Published: March 15, 2008 11:17 pm      

City explores property tax hike

Edmond voters to decide this summer on approval of new ad valorem for police station

EDMOND — Edmond homeowner Cathy McKinney agrees that a new police station is needed in Edmond. However, she would like the funding for the Public Safety Center linked to a temporary sales tax and not a property tax.

“Our property taxes are high enough,” McKinney said.

But Edmond City Manager Larry Stevens believes the time is appropriate for the City of Edmond to consider ad valorem funding for the Public Safety Center.

“We need to make our case to the voters and demonstrate why it’s a good idea. I feel comfortable we can do that,” Stevens said.

The Public Safety Center would house the Edmond Police Department, the Central Communications Department and the Emergency Management Department.

The current police station, at 23 E. First St., was deemed inadequate due to its configuration and limited space after a 2005 needs assessment study. The City Council has agreed on a building close to 90,000 square feet for the proposed $30 million Public Safety Center.

The city’s proposed ad valorem tax will go to a vote of the people on July 29 or Aug. 26.

Stevens said he has been discussing diversifying the city’s revenue stream with the City Council for a couple of years.

“We have an over-reliance of the sales tax,” Stevens said. “And right now, that’s even more acute because our sales tax numbers are not coming in as we projected.”

The city’s sales tax revenues have increased 4.3 percent since a year ago, but the city’s current budget was based on a projected 7 percent increase.

Funding the Public Safety Center with the 3/4-cent permanent sales tax that Edmond voters approved in 2000 has never been discussed with the Capital Projects Financing Task Force, Stevens said. The Capital Projects Financing Task Force is a group of Edmond residents appointed by the Edmond City Council.

There was a specific list of initial projects included in the 3/4-cent permanent sales tax. Stevens said several projects have been added to that list in time basically because revenue has come in higher than anticipated.

Funding the Public Safety Center does not does not fall into the parameters of the Capital Projects Financing Task Force, Stevens said. “We’re looking at a project in the neighborhood of $30 million. Most of the money that remains in that fund — they’ve been allocated to other projects,” Stevens said.

Stevens’ office conducted an informal survey and found at least 12 other cities in Oklahoma with an established property tax mil levy for capital projects.

The City of Edmond has a large list of unfunded capital items for the next 20 years. “We’re about out of the window for our 2000 sales tax because we’ve been issuing bonds to fund those projects and we hope we can get by for the next ...five years with some capital funding. But beyond that, the bonds we issued on that don’t start retiring until 2021.”

A 10- to 12-year revenue source gap for significant long-term capital needs exists for the city, Stevens said. So the recommendation from the finance subcommittee presented by City Treasurer Stephen Schaus recommends that ad valorem funding be used to fund the Public Safety Center.

The Edmond City Council has not chosen a location for the new police station, but is considering 11 locations downtown or the Barnett Field site at Kelly and Main. Whether the bond will be set for five or 10 years by the City Council depends on the sales price of the location to be determined, Schaus said.

“What we’d like to do is keep the millage that would be associated with this bond to be essentially not more than 10 mils,” he said.

Setting the bond for five years will increase the property tax of a $100,000 home by $114 a year or $76 a year if the bond lasts for 10 years, Schaus said. The median price of a home in Edmond is $234,000. “So that would increase on a median-size home about $179 a year (for 10 years),” Schaus said.

Edmond homebuilder Caleb McCaleb said the proposed ad valorem tax for the Public Safety Center could have a negative impact on Edmond’s real estate market.

“Here’s my biggest concern; it’s not one group wanting to add to the property tax but now Oklahoma County Commissioners are voting to buy the GM plant for Tinker Air Force Base,” McCaleb said.

Oklahoma County Commissioners are setting a May 13 election for the $83.5 million bond issue.

“When you have multiple things like that starting to add up — not only does it affect property values but it affects people’s pocket books and check books. I think there’s better ways to raise money than going to the ad valorem tax,” McCaleb said.

Janet Yowell, executive director of the Edmond Economic Development Authority, said she expects the proposed property tax would have little effect on local real estate sales.

Stevens said he informally discussed the general obligation bond with Edmond Public Schools Superintendent David Goin in January. The meeting also including school board president George Cohlmia, past board president Jamie Underwood, Mayor Dan O’Neil and Schaus.

The school district has not formally endorsed the ad valorem tax, but Stevens was encouraged by their meeting.

“We certainly understand the school district’s sensitivity to property tax and we don’t want to do anything — and I’m sure the city wouldn’t do anything that would hurt the school district,” Stevens said.

Goin said property taxes are the school district’s sole means of generating local tax support for public schools.

“We recognize the city faces infrastructure needs that affect quality of life and respect the right of the council to seek voter approval for ad valorem funded (General Obligation) bonds to address specific issues,” Goin said. “If approved the tax assessments would be independent of school property tax funding. Again, though, we appreciate the city’s historically minimal and planned limited use of this funding mechanism.”

Schaus expects the city’s election could be pushed back to early fall.

“I think that would be wise,” Schaus said. “This will be the first obligation bond Edmond has put forth I think since I’ve been city treasurer. And I’ve been city treasurer for almost 18 years.

“We want to make sure we do it right with the best project, the best timing, the best price, the best location so everybody gets behind it.”



THE DETAILS

WHAT YOU NEED TO KNOW

What will Edmond homeowners pay?

If voters approve a property tax increase to build the proposed $30 million Public Safety Center, here’s how it affects their pocket books:

If it’s a five-year bond package: $114 a year increase to a $100,000 home.

If it’s a 10-year bond package: $76 a year increase to a $100,000 home.

The median price of a home in Edmond is $234,000. That equals a $179 increase a year on a 10-year bond proposal.

Source: stephen schaus, EDMOND CITY TREASURER



jcoburn@edmondsun.com | 341-2121, ext. 114