Staff Report

An ordinance to place a proposition on the April 3 ballot asking voters to approve a permanent extension of an existing half-cent, capital-improvement sales tax was set to be considered this week by the Sunset Hills Board of Aldermen.

The Board of Aldermen was scheduled to meet Tuesday night — after the Call went to press.

The city’s Revenue Review Committee last month recommended the Board of Aldermen place the sales-tax extension before voters.

Mayor Bill Nolan appointed the 11-member Revenue Review Committee in October to study the city’s revenue stream, including reviewing a number of commercial fees and taxes that have remained unchanged since 1994.

Revenue Review Committee Chairman Mike Sawicki, a former Ward 1 alderman, last month presented a proposed ordinance for the board to consider to place the sales-tax issue on the April ballot.

The capital-improvement sales tax was approved by voters in 1994 to fund a more than $5.7 million bond issue for City Hall repairs, a new police station, a new public works building and street repairs, among other items.

The bonds issued in 1994 are scheduled to be retired at the end of 2016. However, if the bonds are retired, the tax would end without a voter-approved extension.

Sawicki told aldermen last month his committee views the extension of the sales tax as a “win-win” and urged the Board of Aldermen to give “serious consideration” to placing the measure on the April ballot.

At the Dec. 13 aldermanic meeting, Nolan said he supported placing the extension on the April ballot. Because the sales tax was tied to a bond issue when it was approved in 1994, restrictions exist on how revenue from the half-cent, capital-improvement sales tax can be used.

“Without a bond issue, it’d just be normal capital-improvement income used for capital-improvement expenses in the future,” the mayor said last month. “We have a hitch in the present bonds in that every time we want to spend a dollar from the capital-improvement account to repair roads — and this is the big issue involved here — we have to appropriate 57 cents out of every dollar that we spend from general revenue …”

The city has the funds on hand to retire the bonds, which would save $50,000 to $60,000 in interest over the next four years. But without a voter-approved extension of the sales tax, it would sunset.

If voters were to approve the extension of the half-cent sales tax and the existing bonds were retired, the tax would generate about $850,000 annually for the city.