Proposition 2 passes, funds go from EDC to city for street maintenance
Fri, 2016-11-11 05:00
News Staff
By LYNETTE SOWELL
Cove Leader-Press
Proposition 2 was passed by Copperas Cove voters on Tuesday night, with a margin of nearly 4-1, with 6,026 for and 1,622 against.
The measure approved 1/8-cent of every city sales tax dollar going to the city’s Street Department to fund street repairs and maintenance.
This isn’t the first solution proposed by the city to fund fixing the city’s streets. In 2013, the city first brought the concept of a transportation user fee to the city council and used the city of Bryan as an example.
That city’s fee is a $3 per month charge to city utility bills. The fee goes toward street maintenance. However, the council wanted to look into that further and didn’t go forward with it at that time.
The transportation user fee was again brought to the council during discussion for the 2015-2016 fiscal year budget, and at that time a $3 fee charged to the city’s approximately 13,474 utility customers would bring in an estimated gross annual revenue of $485,064, to be divided equally for street repair, reconstruction, and sidewalks. However, the fee was not approved by council for inclusion on the city’s fee schedule.
Then in 2015, the Texas legislature approved House Bill 157, which provides cities with more flexibility in using sales tax funds for economic development, such as holding elections to adopt dedicated sales tax for items like street maintenance, property tax relief, and EDC sales tax.
Now, the city stands to receive what could amount to an estimated $400,000 annually via Tuesday’s voter-approved action.
One-eighth-cent of city sales tax revenue will be taken from the ½-cent city sales tax revenue that goes to fund the Copperas Cove Economic Development Corporation, with that funding initially approved by Copperas Cove voters in 2001.
In anticipation of this possible outcome from voters, the EDC constructed its budget utilizing 3/8-cent sales tax revenue instead of the ½-cent it has received since first being formed in 2001.
The 25 percent reduction in funding, lowers the EDC’s projected sales tax revenue for fiscal year 2017 from $1,470,000 to $1,128,000.
However, with this reduction in budget, the EDC has an ending fund balance of $1,403,626 toward the next fiscal year’s budget. The EDC also has $2,000,000 in reserve for the future land swap with Fort Hood and this year’s budget still includes funds for the EDC’s contribution to the Avenue D sidewalk project.
At the time of the EDC’s budget presentation on June 21, Monica MacKay, the EDC’s interim executive director, said the 25 percent cut would enable the EDC to maintain its current staff and could use reserves to make up the difference. In that presentation, the written overview stated the EDC would have no funds to assist the city with other projects, and it would have little funds to respond to economic development opportunities and little ability to build up reserves.
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