2021 Sales Tax Question Dedicated for Street Repair
Beginning in April of 2020, City administration began asking the question “If you were king/queen for a day, what would be the first thing you’d do?” Nearly every person responded with at least one, but usually two or three, of the same five repeating goals. The list below is the result of countless conversations with residents, members of City Council, stakeholder groups, visitors, and community partners (like local business owners, teachers, church groups, and more).
Our Top Five Goals are:
- Clean Up the Community
- Repair and Maintain Streets
- Economic Development
- Housing of All Types
We’ve had amazing progress with Goal #1 and are happy to see property being well-maintained and improved across the community, especially with all the new housing builds that have popped up in the last several months.
Now that we’re in “maintenance mode” with Goal #1, we’d like to start focusing on Goal #2 – Repairing and Maintaining Streets.
At the regular meeting of City Council on August 26th, 2021, the governing body passed two resolutions related to the budgetary policies of the City of Osawatomie that both focused on dedicated revenues for street repairs, replacement, and maintenance.
Resolution 908 established an increase in mill rate in the General Fund from the Revenue Neutral Rate (RNR) of 27.669 to 44.433. This increase in mill rate will generate $450,000 annually that will be strictly dedicated to street repairs, replacement, and maintenance. Resolution 908A approved a one-half of one percent sales tax increase to be added to the November 2021 ballot for the citizens of Osawatomie to vote upon, which, if passed, would add an additional estimated $125,000 to the street repair fund each year.
These two initiatives, when coupled with the $1,000,000 we receive over the next ten years from the Miami County Sales Tax and another estimated $2,000,000 in grants from the state and federal level, allows us to generate $8,750,000 dedicated solely to streets over the next 10 years.
HOWEVER, Paving the Way goes beyond that and strives for 10 years of street projects in just three to five years. Because of our need to also replace both our water distribution and wastewater collection systems, we can use “economies of scale” and get much more done with street repair in a shorter amount of time than we could continuing the piecemeal approach we’ve been following for the last several years. Administration estimates that we could get an additional 20% done if we then bundle this into a bond issue and cut down the cost of construction inflation in future years.
An influx of available grant dollars coming down from the state and federal level from newly passed infrastructure bills means there has never been a better time to do utility projects than now. Because so many of our utility lines are underneath sidewalks and streets, we are able to marry together (and save money) both utility projects and street repairs and avoid churning up newly redone streets and sidewalks later on.
Q: How many miles of streets does the City have to take care of?
A: The City of Osawatomie has approximately 318 blocks that need to be maintained. Regular street maintenance ranges from simple pothole patching and crack-sealing or preventative sealing treatments like PROSEAL, to mill and overlay projects, to full reconstruction where the street is removed and replaced in its entirety. Street maintenance also includes curbs, gutters, and sidewalk replacement where needed.
Q: How much revenue will this sales tax generate?
A: The one-half of one percent street sales tax will generate approximately $125,000 annually to be dedicated to street, curb, gutter, and sidewalk maintenance programs.
Q: What other sources of money does the City use to pay for street maintenance?
A: The City is dedicating 16.764 mills of our annual property tax collection ($450,000 annually) to street maintenance beginning in 2022. Additionally, the City receives approximately $500,000 every five years from Miami County Sales Tax for use in road projects. When combined with the proposed dedicated street sales tax, these funds are also used to leverage federal, state and county grant funds, stretching our dollars even further and saving the community substantial amounts of money in the long-term.
City administration put together the table below to demonstrate how the increase in mill rate impacts residential and commercial owners in Osawatomie.
Q: Are there restrictions on how these revenues can be used?
A: If approved, the portion of the total sales tax allocated for streets is set aside and accounted for separate from other City revenues. They may only be used to pay for improvements outlined in the ballot language, including streets and other components of the City’s transportation network. The funds may only be used for capital expenses including debt service for larger projects and may not be used to pay for annual operating expenses such as personnel.
Q: How do I know when my street is scheduled for work?
A: The City has completed a street condition inventory for the entire City, and given conditional ratings to every street. From this inventory, staff has identified a priority list for years 2022 – 2027 based upon condition, arterial designation, and other circumstances. This inventory, along with the projected date of each street project, is detailed in the assessment shown here. The plan is reviewed annually, and streets may be moved forward or backward depending on a continued assessment of condition.
It is important to remember that this investment in street infrastructure is continuous, and the City’s overall maintenance strategy in our community is to tackle the “worst first” and to benefit the greatest number of people, businesses, and visitors.
We’ve created an interactive map that highlights planned 2021 projects, anticipated projects for 2022, and what type of project is planned (sealcoat, mill and overlay, or total replacement). Click here to open the map in a new tab and explore the plans!
Check back soon for project details for 2023 – 2027!
The BALLOT LANGUAGE
“Shall the City of Osawatomie levy a special purpose retailers’ sales tax in the amount of one-half of one percent (0.5%) to take effect on January 1, 2022 and to be levied for ten years until December 31, 2031, on retail sales consummated within the city of Osawatomie; the proceeds of which shall be used to pay for, in whole or in part with any other funds the cost of repairing, rebuilding, rehabilitating, upgrading and improving streets, sidewalks and all related street infrastructure and any short- or long-term financing required?”
Q: What does a “yes” vote mean?
A: If approved, the City will be able to better fund and perform critical street maintenance using the money generated each year by this dedicated street sales tax.
Q: What happens if the ballot measure is not approved?
A: City services are generally funded by either property taxes, sales taxes or user fees. If voters elect not to approve this sales tax, the City’s ability to take on crucial street projects would be very limited.
The sales tax is expected to generate approximately 21% of the total proposed revenues currently estimated to be dedicated to street maintenance projects.
Existing Sales Tax
K.S.A. 12-187 et set., as amended, (the “Sales Tax Act”) authorizes the Governing Body to submit to electors of the City the question of imposing Citywide retailers’ sales taxes, which may be in an amount not to exceed two percent (2%) for general purposes and in an additional amount not to exceed one percent (1%) for special purposes, provided sales taxes for special purposes shall expire ten (10) years from the initial date of collection thereof.
The electors of the City previously approved propositions to authorize the levy of the Citywide retailers’ sales taxes in the amount of one percent (1%) for general purpose and one-quarter of one percent (0.25%) for eight years for the special purpose of purchasing and installation of equipment for the City’s fire and police operations, and the purchase and installation of any new, replacement or updated computer software for the City’s fire, police and municipal court operations.
PROGAM UPDATES AND EVENTS:
- Town Hall Q+A Sessions Planned – September 22nd and October 5th, from 3:00pm – 7:00pm at 545 Main Street