After weeks of analysis and number crunching, city officials and supporters of a $4.75 million aquatic center say they now have a clearer understanding of what the proposed project’s financial impact would be for Glenwood residents.
If the bond issue passes May 6, the debt would be retired over a 20-year period, but city administrator Brian Kissel said the property tax burden on Glenwood residents would last for only seven years. Local Option Sales Tax revenue from city and county sources (currently about $365,000 annually) would cover the debt for the final 13 years, he said.
Under Kissel’s plan, the city would refinance its remaining debt on the Mills County YMCA ($1.8 million) and combine it with the aquatic center debt. Once the YMCA debt is retired in 2022, Local Option Sales Tax dollars the city takes in would be earmarked for the aquatic center debt, allowing the property tax burden to be lifted.
“There will be two loans, but it will actually be two loans in one,” Kissel said. “For seven years, we’re going to be repaying the loan on the YMCA and the aquatic center. After the seven years, the YMCA will be paid off and all we’ll have left is the aquatic center.”
Kissel said although the entire $4.75 million is being requested on the bond issue, the city has $605,000 in place that’s been put aside for recreational use. Those funds would be applied toward the debt immediately.
“That will be the city’s contribution toward the outdoor aquatic center,” Kissel said.
The financing plan also includes obtaining at least $500,000 in grants and donations, which will be a key factor in determining the financial impact on Glenwood property owners during the seven years of the aquatic center assessment.
“If the bond issue passes, the taxpayers are going to say you need to come up with some more money to decrease our burden,” Kissel said. “That’s why in this plan, we have $500,000 in grants and donations. We have to go out and get that money. That’s what I’ll be doing from now until the time construction starts.”
If the city collects that $500,000, the owner of property assessed at $100,000 would pay about $29.17 annually for seven years. The owner of property assessed at $150,000 would pay about $44.06 each year. Those figures would be higher if the $500,000 isn’t garnered.
Kissel said he doesn’t believe potential donors or charitable foundations will back away from supporting a project taxpayers have already agreed to fund in whole through a bond issue. He’s optimistic the grants and donations will come in, noting that some dollars have already been pledged. He declined to say how much.
The Local Option Sales Tax revenue is a major component of the aquatic center funding equation. Glenwood, Pacific Junction and rural Mills County voters approved a 1-cent Local Option Sales Tax in 2001 with what was then known as the Mills County Wellness Center in mind. Glenwood earmarked all its Local Option Sales Tax money to construction of the wellness center, which eventually became the Mills County YMCA. Pacific Junction also designated a portion of its new sales tax revenue to the facility. The ballot for Mills County voters called for 40 percent of its revenue from the tax to go toward general county betterment, 40 percent for property tax relief and 20 percent for infrastructure.
The YMCA debt is being paid off in part by county Local Option Sales Tax dollars, thanks to a unique agreement created in 2001 by former county supervisor Don Brantz.
Under the agreement, the county takes a portion of its 1-cent Local Option Sales Tax revenue and distributes it annually to the cities of Malvern ($12,000), Henderson ($5,000), Hastings ($5,000), Emerson ($10,000), Tabor ($4,000), Silver City ($5,000) and Pacific Junction ($10,000). However, the county contribution to each city comes with the stipulation that 50 percent of the funds must go to the wellness center (YMCA). Thus, $6,000 of the county betterment money Malvern gets each year goes to the YMCA, as does $5,000 from Emerson and Pacific Junction and $2,500 from Henderson, Hastings and Silver City. Tabor gives $2,000. The county is also kicking in $35,000 directly to the YMCA, meaning $60,000 - $65,000 of Local Option Sales Tax revenue generated outside the city limits is currently being utilized to help pay off the YMCA debt. Those same funds are being calculated into the financing plan for the aquatic center, along with the Local Option Sales Tax dollars being generated within the city limits of Glenwood, projected to be $307,000 this year. Kissel said the opening of a new Bomgaars store next fall will be a major boost to the city’s sales tax revenue.
“Nobody’s really talking about the impact Bomgaars is going to have,” Kissel said. “When you have a company that does $4 million in sales, we’re looking at a $30,000 bump each year just for them, so we’re approaching $400,000 in Local Option Sales Tax.
Mills County Auditor Carol Robertson said the county’s Local Option Sales Tax is currently generating over $600,000 in annual revenue. She said it’s the legal opinion of bonding attorneys that the aquatic center would fit under the definition of a “wellness center,” allowing the county’s Local Option Sales Tax dollars to help fund the project once the YMCA debt is retired. Robertson said the county’s 1-cent tax is in place indefinitely and can only be repealed through a special election.