFE (Fixtures, Furniture & Equipment), start-up costs, working capital/cash reserves, and remaining contingency.
Has the U.S. Marshals Museum benefitted from any tax credits, such as New Market Tax Credits?
Why haven’t you signed up a celebrity to endorse the project and help raise funds?
Throughout our fundraising efforts, we have made, and continue to make, extensive efforts to enlist a celebrity to assist in publicizing the Museum.
Does education and programming make up a large part of your expenses?
Yes. Expenses represent a large part of our undertakings. For example, our two major lectures, Supreme Court Justice Scalia and U.S. Congressman Trey Gowdy, attracted nearly 2,800 people, including 1,100 students, and the public was available to attend at no charge. Programming like this will continue to be an important part of what the Museum has to offer.
In addition, the Museum has also actively distributed a series of educator resource support guides to teachers and others in multiple states, reaching students nationally. The subjects in these guides have been related to civic literacy, history, law enforcement, and the Rule of Law.
What has the federal government done to help pay for the Museum?
The federal government’s help has been substantial and appreciated. The United State Marshals Service (USMS) has loaned the Museum most of its collection of artifacts and objects. Among them are a Charles Wilson Peale miniature portrait of Robert Forsythe, the first U.S. Marshal killed in the line of duty in 1794. It has also supplied the Museum hundreds of other items that will be used to tell the USMS history.
Also, thanks to the support of our area congressional representatives and their bipartisanship, the United States Mint sold U.S. Marshals commemorative coins nationwide that resulted in a $3.1 million payment to the Museum, none of it taxpayer money.
Have you talked to every possible prospect and asked for money? Have you missed some and could they have made this possible?
There are likely to be prospects that we have missed. We have reached out to hundreds of people in this community, northwest Arkansas, central Arkansas, and throughout the state. We have also contacted many prospective individual and corporate donors nationally as well and spent a considerable amount of time cultivating relationships with potential donors in the fundraising process. The geographical breakdown of money raised and property donated is available on our website.
Will you have to keep raising money in the future?
Fundraising for a Museum of any type is ongoing and crucial to its continued operation. The business model for a Museum without a substantial endowment is to fund operations with both earned and contributed revenue. The Museum’s Foundation intends to raise money for an endowment, which then can be used to supplement the operational budget and help defray future capital needs of the Museum.
Why has fundraising not been more successful out of Fort Smith?
Individuals and businesses in the area have been very generous. But a large majority of money raised has been major gifts of $100,000 and above. Of the total $35.5 million raised to date, including real estate, approximately 46% has come from outside of Fort Smith and 54% from in and around Fort Smith. Most of which is thanks to the vision of philanthropic individuals and organizations in this area who whole-heartedly believe in what the Museum will mean for Fort Smith through its educational programming and economic impact.
We are still asked by community residents how they can help even though they might not be in a position to donate on a large scale. When citizens, and visitors to the Fort Smith, choose to buy and support local businesses like restaurants, hotels and shops, they will be adding their support to this important project.
Fundraising has been successful outside of Fort Smith. The reality however, is that fundraising outside of the region is more difficult. People who aren’t from the area often struggle to understand or grasp the importance of the Museum enough to support capital projects here.
I’ve noticed some media stories lately with comments stating that there are outstanding asks still possible from local donors. Why ask for the tax until those requests are finalized and added?
Even with outstanding fundraising asks, it is uncertain how many of those will be successful. If the USMMF is fortunate enough to receive gifts in excess of public support, those funds will be invested in an endowment to help provide for the long-term financial stability of the USMM.
The Sales Tax
You say the tax is for nine months only. How do I know that the tax won’t be extended?
The Ordinance governing the election requires that the tax be imposed for nine months and nine months only. The amount derived from a short-lived sales tax will be sufficient to complete the Museum’s capital needs. The Museum will not ask for an extension of the tax.
A sales tax often hurts people who have lower or fixed incomes. How do you justify taking money out of the pockets of those with lower incomes?
To keep the finances in perspective, the sales tax will only represent $1 additional for every $100 that you spend for nine months. The Museum’s Foundation has raised 70% of the amount needed to complete the project and waited as long as possible to ask for this support, plus limiting the time to nine months during which the penny will be collected. The Museum will be beneficial to the entire community.
The tax, if passed, will essentially complete the capital needs of the Museum. What will be done with money raised after passage of the tax in excess of the capital campaign needs?
If this were to happen, the revenue is likely to be placed in an endowment to provide for future financial stability.
Will you consider asking for a tax or public support ever again?
It is the intent of the current Museum leadership to not ask for tax support again and we will not ask for any type of renewal of the proposed special short-term tax if it is approved by the citizens. Our intent is to be set up to self-fund the operations of the Museum. It’s also a certainty that we will have future capital needs and will plan to raise money privately to meet those future needs. But no organization can accurately foresee all future circumstances.
How much of the tax will be paid by Fort Smith residents v. non-Fort Smith residents?
Fort Smith is unique in that many people come into the city each day from a very large geographic area to work and visit. It’s expected that nearly 50% of the sales tax total will come from non-Fort Smith residents with the other 50% coming from Fort Smith citizens.
The Riverfront & Downtown
One argument is that the Riverfront should be developed privately and not by taxpayers.
Most of the cost of the project (70%) has been raised without the imposition of new taxes. Public-private partnerships are successful and often necessary to fund projects of this magnitude. The expectation is that the Museum will be a catalyst to the Riverfront and encourage developers to focus on opportunities in downtown Fort Smith. The Museum project alone is estimated to be more than a $100 million economic development impact to the city over the first five years.
For years, surveys and studies have shown that the people of Fort Smith value its history and desperately want the downtown and riverfront to be vital economic engines that will be an asset to the greater Fort Smith region.
Downtown property owners and businesses have already embraced the Museum project and contributed over $6 million in cash, pledges, and property and are fully behind the full completion of the Museum. The total economic benefit will flow to a great number of people and businesses as we see visitors and tourists from all over the country and the world come to see the Museum.
The entire riverfront should be developed as soon as possible. Why I should support a project that is only a small part of riverfront development?
The Museum, with many thousands of tourists coming each year from out of state, will be a catalyst to developing the remaining property along the river. Already, we have a multi-use trail and skate park on the river and the Community School for the Arts will be adjacent to the Museum. With the Museum completion, the riverfront becomes much more attractive to developers. National studies, such as the Gateway Planning downtown Fort Smith plan, have shown that cultural institutions built along a waterfront typically lead to private investment that benefits the entire community.
Will the Museum help all of downtown? How?
Gateway Planning, the nationally recognized planning group responsible for the recent downtown plan, has indicated that the Marshals Museum will be the anchor for a full renaissance of downtown Fort Smith, one of the great storied places of America.
Studies indicate that approximately 119,000-151,000 is estimated for yearly Museum attendance according to a study by ConsultEcon in 2014. These visitors will shop, eat out, buy gas, stay in our hotels, and more. According to Leisure Development Partners (LDP), the possible primary market is close to 380,000 in 2018. Based off of their data, by 2028 that market will rise to just over 2.4 million. The economic impact is estimated to be about $1.4 and $3.4 million per year according to a study prepared by the City of Fort Smith and much of this will benefit downtown merchants and property owners.
“Both the State of Arkansas and Fort Smith have a growing tourism economy. The Clinton Presidential Center and Crystal Bridges have both helped to brand central and northwest Arkansas as destinations and have served to induce new visits to Central and Northwestern Arkansas. The U.S. Marshals Museum is viewed as a third signature attraction in Arkansas that through collaboration and cross promotion, stands to benefit from the success of Crystal Bridges and the Clinton Presidential Center, and could serve to further bolster tourism in the Northwestern portion of the State.” – U.S. Marshals Museum, Inc. ConsultEcon Study (2014)
Why should younger people in Fort Smith support the tax? This Museum is about history and law enforcement which really isn’t attractive or our interest.
The Museum and its campus will have gathering space overlooking the river for the citizens and visitors to use. Its public space inside the Museum is also available for use. The Museum will also tie into the Greg Smith River Trail, an anchor piece of the overall trails and bikeways plan for Fort Smith.
The Museum’s presence on the riverfront will add to the community’s quality of place and be the first large development on the river. It should also spur additional development and amenities for young people who have recently moved to the city or have already chosen to make Fort Smith their home.
What is the difference between the U.S. Marshals Museum, Inc., and the U.S. Marshals Museum Foundation, Inc.
The Museum and the Foundation are both Arkansas non-profit corporations. Both have 501(c)(3) tax-exempt recognition from the Internal Revenue Service. The role of the Foundation is to raise money to build the Museum and National Learning Center and to support its annual budget once it is open and running.
The Museum has planned the construction of the Museum and the National Learning Center. It will be responsible for operating the Museum, managing the operating budget, overseeing educational programming, and ensure that the Museum is operating within its means.
Both the Museum and Foundation Boards of Directors are comprised of private citizens and not by appointment by the City of Fort Smith. Both Boards have a majority of residents from Fort Smith and surrounding areas.