latte City residents will be asked to approve two separate questions on the April 5 ballot, after a unanimous vote by the board of aldermen on Tuesday night.
A 3/8 cent transportation sales tax question will go before voters in the spring election. The tax, which will need a simple majority for passage, will be used for the purpose of maintaining and improving streets and related street infrastructure.
If the sales tax is passed, it will begin being collected in January of 2006.
According to City Administrator Keith Moody, the city had the authority by state statutes to ask for up to 1/2 cent tax for transportation issues.
The original question to the board was asking for only a 1/4 cent transportation sales tax. With a recommendation by Moody that the board could ask for 3/8 cent and avoid any property tax levy on the ballot, the board voted to approve the 3/8 cent question.
“It’s a more powerful revenue source for us and a more powerful revenue growth for us,” Moody told the board after their vote to approve the 3/8 cent sales tax question.
Alderman Ron Porter said he hated to see a sales tax be put on the ballot, but voted with his colleagues to put it in front of the people.
“Well, we’re going to let the voters decide on it. I don’t know how much more you can do but that?” said Mayor Dave Brooks.
Alderman Billy Knighton agreed. “Everybody hates taxes but you have to do what you have to do to survive.”
Moody told the board it was a tough decision to determine which item they should address first.
“I didn’t know which of these issues to put on the agenda first,” said Moody. “They’re hand in hand, but they have to be decided on separately.”
The second question the board authorized was for the placement of $4 million in general obligation bonds on the ballot to give the city the authority to issue bonds. A 4/7 majority will be required to pass the second bond question.
The placement of the question on the ballot doesn’t provide a revenue source for the repayment of these bonds, unless the sales tax is passed by a simple majority.
If the sales tax question is passed, the city will be able to utilize those funds to repay the principal and interest on the debt of the bonds. According to Moody if one of the questions passes and other doesn’t, it will create an interesting scenario for each question.
“If the sales tax passes and the other doesn’t, then those revenues will still be spent on transportation related issues but the improvements could only be done every three years because you’ll only be able to collect the revenue monthly,” explained Moody.
“If the general obligation bonds pass and the sales tax doesn’t and the city still decides to use the bonds then we’re still faced with coming up with a revenue source to repay the general obligation bonds.”
Moody told the board that he felt confident that the city would see support from its citizens from his experience over the past nine years.
“We’ve had strong support in issuing bonds in the past with over 2/3 support from our residents,” said Moody.
In his nine years of service, Moody has seen three general obligation bond issues and two revenue bond issues go before the public.
Moody said the city will be readopting a new CIP program in February to present to the citizens before the spring election.
The CIP, which was initially adopted in 1998, is now looking forward to a plan for 2007-2008. Moody said plans being tossed around are issues they’ve already identified two years down the road, as well as projects that currently don’t have funds, like the realignment of Marshall, the Wilson Creek project, and the resurfacing of some streets.