Commissioners send sales tax question to the county voters

By a vote of 2-1, the Marion County commissioners will have voters decide if using sales tax to finance the transfer station project is the way to go during the July 29 meeting.

Commission chairman Kent Becker cast the dissenting vote, opting instead for a lease/purchase agreement.

The discussion was prompted by Scott Loyd with Swindoll, Janzen, Hawk and Loyd, who advises the county on budget matters, asking them how they wanted to proceed. It was also decided to keep the mill levy the same as 2019 at 74.237 mills, but because of the assessed valuation is higher, the county will have about $280,000 more to work with.

“I think if (the transfer station financing) goes to a vote and fails,” Becker said, “the lenders would look at that and decide they aren’t going to do it or if they do approve (a lease/purchase), the county’s rates will go up 2 percent.”

Commissioner Randy Dallke said he was in favor of the sales tax option citing the county jail as a good example of how well it worked.

Becker said he favored the lease/purchase option because it’s about a seven- to 10-year commitment for making payments.

“It’s still in the ‘right environment,’ and property taxes will fund this option,” he said. “I think we can handle it that way. I do understand where (Dallke) is coming from.”

One question Becker posed regarding out-of-county people, and how much they contributed to the additional sales tax, but nobody had that answer readily available.

Commissioner Dianne Novak said she would prefer paying for $1.5 million or thereabouts from the reserve funds.

“I think we should borrow from ourselves,” she said. “It’s the smartest thing we can do.”

Both Dallke and Becker stated they were concerned about the county reserves, and using Novak’s method, those funds could dwindle from six months down to two or three months.

“Does the lease/purchase have to be for 10, 15 or 20 years?” Novak asked. “It’s a lot of (interest) money going down the tubes.”

Dallke considered a compromise with Novak by having a combination of sales tax money, and money generated from the transfer station as revenue totaling about $120,000.

County clerk Tina Spencer said she would need to look into the wording of the question on the ballot, but said there might be two questions associated with the transfer station question.

“One would be to pay with taxes, and the second whether or not to issue the debt and implement the sales tax,” she said.

Novak also asked what the debt ratio is, but Loyd said he didn’t know the actual percentage; however, he did say that based on the current loans outstanding, the county could borrow between $4 million and $4.5 million.

Dallke said he also believes the debt is dropping with the Tampa Road project close to being paid off at $200,000 for 10 years. And the county paid 330th off going west to Roxbury using money from the cash reserve.

“I just don’t want to cut the reserves too much,” he said. “It’s no different than personal income and having six months reserve in case someone is laid off or sick.”

Becker said: “If we start paying for this stuff in cash, our reserve will drop, and this county isn’t leveraged.”

Novak said she takes her cue from Dave Ramsey, best-selling author and financial advisor, who advocates a disciplined approach to personal and household finances, including the strict management of debt.

“If an emergency comes up, I still believe Ramsey is right in saying people can’t finance themselves out of debt,” she said.

Loyd said government business is a bit different than others in that governments can’t get a line of credit, but they can, just like at home, have reserve monies.

“We are in good shape debt-wise,” Loyd said.

If the sales tax fails to be approved by the taxpayers, he said, the county can still go with Novak’s option or can go with Becker’s lease/purchase option.

Dallke said that with the question on the November ballot, everything will be on hold for three to four months until the voters have had a chance to decide. But, Spencer added the commission could still put out for bids, just not commit the funds until the “way” is figured out.

Becker said he is concerned that if at the end of the two or three months the sales tax option is defeated, the lease/purchase won’t be as attractive to lenders.

Dallke asked: “Why?”

“Your county is not as solid as you think it is, and here’s the reason,” Loyd said. “It’s called non-appropriation clause, and say one year into the lease/purchase agreement the county doesn’t have the funds to continue paying for it out of cash and the tax lid on.

“What (Becker) is saying is more from a banker’s world, but from a government world, that non-appropriation clause allows the county to walk away from (in this case) the trash,” he said. “Getting rid of your trash isn’t going to happen, but the rate could go up, and banks look at the risk.”

Loyd said he couldn’t imagine a bank running the trash department, but Becker said he has seen a bank with a livestock sale commission for three years, noting it could be possible.

“One time I saw in a little town a John Deere tractor that was turned back in,” Loyd said. “They couldn’t make the payments, so it does create more risk.”

The main reason Novak said she was willing to go along with Dallke and pose the question of sales tax to fund the transfer station was because someone had to give in.

“Personally, I am not in favor of borrowing money,” Novak said. “Saving money and having (too much) cash reserve in order to finance, finance, finance, could mean we end up cash broke.”

Another issue in the 2020 budget, Loyd said, was the fire and police radios and funding $95,000 toward payment of that equipment for the next budget year. The commission agreed to put the money back in the budget.

The commission also agreed to put $100,000 toward an ambulance building in Hillsboro. Other areas of the budget were expected to continue July 29, but because of the press deadline, that information will appear in the next issue.

Written By
More from Patty Decker
KBI still investigating Lehigh shooting incident
Robb Stewart, 50, was shot and killed at his home in Lehigh...
Read More