Highland News Leader

New public safety options may change sales tax outcome

The Square in Highland.
The Square in Highland. mbraa@bnd.com

The Highland City Council has been presented with new, cheaper options for upgrades to city’s public safety facilities as council members also ponder whether or not to implement a new sale tax to pay for them.

“There are a lot of ways to skin this cat,” Police Chief Terry Bell told the council during a special meeting on Oct. 30.

For the past several months, the council has been deliberating whether or not to create three new business districts in the city. Within those areas, the city could implement an additional sales tax of up to 1 percent for the next 23 years, without voter approval, in order to pay for needs of the police, fire and EMS departments.

If the city were to levy the full 1 percent sales tax, it is estimated it could bring an extra $1 million a year into the city’s coffers. However, the city’s original plan to create a new public safety building that would encompass all three departments was deemed to be too expensive, even with $1 million a year in new revenue.

The city received push-back from some retail businesses in town that said an extra 1 percent sales tax would put them at a competitive disadvantage — not only from neighboring communities with lower taxes, but online retailers, who have been putting the squeeze on brick-and-mortar stores across the country.

With those things in mind, the public safety officials went back to the drawing board, Bell said. Leaning on the expertise of local builders The Korte Company and Plocher Construction, they brainstormed alternatives that might not require a full 1 percent sales tax to fund.

“Obviously, we are very mindful at trying to control costs on this,” Bell said.

Option 1

The first option was to do nothing in regards to creating the business districts and implementing any new taxes.

This would mean public safety needs would just have to be met as funds became available. In this case, Bell said the department would be subject to increased liability as building repairs and equipment replacement would have to be kicked down the road. During that time, costs would also rise, Bell said.

“There is a total that just keeps scrolling here as we are talking,” he said.

Option 2

Renovating the current police department, located at 820 Mulberry St., as well as Fire Station No. 1., located at 1115 Broadway, is another option.

Renovations at the fire station would be:

▪ Adding two floors to rear of the building.

▪ Addressing the collapsing wall at the rear of the building.

▪ Adding an elevator and addressing other American with Disabilities Act requirements.

▪ Expanding the front of the building to hold all equipment, vehicles and machinery.

▪ Redesigning the floor plan for more space to move command staff and supervisors back into the building.

Renovations at the police department:

▪ Expand the front of the building out to the sidewalk.

▪ Creating a lobby with an elevator to the basement, which is where the public restrooms are currently located, and where the witness interview would be relocated.

▪ Add an enclosed sally port, a sixth garage bay and covered outdoor storage.

▪ Addressing all ADA and security issues.

▪ Redesigning workspace layout and adding locker rooms to the basement.

The combined estimated renovation cost for both facilities would be at least $4.6 million, according to Bell.

“That gets us to meeting our needs as we sit and breathe here today,” Bell said.

But while this plan would help to meet current needs, it would not be able to accommodate future growth, Bell said. It would also leave the police department in a residential neighborhood, which is a safety hazard and part of the reason why the department is seeking a new location, Bell said.

Mayor Joe Michaelis said renovating the police department would be a mistake, adding the building should have never been built in a residential area.

“I think you are really heading the wrong way even remotely considering renovating it,” Michaelis said.

Option 3

The third option looks at scaling back renovations on Fire Station No. 1 to meet current EMS needs and relocating the police, fire department and remaining EMS to existing structures within the city.

Scaled back renovations to Fire Station No. 1 would include:

▪ Renovations to accommodate current EMS operations.

▪ Adding a single story to the rear of the building.

▪ Redesigning the floor plan to maximize work space.

▪ Addressing ADA issues through remodel and addition of an elevator or lift.

The remaining needs of the EMS, Fire Department and Police Department would then be filled by using purchasing existing private buildings. Bell said the department has looked at several structures generally good locations. Renovating these structures could also address both current and future department needs, Bell said. Generally, remodeling is also cheaper than custom construction, he said.

Bell said the estimated cost of Option 3 is $5-5.5 million.

But the plan still has risks.

The cost estimate did not include the actual purchase price, just revocations, and those estimate could go up in any unforeseen issues occur, which is not uncommon when renovating.

Finally, Bell mentioned that taking private properties off of the tax rolls could have a negative impact on revenue.

Option 4

The last plan would include the same scaled back renovation of Fire Station No. l as Option 3. However, instead of using existing buildings, the city could build a bare-bone structure(s) on city-owned property. Estimated cost: $4.9-5.5 million.

Bell said this option would cover all current and future concerns for fire, police and EMS. He said this option would also give the city more control over the layout and would not impact on the city’s tax basis.

Risks Bell outlined included that staff would have to be more involved with the structure’s construction, and basic construction is not as aesthetically pleasing and the estimate does not include the cost needed to run utilities and build access roads.

What does the council think?

The council members agreed during the meeting that the public safety need has to be met.

“I think we need to push forward and encourage it,” said Councilman Rick Frey. “How we are going to do it is debatable.”

Bell said his preferred route would be either Option 3 or 4, which require approximately $600,000 a year for 20 years.

City Manager Mark Latham said that the city would need to implement at least  1/2 -cent sales tax using the business district plan to generate that kind of money. As for other methods of funding public safety, Latham said during the meeting that the city is still basically out of options. He said the only other viable option is that the city could hold out and hope that its TIF district starts preforming.

Latham also said that the council should not be afraid to put the tax up to a referendum.

“A lot of people will come out and support it,” Latham said.

However, some council members said they were still hesitant about a public vote.

“These are things you can’t do without. These are things you have to the do for the city,” Frey said.

Frey said he had reservations about approving a full 1 percent sales tax, a  1/2 percent was palatable.

Councilwoman Peggy Bellm echoed Frey.

“For my part, I can see that there is a need, and we have to come up with it, somehow,” she said.

Bellm also said that the council should consider approving the districts without implementing a tax, so the money creating the districts did not go to waste. By law, the city must vote to implement the districts within 90 days of the public hearing, which was held to discuss the business district plan. Otherwise, the city would have to pay for another study to reaffirm the plan, if a future council decided to pursue the idea further.

Coucilman Aaron Schwarz said a sales tax was a good funding source, because people from other communities would also be paying it. However, Schwarz said he still disagrees with the boundaries of the districts.

“I don’t want to levy a tax that would help to make our community uncompetitive,” Schwarz said.

Schwarz said he was in favor of redrawing the district boundaries to not include specific businesses that would be affected more by the tax. However, to do that, the city pay for another study. The first one cost over $40,000.

Frey and Bellm said eliminating businesses could to get messy.

Schwarz also said he was a little skeptical about the pricing of some of the options, saying he thought they would be more expensive.

Councilman Neill Nicolaides said that the tax might encourage business owners to open shop outside of the district boundaries. Speaking as a business owner himself, Nicolaides, who own Compustitch Embroidery, said he would not want to open business in a district where his customer had to pay higher taxes. Otherwise, Nicolaides declined to comment.

Up Next

The creation of the three business districts will be on the agenda for the next council meeting on Nov. 6.

During that meeting, the council will have to decide:

▪ which districts to approve.

▪ whether or not to implement a tax, and

▪ if a tax is approved, at what amount. The council could choose to create the districts without a tax, but that will start the 23-year timer on the districts, decreasing the amount of potential money the city could get.

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