McMinnville officials are considering tying the cost of future projects to the money recovered from a negotiation with the county over local options sales tax.
“I would like to see this board adopt a policy that says we are going to use the sales tax recovery money to upgrade the facilities the city has, and to upgrade the equipment the city has because this is the citizens’ money,” said Alderman Ken Smith. “The money needs to go back into items so they can see there are improvements being made to offer a better quality of life.”
In 2009, city officials entered into a lawsuit with county officials over sales tax given to the county by the city in 1969 when schools were consolidation. The long-standing agreement gave 75 percent of the city’s sales tax to the county, which currently amounts to $2 million annually.
The lawsuit ended in 2011 when both governments voted to enter into a new 25-year agreement that allows the city to regain 4 percent of its sales tax each year. Compounded annually, the city would regain 100 percent by the end of the contract.
Based on projections, the agreement will return roughly $80,000 to the city in the first year, $160,000 the second year, $240,000 the third year, etc. However, as sales tax revenue varies, so will the amount returned.
Over 25 years, the city expects to see a return of $26 million. Smith says he would like to see the city move forward with almost $10 million in projects with debt service paid by the 4 percent recovery schedule.
“I know $10 million is a tremendous amount of money,” Smith said. “We are very fortunate. City administrator David Rutherford has done a tremendous job working with lawyers and whomever else to recover the city’s local option sales tax. We can do these projects without a tax increase.”
By departments, the projects will include:
• Public Works — Land purchase of six acres $80,000; maintenance building constructed $600,000.
• Street Aid — Backhoe $110,000; paving parking lots $300,000; sidewalk improvement $260,000.
• Sanitation — Building for vehicles $80,000; side loader garbage truck $250,000.
• Wastewater — Roof repair $75,000; main control panel replacement $250,000; improvement of lines $300,000.
• Police — Technology equipment $100,000; new station $1.1 million.
• Fire — New engine for station one $300,000; new equipment truck $200,000; new engine for station two $550,000; extrication equipment $40,000; new fire station $1 million.
• Parks and Recreation — New ball lights $150,000; Civic Center renovation $1 million; fluid coolers for geothermal system $83,000; general upgrades $180,000; Pepper Branch Park development $300,000; pool resurfacing $375,000; Riverfront Park improvements $120,000.
Park Theatre renovation of $2 million was also included on the list of renovations, bringing the grand total of future renovations to $9.8 million.
Smith says the city should cash in now on low interest rates.
“I can only hope that in the next 25 years, we get $26 million,” said Smith. “However, now would be a golden time to fund some projects while we have a source of income for the next 25 years and we have the lowest interest rates that we have had in our lifetimes.”
Smith says he was shocked to see the ages of the fire engines in the fire department.
“Currently, the fire department has in front line service Engine Seven that is 23 years old and Engine Eight that is 20 years old. In reserve, Engine Five that is 40 years old and Engine Six that is 34 years old. I’ve got a son that’s older than three of these,” said Smith.
The plan to attach the sales tax recovery to future projects is under consideration by Finance Committee members and must be sent to the full board for its consideration prior to implementation.