Sales tax use clarified as budget process begins

McCOOK, Nebraska -- City Attorney Nate Schneider issued a memo to McCook City Council members in response to recent claims that the increasing amount of sales tax received by the city should require a reduction in the city property tax levy. In the memo Schneider explained that a reduction in the levy was not required and said those who voted yes for the tax voted for the "described property tax relief," which he said could be either direct property tax relief or relief through indirect means.

"Relief also comes in the form of the city not having to increase its levy due to the use of sales and use tax for certain capital expenditures," said Schneider in the memo, distributed following the council's regularly scheduled meeting, Monday evening.

The memo from Schneider was in response to former councilman Aaron Kircher claiming during a May meeting that the amount of sales tax received in the city's general fund as "property tax relief," exceeded the difference between the actual levy amount and the maximum levy limit. Kircher explained that the revenue was greater than what would come in if the city property tax levy were increased to its maximum amount and should require a reduction in the levy to balance.

Prior to the 2007 vote the sales tax revenues collected from the one-cent tax were anticipated to generate approximately $1.3 million, with half of that described as going to property tax relief and the other half to city infrastructure improvements such as water, sewer and parks.

Funds collected from the half-cent tax were expected to be $650,000 to be split between the city and MEDC at $325,000. The half-cent was said to be used for the buy-down of water and sewer debt and city-wide improvements such as streets and parks.

A sales tax report from the city clerk's office shows that as of October 2011 the city has accumulated $1.9 million in unspent sales tax receipts.

During Monday's meeting councilors received a proposed strategic budget plan for the city from City Manager Jeff Hancock. The plan featured housing development as the highest short-term priority, renewal of sales tax revenue as the highest ranked long term project and was drafted from input provided by councilors and city department heads during their strategic planning session in April.

Councilors elected not to take action on the item and indicated they would discuss it further during their budget retreat meeting Tuesday evening, 4 p.m., at the Heritage Senior Center. The meeting is open to the public and will feature presentations from each of the city departments, discussion of the city's financial outlook and issues, as well as council projects

During Monday's meeting Gene O. Morris was given approval to close a portion of Norris Avenue for a hot rod gathering on July 7, 2012, in conjunction with the showing of a hot rod movie at the Fox Theatre.

Morris said that Rod and Custom magazine had labeled the movie, "The Deuce of Spades," the best hot rod movie ever made.

"This event will be a good draw for sure and a love affair for our hot rodders," said Morris, who added it was not restricted to cars and anything in the hot rod genre was welcome.

Norris Avenue will be closed from West D to West E Street, and West D Street will be closed from Norris Avenue to West First Street, on Saturday, July 7, 3-10 p.m., for the event.

Morris also said a booklet was being produced in support of the event and all booklet proceeds would go to benefit the Fox Theatre renovation project.

An ordinance that vacated a city alley located between lots seven and eight of the Henton's First Addition, on the north side of Ponderosa Drive, was unanimously approved with the three-reading rule suspended. According to the meeting agenda an individual interested in purchasing the two lots to build a new home on them had solicited the property owner, Delores M. Henton, to request a lot line adjustment to combine the two lots and for the city alley between them to be vacated.

At the request of city staff Henton agreed to provide two 10 foot easements to the city on either side of the newly formed lot, after the lot-line adjustment is completed, for potential future sewer utility needs. City staff cited an urgency to complete all transactions as the reason for suspending the three reading rule on the item.

A procedural change that more than doubles the dollar amount for public works construction projects that triggers the required involvement of an engineer or architect was approved on its second of three required readings. Public works construction projects that reach a cost of $40,000 require the involvement of an architect or professional engineer, the change will increase that amount to $100,000.

Other items on the consent and regular agenda:

* The third and final reading pertaining to the implementation of an arborist license, to be required by any business engaged in the pruning or removing of trees within the city, was approved by councilors. The license will require a $75 annual fee and proof of liability insurance with minimum amounts of $500,000 per occurrence. The policy is estimated to cost $650 annually and requires the city be listed as an additional insured on the policy, triggering notification if it is cancelled.

* A rezone request of three lots in the Fairacres Addition received final approval on its second reading after city staff requested the remainder of the three-reading rule be suspended. The rezone targeted lots four, five and six of block one and will reclassify them from Residential Medium Density Mobile Home District to Business Commercial. The request was approved by councilors upon its first reading and city staff indicated that no comments for or against the rezone have since been received, prompting the suggestion to suspend the necessity of a third reading on the item.

* Utility Director Jesse Dutcher presented councilors with the nine most accessible development areas around McCook. Dutcher's research was recently presented to the McCook Planning Commission and is intended to assist potential developers in identifying the most affordable areas in the community for new development, specifically pertaining to water and sewer utilities.

* Sampson Construction was authorized to extend the closure of West C Street, from West Fourth Street to West Fifth Street, through Nov. 23, 2012. The street has been closed for the staging of steel and other materials being used in the construction of the Municipal Facility on West Fifth Street.

* Parker Hannifin was approved to occupy city right of way for the construction of two wastewater monitoring manholes and a private forcemain on Karrer Street and South Street. The monitoring holes are being constructed by Parker Hannifin to meet requirements of their National Pollutant Discharge Elimination System permit.

* Figgins Construction of Red Cloud, Nebraska, was awarded the 2012 armor coating bid with a unit cost of $4.21. The price marks the third consecutive year that armor coating costs have increased for the city and represents an approximate cost increase to the city of $3500 to $7200 annually.

* MO Dough LLC was approved for a special liquor license for a class reunion at the Keystone Business Center on July 28, as well as for a reception at the U.S. Army Reserve building on June 23.

* Taste of Texas BBQ, Inc. was approved for a special liquor license for a dance at Kiplinger Arena on July 28.