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Jilted by city, commissioners slash MEDC funds

Wednesday, April 29, 2009

Red Willow County commissioners, at their weekly meeting Monday morning, slashed in half the county's annual membership contribution to the McCook Economic Development Corp.

All three commissioners voted "Aye" to a motion to pay the MEDC $5,000 for 2009-10, rather than the usual $10,000, although Commissioner Steve Downer said that budgeting one amount and pledging another, "is going down the wrong road. It's wrong to budget it and take it out. Take it out next year. That's the time to do it, not now."

Downer said the county "needs to continue to be a member of the EDC."

Commission Chairman Earl McNutt told Rex Nelson, director of the MEDC, that he is still upset that the City of McCook declined to share the additional one-half cent sales tax that city voters approved in 2007.

Commissioners said at that time they wanted to use half of that sales tax to fund improvements and maintenance to county roads. It was estimated that a one-quarter share of the city's one-half cent sales tax would generate approximately $160,000 a year for the county.

The city earmarked the half-cent tax for the MEDC and additional city projects.

Commission Chairman Earl McNutt said Monday that he feels the MEDC is getting enough funds with the proceeds from the sales tax, and he is concerned about funding the MEDC at the county's usual $10,000 membership contribution.

"Maybe tax payers are making a large enough contribution with the sales tax ... that the sales tax is a pretty sufficient amount going into the MEDC," he said, adding that the county's $10,000 could be "valuable for other uses."

Fellow commissioner Leigh Hoyt said he feels the same way, explaining that commissioners had requested a share of the sales tax so county constituents "can have roads good enough to come into town." Hoyt said the county received "no support" from the city or the MEDC in his and McNutt's requests for a share of the sales tax.

"That made both of us sour on the deal," Hoyt said.

Hoyt also said he is upset that the city has raised dispatching and ambulance fees paid by the county. "We get little or no support" for requests of cooperation between the city and county, he said, explaining that the county wanted to build a joint city-county law enforcement center, fire station and jail -- which city and county voters rejected -- but that the city is now talking about building a new fire station and public safety center.

"This puts the county behind the eight-ball again," Hoyt said.

McNutt said that although the county receives some highway allocation from the state, the county's primary source of revenue is property taxes. A county is not allowed to impose a sales tax if a municipality already has one, Hoyt said.

"We can only piggy back" on a city's sales tax, he said, adding that he is reluctant to impose a sales tax on Indianola, Bartley, Danbury and/or Lebanon.

Nelson said that he acknowledges commissioners' concerns and noted inequalities, but said that it would have been inappropriate for the MEDC to act as "intermediary" between the city and the county on the sales tax issue. "Most of your concerns are not the MEDC's responsibility," he said.

Nelson pointed out that the county benefits directly from MEDC projects, and particularly from those that create jobs within McCook.

Nelson said that 31 percent of the county's residents live outside McCook and that 14 percent of McCook's workers commute from outside the county. They rely on McCook for primary and second-income jobs, Nelson said, for salaries and insurance.

The MEDC can help build the county's tax base, Nelson said, explaining that the TIF (tax increment financing) on Valmont Industries comes off in two years, at which time the county's share of taxes will be $58,860. The Nebraska Department of Corrections Work Ethic Camp in McCook employs 81 people, Nelson said, infusing $9 million into the economy and $400,000 in taxes to the county.

Once renovated, the Keystone project in McCook will provide a $3.7 million economic impact, and $200,000 in area taxes.

The MEDC provides 80 hours a year of administration for the county's revolving loan fund program, Nelson said, and training costs $2,500 a year.

"The MEDC needs the county as a partner," Nelson said. "The times and the economy would indicate that the MEDC needs more support, not less."

Nelson told Dorwin Felker of rural McCook, who questioned the purpose of the MEDC, that the MEDC is a non-profit corporation that is supported largely by partners' contributions, such as businesses that "get nothing (in return) except the generation of revenue into the community."

McNutt said the county "hasn't felt that impact." The bottom line is, he said, whether or not to contribute to the MEDC in the usual $10,000 amount, or to contribute a different amount.

Dale Dueland, a member of the MEDC board for three years, encouraged commissioners to examine the county's tax base, where it could be without the business development and expansion of the tax base attributable to MEDC efforts. He recommended that commissioners allow the MEDC to get through one cycle of the sales tax -- which was implemented in July 2008 and that the MEDC started receiving in September 2008 -- before making decisions about the county's contribution to the MEDC.

Leigh Hoyt made a motion to fund the MEDC with a $5,000 contribution for 2009-10, a motion seconded by McNutt. Downer said, "I'm not sure that's the right message we want to send -- that we back out of something we've agreed to."

Nelson said the lesser contribution will have an impact on the MEDC budget, which will have to be adjusted for the reduction in funding.

The motion passed, 3-0.


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The county has authority to levy taxes under the limitations of Nebraska State Statute as does the city. The county can still enact a county sales tax but it wouldn't be applied to McCook. If they don't "want" to enact a tax on anyone except McCook then that's a decision they are accountable for, not the MEDC.

Are they seriously upset that the city exercised their rights under state law to provide better streets, parks and other improvements for their citizens instead of just handing it over to the county so that the city could bailout the county? It's the county's responsibility to maintain their roads regardless of whether people use them to drive into a particular town or not.

When that TIF on Valmont expires, the county will receive almost 6 years worth of MEDC funding every year just with the taxes off Valmont alone. Talk about being ungrateful. They say they haven't felt the impact of the MEDC but they would certainly feel the impact if we didn't have the MEDC and the great things they've helped bring to McCook AND the county.

The city went in with the county on a joint city-county facility just like the county asked and the people said no. Now there is stimulus funding for a fire station ONLY, which wasn't available before, so the city is looking at that as a way to build a fire station. What are they supposed to say, no thank you, give the money to another community but please raise our taxes for it anyway?

-- Posted by McCook1 on Wed, Apr 29, 2009, at 12:27 PM

I wish some of the people in McCook would realize that if it wasn't for the people outside the city limits who have to shop there and work there The city might not have this money we pay their sales tax so why not share with the county.

-- Posted by eajwmom on Wed, Apr 29, 2009, at 2:29 PM

The county couldn't survive without the property taxes they collect from the people in McCook. I'd say McCook shares plenty. There's also the legal question of passing a CITY sales tax for COUNTY purposes. The MEDC was able to collect sales tax money through LB840 but the county was denied a sales tax since McCook already had one. You can't just "piggyback" without being granted that authority by statute.

-- Posted by McCook1 on Wed, Apr 29, 2009, at 2:42 PM

The point that is lost in all of this, is that all the county residents pay county taxes, and almost 70% of those county residents are people that live inside the city limits of McCook. So at least 70%, and probably higher, of the taxes to fund the county come from McCook taxpayers. And yet the County Commissioners seem to think it is always a "us vs. them" mentality--that the city and residents of McCook are against the out-of-city residents.

Maybe the answer is just one governing body--a City-County Board or Council elected at large by the all of the county residents. It would certainly be more efficient and result in cost savings for everyone. But if the non McCook residents in Red Willow County don't want that, I would suggest that they try a little harder to cooperate with the city of McCook, starting with the County Commissioners. They need to remember that 70% of their votes come from within the city limits of McCook, and if they keep fighting the city, the Mccook voters may put all city residents in as County Commissioners. Now that would be interesting.

-- Posted by McCook Oldtimer on Wed, Apr 29, 2009, at 3:36 PM

I see two sides to this..the County Commissioners understood that they would be able to receive some of the sales tax $'s but they didn't so now they aren't going to "play" with the city and EDC. The Tax Increment Financing ends in 2 years. My question is : IS VALMONT STILL GOING TO BE OPEN? Recent layoffs are not the first ones that have occurred. With production slow downs is this a sign of more to come? Why didn't the MEDC apply to be a state wide call center for Health and Human Services? We have 30 staff that will either be moving or loosing very good paying jobs in less than a year and half. Layoffs of 17+ at Valmont, 40 at Parker, 30 at Health and Human Services. Is the Keystone project which has been a huge focus and will probably be a good deal down the road but loosing 100 jobs in our area doesn't look like Economic Development or a good thing for the city or the county. Oh I forgot Walmart is hiring 32 hours a week..feed your family on that.

-- Posted by ALL4MCCOOK on Wed, Apr 29, 2009, at 5:36 PM

Hoyt and McNutt never supported city sales tax but now want the county to share cities monies after they got the city citizen support and no from county folks when ask at election time ??? Time for all City/County commissioners in future elections at least to replace Hoyt and McNutt i think Downer gets it that a deal is a deal and now how do you trust the other 2 except to replace them asap . Dueland and others better get you commissioners caps on and start a serious run at replacing these two timers who dont support business in McCook and Redwillow County..........

-- Posted by Cornwhisperer on Wed, Apr 29, 2009, at 8:03 PM

Guess the commissioners haven't graduated from pre-school yet. If you don't let me play with your toys, or you won't give me some of your candy, I'm going to cry and tell my mommy.

Wow what a bunch of childish fellers.

Keep up with this kind of BS, perhaps the city could secede from the county! How would the boys make up for that 70% loss of tax revenues?

Perhaps they should stop complaining about the city saying no to their pie in the sky plan, and be happy that the citizens of McCook do not raise hell about not getting their money's worth of services vs. taxes paid.

All4McCook, if I remember correctly the city never said anything about giving the county part of the pie, that was entirely an idea floated by the county and they came to the city with their hands out, and the city said no from the start.

Mr.Hoyt stop your bitching about the fire barn, due to the screw up from the county's side you guys lost the option on the west ward site, and things went down hill from there, then you and the city boys dream up a plan with each of them wanting their own castle within the walls of the whole thing. If the plans would have been about 3/4's or less of what was proposed if might have passed. You guys did not learn a thing from the school system, larger is not better around here, only after about 3 or 4 trys and numerous scaling back of the plans did the city pass the school bond issue.

Grow up boys, stop your whineing and take some of that "free money", cause if you don't Lincoln or Omaha will gladly take your share. Just don't come crawling to the city citizens and ask us for more tax money to take care of something that the "free money" would have paid for.

EAJWMOM, we already "share" with the county, it's called 70% of the tax revenues come from McCook. The sales taxes do not pay for all the services enjoyed by the out of towners, our city property taxes pay for a lot of those things too. Yes the city businesses could not survive without the good people from out of town, but the county could not survive without the good people of McCook picking up a good share of the tax burden.

-- Posted by goarmy67 on Wed, Apr 29, 2009, at 8:04 PM

Just a note on the HHS call center proposal: MEDC did a considerable amount of legwork on it. The bottom line issues were that the minimum call center size was 50 seats and the number of workers with current DHHS experience was a primary scoring criteria. By their data, we have only 6 in McCook. In addition, their building criteria was stringent, required a private investor to step up to take the risk on a lease and it was going to take several thousand dollars of engineering to put together specifications in order to apply. Although we were encouraged to apply, we found that the program details effectively locked out small communities.

Rex

-- Posted by Developer Guy on Thu, Apr 30, 2009, at 8:47 AM

I think that maybe before Hoyt and McNutter start to complain and whine about how the city is not giving them money for this or money for that, maybe they need to look at their own way of doing business. Loaning a pipe dreamer hundreds of thousands of dollars to build a helicopter kit. The guy doesn't make payments for how long? And then, we give him much more time to make sure that he has time to leave the country and lose track of him before we decide that maybe we should do something? Bad business practice if you ask me. These two should remember that they were elected by and represent 70% of the CITY voters. So, Hoyt and McNutt, if you don't like it, why don't you all consider just going away just like the helicopter company did? Only difference is that not many would come looking for you.

-- Posted by McCook Supporter on Thu, Apr 30, 2009, at 8:56 AM

The county can increase property taxes, increase lodging tax, have a sales tax in Indianola, Bartley, Marion, Lebonon, and Danbury so they have other revenue streams available other than asking for a hand-out from the city. The city never promised the county any sales tax money. The city was clear before the election that it would spend the new revenue on recommended projects the city taxpayers proposed. The city DID cooperate with the county on the joint safety center issue and the voters throughout the county soundly rejected it. The dispatch and rescue services the city provides the county is at a cost to the county that does not even cover the city's expenses. Mr. McNutt and Mr. Hoyt are just wrong in thinking the county's budget problems are the city's responsibility, especially when city taxpayers also pay county tax. The county commissioners were foolish to not support the MEDC whose efforts have provided jobs for all county residents and will provide increased taxable valuations for the county in the future. The county might be pennywise with their reduction in support of MEDC but they are pound foolish and they need to stop bashing the city for their budget problems.

-- Posted by dennis on Thu, Apr 30, 2009, at 11:47 AM

All these officials act like a cat with a mouse under each paw and one in it's mouth and then one runs in front of it. Hmm???

You all should get your heads out of the sand and work together. This isn't kindergarden. This is reality. STOP the nit-picking at each other.

-- Posted by edbru on Fri, May 1, 2009, at 11:39 PM


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