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July 7, 2013

Lawton Marketplace could lure customers away from Duncan

City projects on hold pending outcome of sales tax revenue

DUNCAN — Several capital projects in Duncan are on hold at the midpoint of the 2013 city budget, some waiting on grants and others delayed because a new Target store in Lawton and other retail outlets there could siphon sales tax collections here.

The projects in limbo – well into the summer season — include a splash pad at Douglass Park, campsite upgrades at Duncan lakes and improvements at city parks, including a parking lot expansion at Abe Raizen Park used heavily now for youth baseball and softball.

 City Finance Director Patti Clift plans to meet with department heads July 23 to review revenues and spending so far this year and assess the city’s fiscal picture heading into the last months of the 2013 budget. The $61 million budget expires Dec. 31.

Sales tax collections so far this year have come in just above expectations, Clift said. The city projected that Duncan would take in more than $13 million in sales taxes this year.

The city relies on sales taxes and income from its electric and water utilities to fund a major portion of the services and amenities it provides. Water revenues could dip because of restrictions imposed on outdoor water use due to the drought.

All of that will be examined in the upcoming meeting.

“At that point we can make decisions and tell the department heads whether they can go forward with capital improvement projects,” said City Manager Jim Frieda.

Some major expenditures and parts of the budget, including pay raises for city employees, have moved forward. And some money has been spent for capital improvements, including vehicle and equipment upgrades for the police and fire departments.

Frieda said the city’s finances have improved in the past few years. Total cash on hand and investments as of June 30 topped $26 million, more than $9 million more than at the same point in June 2010, according to city figures.

The city’s debt — about $53 million as of June 30 — has been reduced by more than $6.8 million over the past three years, he said.

But the city is still spending about $5 million a year paying down debt, and Frieda says he wants to have enough available cash to cover a year’s worth of debt service in case of an unforeseen financial emergency.

And he said the city must be wary of sales taxes in Duncan, at least temporarily, being siphoned away by the Target and other new retail stores planned in Lawton. After several years of delays, the 350,000 square-foot Lawton Marketplace is moving forward.

 Other new stores planned for Lawton include Academy Sports & Outdoors, TJ Maxx, Famous Footwear, Dress Barn, Lane Bryant and PetSmart.

Those are sure to draw customers — and some of their sales tax dollars — from Duncan.

Frieda said he has discussed the potential hit on sales taxes here with the Duncan Chamber of Commerce and Industry, but a dollar estimate on the possible loss has not been made.

“I think there is a natural tendency to have at least a curiosity draw where people are willing to drive to Lawton and shop just to satisfy their curiosity,” Frieda said.

“Once you draw a person into another community and shop you have to anticipate that, having a meal there and just a number of things.”

Here is the status of some capital projects that were slated for spending in the budget:

n Douglass Splash: $90,000 in city funds to be combined with $90,000 in state grant funds. Project on hold because grant money still pending.

n Abe Raizen Park: $150,000 to do third phase of parking expansion. On hold pending upcoming budget review. Some other improvements in parks on hold pending budget review.

n Campsite improvements at Duncan lakes: $70,000 to upgrade electrical outlets at campsites. Much of it on hold pending budget review.

n  Heritage Trails Project: $160,000 in grant money, with a $32,000 match from city, to start building a walking trail through part of Duncan. Several entities are involved in the project and progress in moving forward has been slow.

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