Council receives second set of financial recommendations

Two groups, one consisting of city employees and another of a cross-section of residents, have set out to find solutions to the city's revenue problems.

The two groups have come up with different solutions to help the city make ends meet after sales tax revenue has not come in as expected. Now it will be up to the city council to sift through the recommendations and decide what type of tax increase they think will best meet the city's needs but won't be shunned by voters. Whatever that proposal might be, most council members said Tuesday they were against putting it on the November ballot.

The council heard the citizen finance task force recommendation Tuesday night at a joint round-table meeting.

Five taxes and fees

Unlike the city employees' recommendation of a three-quarter-cent sales tax increase, the Citizens Finance Task Force organized the priorities and recommended a phased approach that would raise or create five taxes or fee increases and take care of what it considered the city's most urgent needs first. In a few years, the city would then ask for another revenue increase to take care of some other projects.

"To be honest, I don't know if I want to endorse any proposal," said councilman Jay Purcell. "They both need to be looked at. My main concern is I don't want to raise taxes where it will drive sales to other communities."

Phase 1 includes a quarter-cent sales tax increase, a 20-cent cigarette tax increase, a stormwater utility fee increase, a use tax (a local sales tax on goods purchased by mail order out of the city) and a 5-cent extension on a property tax that will sunset in 2004.

The taxes and fee increases are expected to generate $3.9 million per year to help pay for a prioritized list of projects.

Among the projects to be paid for in Phase 1: Operation/equipment replacement, the replacement of fire station No. 3, the construction of a family aquatic center to replace Capaha Pool, a police station addition/renovation and a list of stormwater projects.

One item that was discussed at length both Tuesday night and at the task force meetings was the family aquatic center. Some task force members were worried some residents wouldn't perceive that as a need of the community. It was argued that aquatic centers in other communities are self-supporting and that such a park would bring more revenue to the city. Besides, members were concerned the filtering structure at Capaha Pool could soon break down beyond repair.

"Look at what our local church and youth groups are doing," said Don Fisher, a member of the task force. "They load up in a bus or vans and they're going to Six Flags or to the Farmington water park."

Phases vs. one shot

One glaring difference between the task force's proposal and the recommendation of the city employee revenue team was the idea of a phased approach.

The revenue team's recommendation would generate about $6 million per year, but it would virtually take care of all the city's revenue needs in one shot.

A phased approach, task force members said, would allow for a more reasonable tax-increase request.

Some council members discussed at earlier meetings how they would rather not have to ask voters for an additional tax, but no one disputed the idea of phases Tuesday night.

"It would be similar in my mind to the transportation trust fund," said councilman Matt Hopkins. "I think we got the trust of the community when we did those projects we said we were going to do and then extended them."

Mayor Jay Knudtson said he had reservations about the revenue team's recommendation of a three-quarter-cent sales tax increase.

The task force "came up with a scaled-down version," Knudtson said. "And it's pretty responsible that they identified what could be palatable to the citizens. I think some things look good on paper, but as a council we're going to dig a little deeper."

bmiller@semissourian.com

335-6611, extension 127Projects for Phase 1 Annual cost

Operations/equipment $2,400,000

Replace fire station No. 3 $155,000

Police addition/renovation $425,000

Stormwater projects $380,000

Family Aquatic Center (to replace Capaha Pool) $395,000Total$3,755,000

Recommended revenue package Annual revenue

Quarter-cent sales tax $1.900,000

20-cent cigarette tax increase $920,000

Stormwater utility fee $500,000

Use tax $350,000

5-cent extension of Show Me Center property tax $200,000Total$3,870,000

SOURCE: Citizens Finance Task Force