McCOOK, Nebraska -- The proposed 2012-13 McCook city budget calls for creation of a mobile phone occupation tax, which will put McCook right on track with the rest of the state.
According to the smartmoney.com website, Nebraska already has the highest taxes and fees on wireless service in the nation.
The creation of a 6 percent mobile phone occupation tax will generate an estimated $61,000 annually for the city, when combined with a proposed increase from 3 percent to 6 percent on the land-line phone occupation tax.
The increases are being proposed to finance $158,000 in capital outlay projects, despite a larger amount of uncommitted sales tax funds.
According to the proposed budget the city has $401,797 budgeted as uncommitted sales tax funds, between the one- and one-half cent sales taxes, with $127,252 of that carried over from the prior year.
Mayor Dennis Berry said Monday evening that without the increased phone taxes, the capital outlay projects may require increased property taxes. That would appear to justify the use of uncommitted sales tax funds for the projects, given an announcement from City Attorney Nate Schneider in June explaining that the city was not required to reduce the property tax levy. [See related story at http://www.mccookgazette.com/story/18566...
City Manager Jeff Hancock told the Gazette this morning that use of sales tax is complicated by requirements in the one-cent and half-cent sales taxes.
Although Hancock estimated the phone taxes would generate $61,000 annually, he said during the meeting that the state could only provide the number of cell phones and not the dollar amount, which made predicting how much the tax would actually bring in difficult.
During Monday's budget meeting, Hancock and City Clerk Lea Ann Doak gave examples of several Nebraska cities already charging a mobile phone occupation tax, all of them less than the 6 percent proposed for McCook.
Gothenburg was said to be at 5 percent and receiving $155,000 annually from the tax and Sydney said to be at 3 percent and collecting approximately $85,000 annually. Kearney was expected to increase its phone tax to 6.25 percent, according to the information.
Councilors asked for a more detailed recap of first-class cities in Nebraska to be compiled for their review and for a ordinance to be prepared for consideration and three-readings. Councilor Janet Hepp questioned if anyone actually looked at the charges on their cell phone bill and Councilor Mike Gonzales said he thought there would be room to use sales tax funds to at least reduce the amount of the mobile phone occupation tax needed.
During the meeting Hancock presented the need to purchase three new state-of-the-art defibrillator/cardiac monitors as the driving force behind increases in certain ambulance fees. He explained that the ambulance rate increase is estimated to provide $17,000 annually, which would finance the $89,000 equipment purchase.
Fire Chief Marc Harpham said the equipment would provide much more than the current equipment being used, including the ability to measure the amount of oxygen in a patient's blood and providing the ability to perform a 12-lead EKG for heart attack victims in the field.
Hancock commended department heads for "cutting the fat" and being able to maintain operating expenses at or very close to where they were the previous year.
Hancock said the General Fund was up approximately $380,000 from the previous budget and included some capital items that addressed some needed issues.
Capital items in the proposed general fund budget, which are slated to be funded by the increased land-line tax and creation of the mobile phone occupation tax and combine for $158,000 in projects, include a $12,000 used mower and $15,000 utility vehicle for the airport. The parks department will receive $25,000 for mower replacement and another $12,000 is budgeted for mower replacement at the cemetery, as well as an additional $15,000 for a utility vehicle at the airport. The street department also has $25,000 budgeted for mower replacement.
The highest expense item listed to be funded with the new phone taxes is the police department purchase of two new squad cars and graphics, budgeted at $54,000.
Capital outlay projects that will be funded with standard General Fund revenues include $7,800 for the library to replace the main floor carpet, $6,500 for pagers for the fire department and another $10,000 for miscellaneous fire equipment. Police department items include $1,700 for an in-car video system, $2,250 for an emergency vehicle lighting system and $660 for a vehicle radar system.
The library has $200,000 budgeted for the installation of an elevator, although that item is listed as a budgeted capital outlay item in the General Fund for accounting purposes, the project is actually being funded via a transfer of funds received from the Library Foundation.
A $7,000 pool assessment is similarly budgeted that will be funded with pool reserve funds.
One capital outlay item included in the general fund will be funded with sales tax revenues, $11,000 to replace nets for bleachers and a new fence for the dugouts at the Jaycee ballpark complex.
Utility Director Jesse Dutcher said that the water department had experienced two consecutive months of selling more water than they had ever sold before. The resulting revenue increase would be offset somewhat, by increased expenses the volume caused, but should reduce the amount of a rate increase asked for next year, according to Dutcher. Dutcher estimated the revenue to end the year more than $200,000 higher than what was budgeted.
No discussion occurred pertaining to the largest expense increase in the 2012-13 budget, when compared to prior year, a proposed 2.5 percent across the board cost of living adjustment for all city employees. The wage increase, when combined with automatic merit and longevity increases, reflects a $220,447 annual increase in city salaries.
During the meeting Brahmers Steakhouse and Saloon was also approved for a special liquor license for a August 11, 2012, wedding reception at the Red Willow County Fairgrounds.