Sunset Hills Mayor Bill Nolan last week appointed an 11-member committee to study the city’s revenue stream, including reviewing a number of commercial fees and taxes that have remained unchanged since 1994.
The Revenue Review Committee, which tentatively planned to have its first meeting sometime this week, is chaired by former Ward 1 Alderman and current Finance Committee member Mike Sawicki.
Besides Sawicki, the panel includes five former mayors — Ken Vogel, Nancy Benson, Jim Hobbs, John Hunzeker and Mike Svoboda — and five residents — Ann Ludlow, Art Havener, Kurt Krueger, Michelle Heutel and Ken Conley.
Early budget projections for 2012 indicate a potential deficit of $161,000 and Nolan said city officials have to look at not just expenses, but revenues.
“When revenue starts to slide, you just can’t look at expenses,” he said. “In business, you’ve got to look at both. How do you increase revenue? How do you decrease expenses?”
Nolan recalled that he served on the city’s Revenue Study Committee in 1993.
“In 1993 when the city was faced with declining revenues and not able to cover their expenses, they formed what they called a Revenue Study Committee under Mayor Vogel,” he said. “The Revenue Study Committee analyzed all of the revenue sources and went to the Board of Aldermen and put eight propositions on the ballot in April of ’94.”
Those propositions included: increasing the city’s business license tax to 20 cents per square foot from 10 cents; revamping the city’s merchant license tax; increasing the city’s sales tax by a quarter cent; increasing the city’s commercial utility tax to 7.5 percent from 5 percent on electricity, natural gas, water and telephone service; and authorizing a half-cent capital-improvement sales tax to fund a more than $5.7 million bond issue.
The bond issue would fund City Hall repairs and expansion, a new police station, a new public works building and street repairs, among other items.
All eight of the measures were overwhelmingly approved by voters, Nolan noted.
“That was the last time anybody looked at those rates,” he said. “Our rates have been exactly the same since April 1994. Now at the time, I was vice chairman of the study committee. We learned that we were charging 10 cents a square foot for a business license and everybody surrounding us was getting 20 cents.
“We don’t know today whether we’re in line with everybody else still or if, in fact, we’re behind what the other communities are charging,” he continued.
“So realizing that and realizing that we haven’t looked at them — a little hard to believe — in 18 years, I picked five citizens and appointed Mike Sawicki, a former alderman and a member of the Finance Committee, and put Mike Sawicki in charge (as chairman). The one in 1993 was all citizens. There were no aldermen on it and there were no former mayors on it, but I thought it would be better if we’re going to take a vote to the citizens that all the former mayors have some input into it. If nothing else, it should avoid fighting about what happened under somebody else.”
Though voters approved the bond issue, Nolan said restrictions exist on how the revenue from the half-cent capital-improvement sales tax can be used.
“… It looks to me in order to balance the budget, I don’t think we’re going to be able to stay on schedule and replace police cars because we’re not allowed to use our capital-improvement fund to buy police cars. Under the bonds, we can only use it to maintain the buildings we built and contribute 43 percent toward the streets,” he said, adding that to pay for street repairs, the additional 57 percent must come from the city’s general revenues.
“And the city’s lived with that for 18 years. So we take care of the flowers and we maintain and pay the electric bill and this stuff on the police station out of the capital-improvement fund,” the mayor said. “The idea is to sit down and let’s review where we are — therefore, I called it the Revenue Review Committee — review what we did 18 years ago, see if it should be changed and take a serious look at the capital-improvement half-cent sales tax and get the burden off of the general revenue matching thing.
One possibility, Nolan suggested, would be to pay off the existing debt on the 1994 bond issue — currently scheduled to be retired in 2016 — by using the fund’s current reserves. That would save about $70,000 in interest, he said.
Then city officials could ask voters to approve a replacement half-cent capital-improvement sales tax that would lift the current restrictions on how the revenue can be spent, Nolan said.
“… The way it sits now, if we paid off the bonds, the tax would go away … So we put a new one in, which we’ve had for 18 years and direly need to run the city, and then the old one goes away,” he said. “So everything is the same. There’s not a tax increase involved in that issue …
“It’s kind of a bookkeeping thing and it would really have no net impact on our revenue. It would have an impact on how we can utilize the revenue we have,” Nolan said. “Now I don’t know whether the Revenue Review Committee is going to find any other issues that they think might be included on the ballot. I do recall very vividly that when we took eight tax measures to the Board of Aldermen in 1993 and said: We want to put eight tax increases on the ballot or taxes on the ballot. In that date, the half-cent sales tax was a new tax. The quarter-cent was a new tax and the changes in the other business licenses and fees were new.
“They (aldermen) all went: Oh my God, we’re in trouble. Everybody will throw us out of office. We got a 72-percent ‘yes’ vote on all eight of them. All of them won better than two-to-one. That was called the Say Yes campaign — Say Yes for Sunset Hills.
“So my hope is that come April, we will have a Say Yes for Sunset Hills Again campaign or Say Yes Again for Sunset Hills.”