City decides to go on its own for sales tax increase.

City decides to go on its own for sales tax increase.

“Let the voters decide,” says Devils Lake Mayor Richard “Dick” Johnson.
That same sentiment was echoed by the city administrator, Terry Johnston.

Johnston helped put together a list of the city’s infrastructure needs looking forward into the next 10 years.
Working with city engineer Mike Grafsgaard, that list included street improvements for mill and overlay estimates for the next nine years. It also included water main replacement projects, new construction in the foreseeable future, downtown improvements ahead for 2018, the west underpass completion, improvements to the city’s recycling center, culvert replacements, sidewalks, the embankment or dike protecting the city and the expansion of and remodeling of the City Offices.

The Mayor explained that thanks to the sales tax income the cost of repairs to existing streets and sidewalks, for example, is divided into 75 percent the city’s responsibility and 25 percent the residents or homeowners’ responsibility.
Specials created by the city’s infrastructure repairs have been considerably lower than in the past because of the financial help coming from the dedicated sales tax.

It is estimated that a 1/4 of one percent increase in sales tax would help fund all the city’s infrastructure needs that they anticipate having to deal with for the next 10 years.
Both the mayor and the city administrator believe the list is pretty accurate and all the city will need is the 1/4 of one percent of an increase.

Park Board proposal
Meanwhile the Devils Lake Park Board is concerned about the community’s recreational needs and has proposed a two story recreation or activity center to be built south of the Burdick Arena, where an outdoor rink now sits.

Initially members of the park board had hoped to link their proposal for a 1/2 of one percent increase in sales tax with the city’s proposal for 1/4 of one percent of an increase, for a total increase of 3/4 of a percent sunsetting in 30 years.
The plan was to bring this increase to a vote of the people in March of 2018.

Change of plan
Now, however, the city has decided to separate the two proposals. So when voters go to the polls on March 13, 2018, they will vote for or against two sales tax increases; one for 1/4 of a percent to help fund the city’s infrastructure needs for the next decade and one for 1/2 a percent to help fund the park board’s proposed activity or recreation center.

The park board, certain they can come up with funding from outside sources, believes the initial $25M to $20M cost for the activity center can be reduced to $19M.
When the ballot for the special election is created voters will be able to vote for both, but they will no longer be tied together. You will be able to vote for both, one or the other or neither.

Mayor Johnson said it made sense to separate the two so the voters could decide.
“That way one proposal won’t be the downfall of the other, the two will stand or fall on their own,” he said.

Special Election
A special election will be held on Tuesday, March 13, 2018, and then voters will have their say on these two sales tax increases.
They will also be voting for the commission candidate to replace Ben Sander, who has moved from the Devils Lake area.

Some facts you need to know:
•Although the initial LAARK project was estimated at $25M, park board officials believe other funding sources will bring that number down to $19M.
•Grocery food sold for home consumption, farm machinery and vehicles are exempt from sales tax and will not be affected by this sales tax increase.
•Devils Lake’s sales tax today is 7 percent.

Why is this important?

The infrastructure needs over the next ten years totals $18,871,660 for an average annual cost of $1,887,166.
Included in this is $495,000 for water mains which we can fund out of the water department.
The West Underpass cost of $161,600 can be deducted from the $1,887,166 which leaves an annual need of $1,230,566.
After all current commitments have been deducted from the city’s revenues there is a shortfall of just over $400,000 annually over the next ten years.
The 1/4 cent sales tax increase will generate approximately $400,000 in the first year and $487,000 in year 10.

Questions to ask:
What other source of revenue does the city have?

Other considerations:
-Sales tax revenue bond ends in 2027 for various waterline replacements - currently using 8 percent of sales tax collections.
-Sales tax revenue bond ends in 20129 for local share of the embankment raise - currently using 5 percent of sales tax collections.
-Could use all or some of $9 fee on water bill for waterline replacements - currently generates @270,000/year

The bottom line: The city’s infrastructure needs in the years ahead will need to be financed, somehow.