Committee says local-option wording allows for public projects

The Local-Option Sales Tax Oversight Committee agrees with Mayor Ron Corbett that the referendum language approved by voters allows the tax revenue to be spent to “match” federal disaster dollars that are coming to the city to help it build new public buildings.

At the same time, the committee members emphasized at a Thursday evening meeting that the top priority for the $80 million in sales-tax revenue expected to come in over 63 months for flood recovery and protection should be used for the purchase and rehabilitation of flood-damaged housing.

However, 28 months into the city's flood recovery, most on the committee seemed to acknowledge that there may not be sufficient “gaps” in housing needs that are not already being covered by a huge influx of federal dollars into the city to help with housing buyouts and rehabilitation.

Even so, committee members Elizabeth Hladky and Doug Wagner suggested that the City Council first revisit housing issues to see if other gaps and unmet housing needs may still exist that could benefit from some of the local-option sales tax revenue.

Gary Ficken, who was renamed committee chairman, suggested that the council consider setting deadlines on housing programs now in place before it moves on to use some of the sales-tax revenue, as the mayor has proposed, to buy land for projects like the Time Check Recreation Center, the Central Fire Station and the library.

Two committee members, Jeff Palmer and Lisa Kuzela, said they believed that voters who backed the local-option sales tax in a March 2009 vote really did not want to see any of the money used for anything other than housing or direct help to flood victims.

Kuzela called the part of the referendum language for how funds should be used – which reads, “and matching funds for federal flood dollars to assist with flood recovery or flood protection” – “a little dangling clause” that voters really didn't support.

Wagner disagreed, saying that the “matching” language was not a dangling phrase, but is wording that is a “very clear” part of the language voters approved.

Hladky said she understood when she voted in the city referendum on the sales tax that a time would come when some of the sales-tax revenue would be needed to match federal dollars to help the city replace its flood-damaged infrastructure. Now it's time to consider using some of the money to take care of infrastructure, she said.

Hladky also pointed out that the city's current plan is to use $25 million of the $80 million in direct payments to flood-impacted homeowners and renters for personal possessions lost in the flood. This use of the money, which Kuzela says she helped bring about, has nothing to do with housing and only exists because it matches other federal dollars, Hladky noted.

In fact, the committee, which is a recommending body, previously concluded that the City Council's use of sales-tax revenue for personal-possessions losses does not meet the referendum language because federal dollars that came to homeowners or renters already have come and were not contingent on there being any matching local funds.

To get around this objection, the City Council has required homeowners and renters to have received previous federal disaster help before they now can qualify for sales-tax help in the personal-possessions program. In that way, the council has said the local money matches federal money.

The Office of the State Auditor subsequently concluded that the council's interpretation of the word, matching, was not the standard interpretation of matching funds, but, nonetheless, was not improper.

In the Thursday evening discussion, Ficken and City Council member Chuck Wieneke, who is the council liaison to the committee, both talked about the use of sales-tax revenue for public buildings like the Time Check Recreation Center, the Central Fire Station and the library.

Neither mentioned the use of money for the city's new Event Center, which Mayor Corbett has included in his list of possible projects that may need some sales-tax support. Corbett has pointed out that federal disaster dollars are paying much of the Event Center bill.

Committee member Linda Seger, who is also chairwoman of the city's site selection committee for a new recreation center, said she was “astounded” about all that the city might want to include in a new Time Check Recreation Center. She said she didn't think local-option sales tax revenue should be used to build any “Taj Mahals” and that the revenue shouldn't be seen as a “golden goose” for overly ambitious building plans.

Kuzela said she didn't think the city should use any sales-tax revenue for the library because the City Council did not pick the least-expensive site on which to build the library.

Ficken said the City Council made policy decisions about the library site, not the Oversight Committee. Wagner agreed. He suggested Kuzela run for City Council if she wanted to vote on such matters.

To date, the city has taken in $24.6 million in local-option sales tax revenue, 10 percent of which goes to property-tax relief, 90 percent to flood recovery. To date, the city has spent $$15.5 million of the flood-recovery dollars, $13.6 million of which has gone as “matching” dollars for the personal-possessions program.

The City Council has obligated $66 million of the $80 million to date, though $25 million set aside for the renovation of landlord properties may need $9 million to $10 million less that first thought, Drew Westberg, special assistant to the city manager, noted. An additional $10 million in obligated funds for other projects has only seen about $150,000 in spending.