McMinnville officials are discussing how to spend revenue gained from the city’s successful litigation against the county over local option sales tax.
Over the past several weeks, department directors have submitted lists of capital improvements they need now and will need in the future. Under consideration is an estimated $15 million of improvements.
City Finance Committee members reviewed the lists Tuesday night with the intent of beginning an effort to compile a priority list from most important to least important and determining when each project is financially feasible.
City administrator David Rutherford says the $15 million sounds like a lot of money, but some of the projects can be done with strategic planning using the local option sales tax funds recovered from the county to repay the loans.
“Beginning this year, we will be getting get approximately $80,000 a year to help pay for some of these projects,” Rutherford said. “At $80,000 a year, that’s a lot of potential. It will take a few years to build it up.”
The agreement between the city and county returns 4 percent of estimated $2 million sales tax in question over the next 25 years.
The first year will be $80,000. Year two will be $160,000, and year three will be $240,000. During the 25-year phase out, the city will gain approximately $26 million in revenue.
Rutherford says he would suggest they only borrow money on items that have a life expectancy that exceeds the loan repayment.
“You don’t want the repayment of the loan to exceed the life expectancy of the item,” he said. “Anything under $50,000 can be done in the budget without borrowing money.”
McMinnville Parks and Recreation Department improvements are approximately $6.6 million. Among the items are ball field renovation $1.8 to $2.4 million, ball field lighting system upgrades $170,000, renovation of Civic Center $2.6 million, pool resurfacing $375,000, Pepper Branch Park development $330,000, and Riverfront Park renovation $135,000.
“If the decision is made to move forward with Civic Center renovation, we can finance that for 20 years at about 3 percent interest,” Rutherford said. “The debt service will be approximately $166,000 a year. If you look at the recovery schedule, we will be getting back $160,000 a year by the end of fiscal year 2014. The following year we will have an addition $80,000 that can go toward a different project.”
McMinnville Police Department is asking for $1.6 million in improvements, which includes replacement vehicles $360,000, mobile data system upgrade $100,000, and permanent police housing $1.1 million.
McMinnville Fire Department improvements are approximately $1.6 million. Among items on the list are a new fire engine $600,000, new equipment $200,000, quint fire apparatus $550,000, and extrication equipment $40,000.
McMinnville Public Works, which has several divisions under it, is asking for a building to house vehicle maintenance $600,000, $2.9 million for street resurfacing, $300,000 to improve city-owned parking lots, $360,000 to improve sidewalks, and $80,000 to purchase additional land on Belmont Drive, among others.
There is also an additional $5 million in capital improvements asked for by McMinnville Water Department for water and sewer upgrades and McMinnville Public Works for trash and brush pickup. Because those are considered enterprise systems, which means cost of operation is paid for by user fees, they were not included in the $15 million estimate.
The numbers also do not include renovation of the Park Theatre, projected to be $2 million, and renovation of the Blue Building, projected to be $6 million.
“The list does not include the items sent to referendum,” said Rutherford. “If those items pass referendum in November, then we can add them to the list.”
Minimal discussion was held Tuesday night.
Alderman Billy Wood says he would like to see the fire department’s utility truck have the jaws of life on it, to which Vice Mayor Everett Brock agreed.
“That would be nice to have in the city,” Brock said. “I also wasn’t aware that we didn’t have generators at either Station 1 or Station 2. It seems like to me that’s a small expense to make sure we are online all the time.”
No decisions were made Tuesday.
“I don’t expect you to come up with a recommendation tonight,” said Rutherford. “This might have to go through different committees first. I’m presenting it to you because you are the Finance Committee.”
At the meeting were Finance Committee members Brock and Wood. Absent was Alderman Clair Cochran.