Sales tax debated
A $300,000 question lingered over budget talks for Iola City Council members Wednesday.
Last fall, Iola voters overwhelmingly extended a half-cent sales tax, noting the proceeds have helped fund a number of major street projects and other improvements over the past 30 years.
Another project looms in the not-so-distant future — a full-depth rebuild of U.S. 54 from McDonald’s to Jump Start Travel Center — but Council members noted a large variable remains unknown.
The issue, discussed in a special budget workshop, is whether the city will be asked once again to allocate a portion of the sales tax revenues to the county-owned Allen County Regional Hospital.
Since 2011, the city has donated about $300,000 annually to help pay for construction of the hospital, which opened its doors in 2013. The total paid to date is $2,297,047.
The city’s portion expired this year and nobody representing the hospital has come knocking on their door to ask if the city would continue the $300,000 contribution over the next 10 years.
There’s a good reason for the uncertainty, Council members acknowledged.
In June, hospital trustees announced their intention to lease ACRH to Saint Luke’s Health System, with one potential benefit being that Saint Luke’s may assume some of the construction-related debt.
If so, the city could use that $300,000 annual gift when it comes to paying for the 54 rebuild, Council members said.
Early estimates peg the rebuild at about $8 million, with only a small fraction of financial assistance coming from the state.
“We have to put money away for 54,” Councilwoman Nancy Ford said. “We’ve got to start thinking about it.”
City officials say the rebuild should occur sooner rather than later.
With that in mind, Mayor Jon Wells said the assistance to the hospital is something the Council could consider putting “on the chopping block.”
He noted the county’s valuation has been substantially buoyed in recent years by installation of the Enbridge pipeline and construction of the Prairie Queen Wind Farm. Thus, the county is more flush with cash than the city.
“Ultimately, from my perspective (the hospital) is a county responsibility,” Wells said.
Councilwoman Kim Peterson wasn’t as eager to cut support.
“If we want the hospital to succeed, we’re going to have to help them,” she said. (Peterson’s husband, Larry, is chief financial officer at the hospital.)
While that question remains unanswered, City Administrator Sid Fleming said the city is continuing to prepare for the road project. He estimated the earliest such a project could occur is 2023.
Fleming anticipates spending $150,000 over the next two years to fund engineering costs to give the city, “a better idea of costs and when we’re going to do this project.”
FLEMING touched on several other topics during the workshop, which will continue at 6 o’clock tonight at the New Community Building in Riverside Park.
The city’s three utility funds are in varying degrees of financial stability, Fleming said.
The water fund is no longer in the red, courtesy of a rate increase last year, coupled with the Council’s decision to make a $600,000 bond payment out of the capital improvement fund instead of the water fund.
But the city must look at another rate increase eventually, or that fund will eventually go back to zero, Fleming noted.
Fleming also anticipated continuing the city’s trilateral agreement with Allen County and Iola Industries, which each entity paying $20,000 to Thrive Allen County for economic development services.
WITH USD 257 voters approving construction of a new elementary school, the city may need to look at extending services, depending on where the school is located.
All signs point to the district acquiring property east of Kentucky Street for the school.
If so, the city could pursue grants for such things as extending the Missouri Pacific Trail from Iola High School to the school site.
Road and sidewalk improvements also could be in the works, Fleming said.