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Sund: County didn't plan to get Ellis, Victoria shares of tax

5/9/2013

By RANDY GONZALES

By RANDY GONZALES

rgonzales@dailynews.net

Ellis' decision to join Schoenchen and keep its share of potential revenue from a county sales tax did not catch county officials off guard.

In Wednesday night's public forum at the Veterans of Foreign Wars Hall, Ellis County Administrator Greg Sund outlined the county's approach toward financing the proposed project.

The city of Hays has agreed to give all of its share of revenue from the proposed 0.5-percent county sales tax. Hays' share, along with the county's, would amount to approximately 90 percent of revenue generated.

Schoenchen voted last month to keep its share, and Ellis city leaders did the same in Monday's meeting. Victoria will wait until after the Tuesday special election to decide what to do with its share, if the ballot question is approved by the voters.

"In our projections, we were planning not to get that money," Sund told the handful of members of the public in attendance Wednesday. "We thought it was far better to try to assume we wouldn't get it, because we were getting some feelers that they may be holding it back early on."

With that in mind, the county lowered projected revenues each year from the tax.

"The state estimates that we can take in about $3.7 million on the sales tax (each year)," Sund said. "We conservatively got that at $3.5 (million). When you remove the 10 percent the outlying cities could hold, we're down to $3.1 (million). At $3.1 (million), we still think we can pay off this building in four to four-and-a-half years."

The sales tax would go toward construction of an EMS/rural fire building ($3.8 million) as well as expansion and renovation to the county jail, Law Enforcement Center and courthouse ($8.5 million). An added $2 million in interest costs brings the total to approximately $14.3 million.

The tax would sunset in five years or when the project is paid off, whichever comes sooner.

Sund said now is the time to finance the project, while interest rates remain low.

"It's a big timing issue," he said.

Sund said the net interest rate for the bonds could be as low as 1.3 percent.

"If we did that kind of interest rate, we can more easily pay off the thing in four years," he said. "If we don't get this financing done fairly quickly, interest rates are going to want to climb in the near future.

"It's very key that we try to finance this thing as soon as possible."

Ellis County Commission Chairman Dean Haselhorst wasn't discouraged by Ellis' decision to keep its share of potential tax revenue.

"Doesn't surprise me at all," he said. "I know they have projects that need funded, just like Schoenchen does, just like Victoria does.

"I feel if that's their decision, I'm very good with their decision. I hope they go out to vote to support the sales tax. Without the sales tax passing, the outlying communities won't get the money that they're looking for."

Perhaps the severe weather kept the crowd down at Wednesday's meeting, which was cut short due to thunderstorms approaching Hays. There was another possibility, Haselhorst said.

"I think maybe a lot of people have made their decision already," he said.

The final of six public forums is scheduled for 7 p.m. today at the American Legion, 13th and Canterbury.

"People have had the chance," Haselhorst said. "If they don't come (tonight), they can't say they weren't given the opportunity.

"I just hope they show up next Tuesday in favor of our sales tax."