Hays City Commissioners for now want to sock away an expected $700,000 annual sales tax windfall the city will start to get in 2021.
The commissioners at their regular work session last Thursday evening looked at a long wish list of city projects.
Those ranged from expanding multi-use recreational paths to park amenities to street improvements.
No one mentioned giving any money to Ellis County.
Ellis County Commissioners in early May formally asked Hays to pitch in $750,000 of its sales tax proceeds over the next two years toward the county’s planned $10.8 million Northwest Business Corridor project. The 55-mph bypass around Hays for north-south US-183 highway is key to a planned $40 million private travel and shopping plaza development off Interstate 70.
But the city commissioners Thursday at City Hall said individually they don’t want to commit the tax proceeds, which will arrive monthly over the next 10 years.
"I’m concerned with this COVID thing, and how much this is going to affect the city of Hays," said Commissioner Ron Mellick. "That’s probably where we’re going to need this money, to make up for lost revenue. Hopefully that would help cover it. I would not want to see us designate that money more than one year at a time each year. Let the commission look at it, because over this 10-year period our needs could quickly change."
Shoppers in Ellis County start paying the new quarter-cent countywide general sales tax on Oct. 1. It will be in place for 10 years.
The county and its towns each get their share of the tax starting this winter when the state’s monthly distributions arrive.
With the city’s budget highly dependent on existing sales tax proceeds, the commission is anxiously awaiting news of sales tax revenue from the past few months of pandemic when hotels, restaurants and shops were closed. Reporting and distribution of sales tax proceeds, which is handled by the state, lags a couple months.
City estimates $700,000 a year
In a conservative estimate, city finance director Kim Rupp said the city expects to get $700,000 annually from its share of the new countywide tax.
That’s $7.7 million over 10 years, according to Rupp, taking into account a 2% inflator.
"That’s my biggest concern, is waiting to see what that number really is going to be," said City Commissioner Sandy Jacobs. "We still don’t know what our numbers for April were, and I think that’s going to tell us a lot."
Mellick said he didn’t want to spend any of the money before the city actually has it in hand.
The city now is working on its budget for 2021.
City Manager Toby Dougherty presented the commission with what he called a short list of projects for the money.
Some of those include: expansion of the city’s multi-use path system; turf for the ball fields at the city’s sports complex; the Arc Park accessible to special needs kids; upgrades to Hays Aquatic Park; adding a third fire station; stabilizing the pandemic budget to avoid layoffs or service reductions; savings in the bank; and the city’s Top 5 street projects.
Last on the list was $750,000 for the county’s Northwest Business Corridor.
"We have 120-some miles of streets," Dougherty said. "Just do the math. A street doesn’t last forever and it costs a lot of money per mile to rebuild."
The commissioners can keep a running balance in the City Commission Capital Reserve fund that they don’t touch, Dougherty said. The excess could go to pay cash for street projects as they arise.
Plenty of street projects
Right now the city is saving money for two big projects: reconstruction of 27th Street between Fort and Hall streets; and reconstruction of south Vine Street from south of 13th Street to the U.S. 183 Bypass.
"We have the money to pay for 27th Street, we don’t have all the money saved up we need to pay for the south Vine street," Dougherty said. "I think by the time we get to the point we have to pay the bills on that we should have the money saved up but it may be close. If the commission were to stick some money aside, in that fund, and say ‘this is untouchable until we decide what to do with it,’ then we understand that as we’re lining up the next street project that there’s a certain balance we just don’t go below."
Mayor Sean Musil also favored waiting to decide.
"I think it would be foolish of us to commit now knowing what’s actually going to be coming in," Musil said, "with what’s going on in our country right now."
Commissioners ask for project estimates
He spoke in favor of all-weather turf at the sports complex, better shade structures, and the ARC park.
"I think if we have the money, I’d like to see some of these quality of life things done sooner or later," he said.
Jacobs asked for preliminary numbers on the quality-of-life amenities the staff proposed.
City Commissioner Michael Berges agreed.
"It’ll make the decisions easier when we see actual real numbers," Berges said, commenting later of the quality-of-life projects, "Any and all of these, I could get behind."
Jacobs said the city commissioners will have to be level-headed about spending the money.
"I consider that windfall dollars, and when I look at windfall, I look at opportunities," she said.
"If something came up that was important that we had the opportunity to use those funds for," Jacobs asked Dougherty, "we could do that?"
"Yes," Dougherty said.
Musil commented that the city budget is in good shape because of how the city pays its bills and puts money in the bank.
"We don’t spend money before we get it," Mellick said.
"Exactly," Musil said.
"That’s the key thing right there," Mellick added.