McAlester News-Capital, McAlester, OK

March 16, 2013

Update: City Council

By James Beaty
Senior Editor

McALESTER — City councilors passed two measures Tuesday night that will result in city voters going to the polls again to either accept or reject a “change of purpose” of an existing 1 percent city sales tax — but there’s nothing in the new ballot language mandating that the money be used only for road and street projects.

Mayor Steve Harrison said Wednesday that’s not necessary because the street improvement language had been covered in another proposition passed by voters last November. City councilors voted unanimously during their regular Tuesday night meeting in the council chambers at City Hall to pass the two measures related to a special election.

The first item passed Tuesday night related to an ordinance stating the measure, if passed by voters, would “replace and supersede” a 1 percent sales tax currently being levied by the city.

On the second agenda item, city councilors passed a resolution calling for a May 14 election on the issue. Last November, city officials including City Manager Pete Stasiak and Harrison said the money gained by replacing or re-purposing the 1 cent tax would be used strictly for road and street projects.

A measure to allow the city to refinance the original bond package at a lower interest rate did pass last November, but a second proposition asking voters to re-purpose the tax failed.

On Tuesday night, the city’s bond finance adviser Jon Wolff addressed the council prior to the vote on the ballot language. Ward 1 Councilor Weldon Smith asked Wolff to stress that if voters pass the measure in the upcoming election, there would be no new sales tax and no extension of an existing sales tax. “This is not a new tax.

This is changing the purpose of an existing sales tax,” Wolff said. Following a brief discussion, all of the council voted to pass the two measures, with the exception of Ward 5 Councilor Buddy Garvin, who was not present.

After Wolff left the meeting, the News-Capital spoke to him in the lobby of City Hall. The News-Capital noted that neither the ballot language passed Tuesday night nor an accompanying ordinance said anything about restricting the “re-purposed” money to road and street projects.

Wolff said that was correct. “The intent is to use it for road projects,” Wolff said. Regardless of the intent of some or all of the current city council, could the city legally spend the money for any type of capital outlay if voters pass the measure with the ballot language approved Tuesday night? “They could legally use it for anything,” Wolff confirmed, referring to capital expenditures.

After the story was posted online, Mayor Harrison contacted the News-Capital. Harrison said there had been no need to use ballot language regarding road and street improvements in the ballot language approved by the city council Tuesday night and which will be presented to voters in May.

The mayor said that’s because that language had been included in Proposition 1 which voters passed last November. The mayor said the money resulting from passage of the measure could only be used for things approved by the voters in McAlester.

Meanwhile, the ballot language approved by the city council Tuesday night to go before voters in May reads: “Shall Ordinance No, 2453 of the city of McAlester Oklahoma (The ‘City”) be approved, which ordinance does not increase or extend the term of a sales tax, but does modify the purpose of an existing 1 percent sales tax currently being levied by the city, to allow the tax to be used to pay debt service on obligations herettofore or hereafter approved by the voters of the city; all as more specifically set out in Ordinance 2453 of said city?” Voters are then given an option of voting “yes” for the proposition, or “no” to vote against it.

Harrison said the “heretofore approved” phrase refers to Proposition 1 passed by McAlester voters last November. That phrase authorized the city to incur indebtedness to “all for the purpose of achieving debt service savings ... not to exceed $13,800,000 to be used to fund street improvements as well as related infrastructure improvements within the project areas ...” according to the ballot language. Harrison maintained Wednesday that covered the street improvement issue.

“That’s all the voters have ‘heretofore” approved for debt,” Harrison said — referring to the “heretofore” phrase in the ballot language approved Tuesday night. “We can’t do anything other than fix the streets.”

Harrison said there’s a reason the ballots were written they way they were. Since the tax is set to run for 18 years, assume that in 10 years the city is in a position to borrow some more money under that particular bond issue, he said.

Speaking of future city leaders, Harrison said “They would only have to go to the voters and borrow some more without having to re-purpose the sales tax.”

He said voter approval would still be required. Harrison was asked why the council didn’t include a reference to street improvements on the ballot voters will see in May — even if it wasn’t legally required? Harrison said there was no need.

You don’t ask the voters to approve the same thing twice, he said.

Contact James Beaty at jbeaty@mcalesternews.com.

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