Friday, Jun. 22, 2012
Public hearing held for budget amendments
By Bethany Bashioum
Treasurer Steve Cheslik presented two budget amendment proposals to the Cass County Commissioners for discussion during a public hearing June 18.
The budget items were in regards to the County’s Economic Activity Tax and Tax Increment Financing obligations and in lieu of the Road and Bridge budget due to the sale of two county motor graders.
“As part of an incentive to bring developers in, the city and the county agrees to paying some of the taxes they would have collected, and paying it back to that TIF area to help with some of their bills,” Cheslik said. “Long story short, we started paying on these EATs about 10 years ago. We just paid out of general revenue because it wasn’t very much money.”
Cheslik said that as the county received more TIFs and the sales tax in the county grew, the county is paying as much as $675,000 in EATs taxes.
He said the county is still drawing funds for the obligation from general revenue, although some of the taxes that are being taxed in the TIF areas are for the quarter-cent Road and Bridge tax and the quarter-cent Justice Center tax.
“What we looked at is they should be paying their share of their EATs portion,” Cheslik said, of the sales taxes.
To make up for this loss, Cheslik asked Commissioners to add an expense line, in the amount of $90,000, which would represent approximately two-thirds of the total portion of sales taxes collected from the quarter-cent Road and Bridge tax. To meet the obligation, the county would decrease the amount that it transfers to the bond debt service.
“That does mean we’ll have $90,000 less each year going to bond debt services, which over the course of the life of the bonds and the life of the tax, which voters approved until 2026, we’d be talking about $1.5 million dollars,” Cheslik said. “In the big picture, we’ve already committed to two, $10.0 million bonds, with interest that’s actually a little over $28 million dollars that we’re going to have to use that tax on to pay the bonds on. The voters approved $34.5 million of the bonds and that’s kind of the total net tax money that was estimated to get over that life.”
Cheslik assured Commissioners that they’ll need to keep an eye on their balances and be confident that they can make the payments on their bond debt services as the years go by.
“I think we’ll be find, we just have to be careful if we add any more down the road,” he said.
Cheslik is also suggesting an additional $45,000 to be shifted from one budget line to another expense line in the budget to make up for the city’s portion of the tax, for a total of $135,000.
A second amendment was presented to Commissioners to increase the Road and Bridge’s miscellaneous budget revenue line by $376,590 – the amount of funds acquired in selling two county motor grader that werent being used.
Cheslik said that it is the desire of the county to use the funds to pay off the loan that was originally taken out to purchase the graders from Commerce Bank.
No public comment was made on either discussion.