Sunset Hills panel continues work on capital-improvement plan

Committee looks to finalize its five-year plan this week

By Mike Anthony

A Sunset Hills committee charged with formulating a five-year plan outlining the city’s capital-improvement needs is continuing to work to meet its self-imposed June 29 deadline.

The Capital Improvement Committee has been meeting weekly since its May 24 organizational meeting to formulate the capital-improvement plan, which will include an overview, needs assessment and recommended projects for the next five years.

Committee members established the June 29 target to complete their work, as voters will consider a permanent extension of the city’s existing half-cent, capital-improvement sales tax in the Aug. 7 election.

Aldermen voted last month to adopt an ordinance placing Proposition 1 on the ballot.

The ballot language asks voters if the city should continue to impose the half-cent sales tax for the purpose of funding capital improvements and paying the costs of operation and maintenance of those capital improvements.

A simple majority is required for approval of Proposition 1.

The Capital Improvement Committee was scheduled to meet Monday evening — after the Call went to press — with the goal of finalizing its five-year plan.

Committee members tentatively scheduled an additional meeting for 6 p.m. today — June 28 — if needed.

At three meetings, committee members discussed how capital improvements should be defined before approving a definition June 11.

The panel agreed capital improvements will be defined as “assets owned or leased by the city of Sunset Hills, for which the city has the authority to acquire, pay the costs of, maintain, operate or to contract with other persons to have the same done, including, but not limited to, roads, streets, land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure and all other tangible or intangible assets that are used in operations, having initial useful lives extending beyond a single reporting period and having a unit cost greater than $1,000.”

Initially, the proposed definition included a $5,000 threshold, but after discussing the issue at length, committee members agreed to reduce the threshold to $1,000.

Committee members last week discussed establishing a scoring methodology to prioritize the city’s capital-improvement needs for the next five years.

Factors to be taken into account when prioritizing capital-improvement projects could include:

• Health, safety and welfare.

• Regulatory or legal mandates.

• Operational necessity.

• Implications of deferring the project.

• Budget impact.

• Strategic goals.

• Grant funding opportunity.

• Community demand.

• Implementation readiness.

The half-cent, 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 improvements, among other items.

Because the sales tax is tied to a bond issue, restrictions exist on how revenue from it can be used. For example, for every dollar the city wants to spend from the capital-improvement tax for street improvements, 57 cents must be appropriated from general revenue.

As a result of a decline in general fund revenues, a surplus has accumulated in the capital-improvement fund. A surplus of $103,000 is projected for this year.

At the end of April, the capital-improvement fund had a cash balance of $688,184.

The bonds were issued in 1996, refunded in 2004 and are set to be retired in 2016. If the bonds are retired, the tax would end in 2016 unless voters elect to extend it.

The capital-improvement sales tax currently represents roughly 12.5 percent of the city’s total gross revenue.

If the remaining bonds totaling $450,000 are redeemed after the August election, the city would save an estimated $41,000 in net interest expense, and have a cash surplus of more than $238,000 in the capital-improvement fund.

In addition, the tax will continue to generate $875,000 per year for capital improvements. Redeeming the bonds also will eliminate the requirement that capital-improvement funds be matched with general revenues.

The ordinance placing the sales-tax ex-tension on the ballot also established the Capital Improvement Committee, which is comprised of four aldermen who are on the city’s Public Works Committee — Chairman Stephen Webb of Ward 3, Richard Gau of Ward 1, Alderman Thomas Musich of Ward 2 and Pat Fribis of Ward 4 — and six residents — Diane Stolzer, Robert Flynn, Bruce Studer, Michael Fitzgerald, Thomas Lynch and Greg Zveitel.