Most Willmar Council members cool to request for an early end to local option sales tax
WILLMAR -- Most Willmar City Council members don't favor ending the local option sales tax early even though the Willmar Lakes Area Chamber of Commerce believes they should.
The tax approved by voters went into effect in 2006 and expires on Dec. 31, 2012. The ballot question asked if the city should finance completion and expansion of four projects estimated at $8 million with a half-cent sales tax, and said the tax will expire upon all bonded indebtedness issued to finance the projects estimated to be seven years from the date of implementation.
The Chamber told the council Monday the tax should end early because the $9.65 million garnered so far has exceeded the $8 million target. The Chamber says the tax should end early just as the first tax that financed bonds for the library expansion and remodeling project.
City Administrator Michael Schmit said the question states very clearly that the $8 million figure would come into play if the city sold bonds.
"We did think that one through because we knew that if we sold bonds, we would end up collecting the sales tax well beyond 2012 and likely would have ended up in the range of $14 million or $15 million and we didn't want to do that,'' he said.
"That accounts for the decision to try to do these and pay cash as we go and avoid the interest on the bonds. I think the question's very clear. The $8 million comes into play if there's a bond issue and we never ever considered selling bonds once the projects got underway,'' he said.
Dave Baker, chair of the Chamber's Public Policy Committee, said "the only question there is if there were bonds intended. That's what's called fuzzy math. The voters were told $8 million. If it was going to be $14 million with interest, that should have been stated and it was not.''
Council member Ron Christianson, "your basic conservative person'' who doesn't like a lot of government, said the $8 million was an estimate.
Finance Committee Chairman Denis Anderson reminded everyone that the panel talked about the tax at least twice and the committee felt that continuing the tax was the right thing.
"It was their opinion not to make any changes. It's not like we haven't talked about it. It's not that we haven't thought about it. We've researched it and it was the feeling of the Finance Committee that's it's just fine as it is.''
The tax was projected to raise about $1.5 million a year but has garnered more than $1.7 million per year. Schmit said most of the tax revenue is for planning and development of the old airport into an industrial park.
Council member Doug Reese said the money is needed to build the park when industrial users come in.
"Today we need to be visionaries and continue the local option sales tax as it was passed. We need to be able to fund this industrial park development when it is needed and at the extent it is needed,'' he said.
Finance Committee member Rick Fagerlie, a Chamber member, said he didn't recall seeing anyone from the Chamber attend any committee meetings where most council business is done and he didn't recall anyone from the Chamber inviting him to a Chamber committee.
Fagerlie said no money has yet been spent on park infrastructure because the former airport land has not been released to the city. He said additional money will be spent on the western interceptor sewer line that will serve some businesses that want to be annexed to the city.
An opposite view was expressed by Bruce DeBlieck who said the tax should end early. He said the city has collected $8 million and does not have good total project estimates.
Jim Dokken said the city should not go beyond the original project estimates.
"This is a difficult decision and I think that in the future when we do a local option sales tax we have to be careful and prudent on how we spend the taxpayers money,'' he said.
DeBlieck asked if the tax will be on the Finance Committee's agenda.
Anderson said it's been on there at least twice and the committee opted to take no action.
"I think we take it for information and leave it at that,'' he said.
Mayor Frank Yanish agreed.
"Done deal. We'll take it for information,'' he said.
Chamber President Ken Warner said Tuesday he plans to point out that the council is over spending what the voters thought they were voting for.
"We will continue to take the highroad and will now probably have to leave this to the court of public opinion. Our work must continue to show the public on how they might have been duped and shame on all of us for not watching the checkbook a little closer on this issue...'' he said.
"When you're playing with $12 million of our money, we think we should be able to come in and ask questions and not have to be treated like why are you asking us that. That's not fair.''