City Council waiting to see whether it can spend sales tax on street repair
By GARY KENT
Bee-Picayune staff
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posted Aug. 13 -
City Council members will have to wait for bond investors and the Economic Improvement Corporation board to approve changes in the way the city’s half-cent sales tax is to be used before the city can call an election that could give voters the opportunity to approve using some of that money for street maintenance.
City Manager Ford Patton told the council Tuesday evening that bonds sold back in 2006 are being repaid using 4B sales tax revenues.
That bond issue was for $885,000 and the money was given to the Bee Development Authority to help pay for improvements to two hangars to accommodate the Sikorsky Support Services operation after the company landed a contract to refurbish Black Hawk helicopters for the U.S. Army.
Sikorsky eventually lost that contract but the company has acquired a new lease on the hangars and has reorganized its operation at the Chase Field Industrial Airport Complex.
Investors who purchased the bonds were assured money derived from that tax would be used to repay them.
Patton said Beeville is not alone in considering changing the way some of that half-cent tax is used. About 150 cities across the state already have taken similar action, creating a street maintenance fund using a portion of the half-cent tax.
The city manager said he expects the bond holders to provide that approval. Then, he said, the matter has to go to the Economic Improvement Corporation board for its approval.
When asked how much of the approximately $800,000 a year the city collects from the tax would be channeled into the street maintenance fund, Patton said it would be no more than one quarter of the amount, or one eighth of the four eighths that make up the half-cent tax.
“The city has pledged sales tax revenues to sell the bonds and the rate was a half cent when the bonds were sold,” Patton explained.
The city manager explained Wednesday morning that the city will have its only other bond issue funded by 4B sales funds paid off on Friday. He said a payment of $296,815 will be made on Aug. 15, which will retire a $1,135,000 bond issue sold back in 1999 to finance the construction of a new wastewater treatment plant at Chase Field.
By the time any changes can be considered in the way the 4B taxes are divided up, the bond issue for the Sikorsky project will be the only outstanding debt for which the city is using those funds for repayment.
When councilmen asked about the possibility of putting two eights of the half cent tax toward street maintenance, Patton said he had been advised not to attempt that. He said those he contacted about changing the way the tax is used recommended keeping the portion of tax money designated for street maintenance at one eighth of the four eights the city collects.
Mayor Kenneth Chesshir asked Patton to explain again how often the city’s voters would be asked to re-authorize the way 4B sales tax proceeds are used and Patton said that would come up every four years.
Street maintenance was one of the projects for which the half-cent tax was used right after voters here approved it in the early 1990s. Patton and the council sold the tax to voters by saying the money could be used for infrastructure improvements and maintenance and for a number of years most of the money was used that way.
Over the years, however, the Texas Legislature has made changes in the way the taxes can be used and it has been a number of years since any of the 4B sales tax funds were used to maintain city streets.
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