October 25, 2021 Special Commission Meeting Minutes
GOODLAND CITY COMMISSION
Special Commission Meeting
October 25, 2020 5:00 P.M.
Mayor John Garcia called the meeting to order with Vice-Mayor Jay Dee Brumbaugh, Commissioner Aaron Thompson, Commissioner J. J. Howard and Commissioner Gary Farris responding to roll call.
Also present were Dustin Bedore – Director of Electric Utilities, Kenton Keith – Director of Streets and Facilities, Danny Krayca – Director of Parks, Mary Volk – City Clerk, and Kent Brown – City Manager.
Mayor Garcia led Pledge of Allegiance
- Sales Tax Election – Mayor Garcia stated, I would like to welcome Larry Enfield to discuss special question on ballot. Larry stated, to be clear, I am here as a tax payer not a commissioner since other members are not present. Kent stated, there are some questions for the sales tax question on the upcoming election ballot. There have been comments that have confused the first penny tax with second penny tax. The first penny tax started around 1982 and is split among three entities, Goodland, Sherman County and Kanorado. Larry stated, yes it started in 1983 and is split 49% – City of Goodland, 48% – Sherman County and 3% – Kanorado. The first penny is not affected by any part of upcoming bond question. The second penny was first discussed on August 31, 2005 and the County requested City to have tax on ballot because County was unable to without legislation until 2006. City passed Resolution 1249 on September 12, 2005 authorizing and providing for the call of 1% tax for certain street and road improvements in the City and Sherman County. On September 21, 2005 the County came to City questioning length of 20 year bond issue and City rescinded resolution, taking issue off ballot. On February 21, 2006 the County came to City; both agreed to simplify the language with it being a County sales tax proposal and a County Commissioner asking to publish a list of the improvements to help pass question. They also discussed the timing of sales tax to have a full quarter before tax would be implemented July 1, 2006. On February 28, 2006 the County passed Resolution 06-04 with simplified language for question. In County resolution, the “whereas” language states improvement’s to be done in both City and County, but not in the question. Sales tax started July 1, 2006, until payment of all improvements. The inter-local agreement was approved after the election in September and lists the projects and split for City and County for improvements. The inter-local agreement stated 27.77% was City and 72.23% was County, both acknowledging costs could vary from estimates. The agreement is in place until bonds mature in 2025 or are paid in advance of maturity. I understand the County wants to pay off in advance. Larry stated, yes our goal is 2023. Kent stated, the bond was $12,000,000 in improvements with City projects being about $3,450,000 and County projects being $8,220,000. The current ballot proposal on the second penny asks for Sherman County to levy sales tax for county improvements, listing only county projects, with no phrase to allow changes to occur with projects. Ballot proposal commences on expiration of existing tax and I understand expires in twenty years. Larry stated, that is correct, we are not issuing bonds so we will not incur issuance costs. I became commissioner in 2010 and questioned why we were paying 4% interest on first issue, so in 2012 we refinanced the issue with 2% interest so we saved money. Kent stated, the projected annual revenue for question is $1,530,000. If conditions were similar to prior issue, City would get a little over $400,000 leaving $1,100,000 for county projects. The ballot proposal is a continuation, but there is a change in recipients of money. The purpose is the same but recipients have changed. There is no allowance for an inter-local agreement and there was a cooperating effort to get first issue passed. Now it is only a county tax for county projects, which appear to be needed. Mayor Garcia stated, at the last meeting we discussed concerns regarding the lack of communication. Larry stated, none of us were on the commission at time of first issue. We found exact roads we felt needed to be done and drove all of them. City was doing two miles of roads and county had forty miles of road improvements with the bond. We could not understand the difference in the amount City received for improvements and the County received. In speaking with our County engineer, he indicated if we manage the one cent wisely for the next twenty years we may maintain the roads. It is not a division between City and County, but people are out there because of the paved roads that all lead back into Goodland. There are two ways to maintain it, use the one cent or go back to taxpayers asking for another bond issue which will be larger than the bond for the nursing home and the school so I do not think it will pass. Then when the highway is in disrepair what do we do? If we have to tear up the paved roads, we will not survive. We have to maintain those roads, it is part of economic development. There is a lot more than just highway 24 that we maintain. When you have paved streets, people build. Our thinking was the only way we can maintain forty three miles of paved roads is sales tax. We do not want to get a bond issue because it costs more money and you are paying a lot in interest. We are trying to do the best for taxpayers and did not realize you were offended that we proceeded. Mayor Garcia stated, at the time of first issue it was very good communication and relationship between the City and County. There was a lot of development going on back then. My perspective is there is enough debate on both ends where economic development is concerned that each can hold its own. 80% of taxpayers and businesses are in City limits, along with the citizens that votes. If you do not get the support of the City it probably will not pass, which is not where we want to go. It is a proven fact we are at a crossroads because of the economic development we have accomplished. It is also proven that before we can continue to move Goodland forward, the City and County have to work together. The only way to do that is we have to find a balance where it is equitable for both entities. It can be accomplished. I am more focused on what to do to bring it together for both entities. I think we can do that, we just have to bring a resolution together. Larry stated, this conversation has been going for a while. Andrew was your City Manager, did he not report it to you. Mayor Garcia stated, we have said we need to meet monthly to make sure communication continues. Communications broke off after Andrew. Vice-Mayor Brumbaugh stated, we had open meetings with the county about this when Commissioner Fairbanks was on the Commission. Larry stated, communication broke down everywhere last year with COVID. Commissioner Thompson stated, the dialogue I remember in meetings with the City and County regarding sales tax is that it was brought up at the end of the meeting as an item that needs to be discussed in the future. It was never discussed further than that since I have been on the Commission. Larry stated, looking at the inter-local agreement, how did City do two miles of streets and spend $3,500,000. Kent stated, I would say cost for a County mile are less than a City mile because of infrastructure, drainage, curb and gutter. Does that make up difference, I do not know, I have not looked at it that close. Larry stated, I can take you out on the roads, there is nothing additional. Mayor Garcia stated, I am sure we can go back and research the money spent. The agreement was made between the City and County with amount of money to spend. Every year we do a budget and I told the City Manager it is up to the Commission where money is spent. There are always different areas. We used to chip seal City streets every three years now it is many more years. Kenton stated, now it is more than ten years, but it was a different process then. Mayor Garcia stated, the County got Highway 24 in 1970 from the State, why was a project fund not started to build a reserve to resurface it, or even now? Larry stated, when I was Commissioner with Ken Klemm and Steve Evert we budgeted some money but the court house was filled with upset people so we removed from the budget. We thought it was a smart idea but people were mad. Mayor Garcia stated, it is an important piece of economic development. Larry stated, it was both City and County people and they wanted it maintained by sales tax because more people than just those that live in the County use the highway. Mayor Garcia stated, Andrew brought it up to the Commission and we discussed that we needed to find a way before bond expires to see how we were going to move forward. Vice-Mayor Brumbaugh stated, there was some discussion between the City and County when Commissioner Topliff was a member of the County Commission. Do you agree with the information and numbers in the presentation tonight? Larry stated, yes. Vice-Mayor Brumbaugh stated I talked to Larry and I have corrected my comments from last meeting where I was incorrect on the split. What is important, is that it has taken this long to get the right information to the public to decide what they want to do. The concern I have is the revenue shift and the City is not receiving any revenue from this issue. This will be a burden on the City budget going forward. It will be a big burden because 8th Street through the City needs redone. I do not disagree with the County that the roads listed need to be done, especially with all the building that is being done out by the golf course. We held off on 8th Street until after the nursing home vote went through because there would be a lot of truck traffic. Kenton stated a chip seal will not correct 8th Street, it needs to be redone. Vice-Mayor Brumbaugh stated, if we were to sit down together to discuss a proposal when current issue expires it would be nice to finish Cherry Street to Highway 24, then redo Caldwell and 8th Street in concrete to have major streets done in concrete. I mentioned it before; I like sales tax process. It will be expensive and difficult to do with City budget. We need to know with the timing of everything and in planning 2023 budget where the money will be coming from for projects. If issue did get voted down, my interest would be that we come back to the table for the City to add projects, it would help shift budget money to sales tax. People need to know what the alternative is if they are not in favor of question. Is there a proposal we have to proceed, instead of just being against the question? Everyone is in same boat but it works better if we work together. Biggest thing is I feel we are getting correct information out to people. Larry stated, I apologize as we had not seen the split. We looked at the roads and miles and divided it out. That was misleading. Larry asked, the 2% added at Arby’s how far does that tax go? Mary stated, the only businesses affected by that is Arby’s and the hotel. The tax for that CID expires the end of this year. The City has two other CID projects; 24/7 and Holiday Inn Express. Kelly asked, where does the sales tax money go for the CID and who is responsible for the street after tax expires? Mayor Garcia stated, the money goes back to the owner of the property to help recoup costs for the street they put in. The City is responsible for maintaining the street. Larry stated, something to think about is our engineer asked about going to 1.5% but we did not want to raise sales tax. If question does not pass, it is a discussion we may have to have because we have determine how to fund projects. Vice-Mayor Brumbaugh asked, why not lengthen term? Larry stated, why lengthen it when we are not doing a bond; we are just asking for sales tax to do projects. Commissioner Farris stated, sales tax is a lot cheaper without bond. Larry stated, yes because it is going straight to the projects. Last year we had a $2,000,000 project and we could not come up with $1,200,000. Senator Billinger helped us get a $750,000 grant. We are also trying to get bids to chip seal 8th Street but cannot get firm bid with oil prices the way they are, but the project has to be done. Mayor Garcia asked, where did you get projection of $1,530,000 for the question? Over the years one cent has consistently brought in $1,200,000. Larry stated, I am not aware as I agree with you, I feel it is their projection. Commissioner Thompson stated, I have same concerns as Vice-Mayor Brumbaugh. We felt like we were in a gentleman’s agreement in moving forward with sales tax. We reached out a couple times and all of a sudden you moved ahead and had your proposal. That leaves the City to figure out how we are going to cover our costs. We going to raise the mill levy and have your angry tax payers in our meeting. If we add half cent sales tax, we are raising sales tax. The County going after the 1% this election keeps sales tax the same. Regardless what happens, if this passes the City has to figure out what we are going to raise. I felt we should have had conversations to understand what everyone was thinking. I get it you need the money for projects. We are trying to make sure people know what they are voting on and it is not the same 1% as the last twenty years. Larry stated, our intention was not to blind side the City. It came up because our clerk said she needed to know now if we were putting the issue on ballot. She said if it does not pass we have to know what we are going to do. If it passes we have until 2023. Commissioner Thompson stated, I questioned why this year but understand if it does not pass, we have time to figure out what to do. Vice-Mayor Brumbaugh stated, you do not have to have at November election. Larry stated, you can have a special election, but not everyone understands a special election. My opinion, I want it during a general election because everyone will vote. Vice-Mayor Brumbaugh stated, next November is too late for budget purposes. Mayor Garcia stated, for clarification purposes, Vice-Mayor Brumbaugh and Commission Thompson are not in favor of voting on issue. We need to get information out to City and have dialogue with County to come to a point that is equitable for both entities. Commissioner Thompson stated, if this is what the tax payers want to do fine, we just want to make sure they know what they are voting on. If this does not pass I am more than willing to go back to the table to discuss propositions with County. I want people to understand if they vote yes, all money will be going to the County and City projects will not receive any money. Commissioner Howard stated, I agree with Vice-Mayor Brumbaugh and Commissioner Thompson. There was a lack of communication on both entities and with changes in City Manager, issue got dropped. I feel if this is a continuation tax the City should see benefit and get a portion comparable to last issue. Where is the City going to find money to fund 8th Street and it is getting closer to needing fixed? We will have to cut something from budget to fix street. We are both at fault because it is hard to set money aside for the projects this size and for citizens to understand. We should have been included somewhere, it is frustrating we will have talks on this and the City will be crucified for raising taxes. But we have to because streets will continue to get worse. Commissioner Farris stated, the bulk of income from community comes from farmers so roads have to be good. It will affect everyone if they do not have a way to town. We are in same boat, have to have roads in City and County. Larry stated, I believe the real conversation if this does not pass is whether to raise sales tax to 1.25 or 1.5% to make it work. Vice-Mayor Brumbaugh stated, it is important to make sure people have right information. When we grow out by the interstate and have travelers coming through they help subsidize improvements. I do not like any tax, but I like sales tax and feel it is the fairest tax. If we have to raise the sales tax, we need to educate the public on how important it is for improvements. The interstate is important to our community. Larry stated, I feel most people do not understand taxes to begin with. We cannot pick and choose who to tax. Mayor Garcia stated, we want valuations to be up to show productivity but the culprit is the state when they take the majority of the sales tax. Time is of essence as we have one week to disseminate information to citizens as to how we want to move forward. Is there a way to have another meeting with County Commission to explain concerns? The way I am reading the Commission and the word on the street is the city will not vote for the issue if the City does not benefit from a portion of the 1%. If it goes twenty years you are looking at raising $24,000,000. Larry stated, Friday is our next regular meeting. Mayor Garcia stated, that is too late to get information out; I feel we need it tomorrow or Wednesday. Commissioner Thompson asked, what are you trying to accomplish with another meeting? Mayor Garcia stated, Larry is here as a citizen not a commissioner. I want to know where other commissioner’s stand. Larry stated, nothing will change since the question is on the ballot. Mayor Garcia stated, we need to get information out to our citizens. Commissioner Thompson stated, we need to put out the facts on the issue and let people decide how they want to vote. Larry stated, many do not understand when they vote on issues like the school or nursing home that it raises their taxes. We can do anything the taxpayers can afford. Kent stated, the information presented was background information, it is not an action or recommendation because of the agenda. If you have additional direction for staff, let us know. Vice-Mayor Brumbaugh asked, what is best way to get information out? Kent stated, we can use three or four different methods to communicate information to citizens; then they have background information. Those are valid county projects and need to be done, but it is hard to do these projects. I started to talk to staff today about key communication, we will figure that out tomorrow. Mayor Garcia stated, in my opinion I told Kent to be concise and to the point. Whatever means we can, we need to communicate the message to our citizens. Larry stated, I cannot speak for other commissioners, but in no way was our intent to cause a problem. We have open meetings and everyone is welcome. Commissioner Thompson stated, I hope once Kent gets settled that we start having joint meetings again regularly. We have not had any this year and it shows what happens when we communicate and work together.
ADJOURNMENT WAS HAD ON A MOTION Vice-Mayor Brumbaugh seconded by Commissioner Thompson. Motion carried by unanimous VOTE, meeting Adjourned at 6:10 p.m.
ATTEST: John Garcia, Mayor
Mary P. Volk, City Clerk