The Duncan Banner

Local News

June 30, 2013

There are three ways of paying for a major fix

DUNCAN — In the months leading up to a May 14 vote on funding street improvements, the Duncan City Council held several meetings to discuss and devise the plan and it welcomed public input.

But at no meeting, City Manager Jim Frieda recalls, was there ever more than two residents who showed up.

One meeting, held just days before the vote on a $9 million bond issue to fund street fixes, was billed as a forum just to take questions and feedback from citizens. Nobody came.

So when about 20 folks came to a Wednesday night meeting for discussing ways of moving forward on streets – somehow, someway – Frieda and council members were delighted.

“It is gratifying to see there is an interest,” Frieda told the audience.

The city is not exactly back to square one on the issue. There is still a detailed plan for fixing at least 255 segments of streets out of 1,100 city-wide. Months went into prioritizing what streets to fix, what repairs should be done and how much they would cost.

That blueprint is still on the table.

City leaders also have made it clear that they are not giving up on ways to finance a major street fix, even although a proposal to do that through property tax increases was voted down 889-618 last month.

 Frieda says there are three ways of paying for a major fix: another property-tax bond proposal, increasing sales taxes or the city borrowing money on its own and paying it back with existing revenue sources.

The first two options would require voter approval, the third only council approval. But that third option – a revenue bond – seems very unlikely. Frieda and council members did not like that option before and don’t like it now.

It would cut into an already tight revenue stream and add to the city’s debt, they say. The city has reduced its debt by about $6.86 million since December 2010 and city officials like the direction that’s going. The tab is now about $53 million.

“We have worked so hard to get our debt-ratio down,” said Mayor Gene Brown. “Our future depends on our financial situation.”

The city could opt to put another property-tax bond on the ballot to pay for street improvements, although that could not be done again until November.

City officials previously felt that a property-tax bond was the best way to go for several reasons, including lower interest rates. But that route failed in May and some residents still feel it’s not fair to have those who own homes and other real estate foot the bill for streets that everyone uses.

“It’s apparent the people don’t want that even though that would have been the best way to go to get the most bang for the buck,” said Councilman Mike Nelson.

Raising the sales tax in Duncan by a half-cent – taking the rate paid here from 8.7 percent to 9.2 percent – would fund the street project.

Many merchants oppose a sales tax increase, but when people at Wednesday’s meeting were asked which option was better – raising property taxes or sales taxes – almost all favored the latter.

Some people have suggested that the city look to the Duncan Area Economic Development Foundation for help.

Since 1994, the DAEDF has taken in about $25 million from a half-cent sales tax that residents approved and have voted to renew four times. As of December 31, it had nearly $8.7 million cash on hand.

The DAEDF says its primary mission is to attract industry and good-paying jobs to Duncan and support ones that are here. Money through sales taxes has been used as incentives for doing that.

Brown says the DAEDF needs to get on board with the street push in some fashion. He did not say specifically that it should contribute big money, but he does think the organization and its board should get involved.

“In trying to be progressive I think it’s going to take everybody putting forth an effort to get it accomplished and I think the DAEDF should be one of the frontrunners,” he said.

Ben Herrington, chairman of the DAEDF board, said industry and economic development should not be sacrificed for city infrastructure or vice versa.

“I think we need to figure out a way to do both,” he said.

He noted that city voters have overwhelming approved and renewed the half-cent sales tax for economic development, and said DAEDF has done a great job in helping create a good economy in Duncan.

Now is a great time to talk about that and trying to improve streets, he said.

“We are anxious to have that dialogue,” he said.

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