UPDATE: The Sunset Hills Board of Aldermen voted 6-2 Tuesday night to place the extension of an existing half-cent, capital-improvement sales tax on the Aug. 7 ballot.

Ward 2 Aldermen Scott Haggerty and Thomas Musich were opposed. Look for complete coverage in the May 17 issue of the Call.

The original May 10 article: A proposal to seek voter approval of 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 slated to meet Tuesday night — after the Call went to press.

The city’s Finance Committee voted 4-0 last week to recommend aldermen consider placing the sales-tax extension on the Aug. 7 ballot. Finance Committee member Mike Sawicki, a former Ward 1 alderman who was elected city collector last month, was absent from the April 30 meeting.

The motion to recommend the Board of Aldermen seek the sales-tax extension was made by Ward 4 Alderman Art Havener, who serves as committee chairman, and seconded by Ward 4 Alderman Pat Fribis, who serves on the panel.

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 and a new public works building, 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, according to Mayor Bill Nolan. As a result, a surplus has accumulated in the capital-improvement fund because the city has been unable to match the sales-tax revenue with general revenue, Nolan has said.

The bonds were issued in 1996, refunded in 2004 and are set to be retired in 2016.

However, if the bonds are retired, the tax would end unless voters elect to extend it.

The city has the funds on hand to retire the bonds, which would save roughly $32,000 in interest over the next four years. The city is paying 4.5-percent interest on the bonds while the capital-improvement fund is generating 0.03-percent interest.

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.

The Finance Committee recommended aldermen pursue the sales-tax extension and the retirement of the outstanding bonds.

In addition, the panel recommended the establishment of a capital-improvement committee comprised of residents and elected officials to identify and prioritize the city’s long-term and intermediate-term capital needs for which the sales-tax revenue would be used. The panel also would periodically monitor the progress of those capital-improvement projects and revise the long-term plan, if needed.

Finance Committee members arrived at their recommendation following a lengthy discussion that encompassed such topics as the definition of a capital expenditure, transparency and accountability.

The deadline for placing the sales-tax extension on the Aug. 7 ballot is Tuesday, May 29.

Nolan last fall 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 was chaired by Sawicki. Besides Sawicki, the panel included five former mayors — Ken Vogel, Nancy Benson, Jim Hobbs, John Hunzeker and Mike Svoboda — and five residents — Ann Ludlow, Kurt Krueger, Michelle Heutel, Ken Conley and Havener.

Havener was elected to the Board of Aldermen in April, and Conley was appointed to the Finance Committee in October.

In December, Sawicki made a presentation to the Board of Aldermen in which he reported the committee was recommending aldermen place a measure on the April 3 ballot asking voters to approve a permanent extension of the existing half-cent, capital-improvement sales tax.

Sawicki presented a proposed ordinance for the board to consider in January to place the issue on the April ballot. Aldermen had no questions for Sawicki after his presentation at the Dec. 13 meeting.

After a first reading of the ordinance on Jan. 10, the board voted 6-2 against a second reading, effectively rejecting the measure.

Ward 1 Alderman Dee Baebler’s motion to suspend the rules and conduct a second reading of the measure was seconded by Ward 3 Alderman Stephen Webb. Opposed to the second reading were then-Ward 1 Alderman Frank Hardy, Ward 2 Alderman Scott Haggerty, then-Ward 2 Alderman Tom Hrastich, Ward 3 Alderman Jan Hoffmann, then-Ward 4 Alderman Claudia Svoboda and Fribis.

None of the aldermen opposed to the second reading commented on their “no” vote at the meeting, though Hrastich later termed the Revenue Review Committee’s analysis and presentation “inadequate.”

Hrastich withdrew his candidacy for the April election and Thomas Musich was elected to fill Hrastich’s seat. Havener defeated Mike Svoboda in the April election to fill the Ward 4 seat previously held by Svoboda’s wife, Claudia, who did not file for re-election, and Richard Gau defeated Hardy for the Ward 1 seat.