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July 7, 2013

Who will pay for the streets?

City, DAEDF at opposing intersections

DUNCAN — City officials and leaders of the Duncan Area Economic Development Foundation say they are ready to talk about ways of moving forward on fixing Duncan’s streets.

But finding common ground on issues of infrastructure and economic development — with possible special elections and millions of dollars in the mix — could be a tricky task.

There are gray areas — and some friction — that might need smoothing over if the city and foundation are to agree on a single path.

“I don’t think we should be forced to choose better roads without continuing economic development and we need to figure out a way to do both, and if that is to sit down then I think we do that,” said Ben Herrington, chairman of the foundation.

The Duncan City Council and City Manager Jim Frieda have made it clear that despite voters rejecting a $9 million property-tax bond for street improvements in May, they intend to find some way of financing a major street fix.

They could seek another property-tax bond or an increase in sales taxes, each option requiring voter approval to become reality. The city could borrow money on its own but city leaders say they don’t intend to do that.

But there is also an option of turning to the DAEDF for help in some fashion, be it financial, campaigning or both.

DAEDF, with four separate nods from city voters, has been getting a half-cent sales tax for economic development efforts since 1994. It has taken in more than $25 million over the years and had more than $8.7 million in cash on hand as of June 30.

DAEDF has spent millions of tax dollars to attract businesses and keep those in Duncan happy, and says its primary mission is creating good-paying jobs with benefits, particularly in industry and manufacturing.

It can make some spending decisions independent of the city, which as a trust collects money for the foundation but does not direct expenditures.

The foundation does not want its mission muddied and says cash on hand is needed to compete for business ventures. It could take millions of dollars, for example, to construct a building and provide other incentives just to land one big employer.

But Mayor Gene Brown says DAEDF needs to be a front-runner in supporting street improvements in some manner.

“Times have changed so I think we need to talk about this and how we can help each other out,” Brown said. “If they (industry) look at the city and we are not making repairs they are not going to make big investments in the city.”

Herrington and DAEDF President Lyle Roggow noted that voters have overwhelmingly renewed the economic development tax three times, the last time in 2008.

“We feel like we have had a clear mission and have wanted to focus primarily on jobs and in doing so focusing on the manufacturing sector,” Herrington said.

Says Roggow: “If you broaden it too much, pretty soon you have watered it down.”

Roggow said there was no organized campaign for the street bond that failed in May “nor were we really even asked” by the city to play a part.

The city does have some leverage over DAEDF, especially heading into next year.

The half-cent sales tax collected for DAEDF expires in July 2014, so voters have to renew it in a city-wide vote before then to keep in on the books.

But the council decides whether to put the renewal vote on the ballot. Frieda said there is a way to get such tax measures on ballots through a petition process, but historically, the Duncan City Council has decided those matters here.

“I think it would be discretionary on the part of the council on whether they do that or not,” Frieda said.

Frieda said the city government as an entity has never received any part of the half-cent sales tax for DAEDF, including any money for streets.

“It’s important for the city to know if the Economic Development Foundation wants to take part in improving the infrastructure and the City Council has to analyze the effect of continuing the sales tax for economic development,” Frieda said.

Roggow and Herrington said this also would be a good time to examine the city’s finances as part of a bigger picture in doing something about streets. They questioned, for example, the city’s debt.

Frieda said the city had provided its budget to DAEDF.

“The DAEDF, along with every other citizen, has been invited to every council meeting where we discussed the budget and DAEDF has not shown an interest to attend any of those meetings,” he said.

All, however, said they were willing to talk about moving forward and the time was ripe for the dialogue.

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