The 2020 Capital Improvements Program would make part of its sales tax component “indefinite,” under the terms of the ballot proposition that voters will consider and the ordinance that sets out the terms of that program.
Voters will decide on what city leaders dubbed PROPEL, the 2020 CIP, on Feb. 11. That proposal would end the 2015 Sales Tax Extension and 2016 CIP on March 31, carrying its combined 2.125 percent sales tax forward on April 1 through Dec. 31, 2034, to pay for projects left in the old programs as well as a new set of projects. The tax would remain unchanged, meaning the total sales tax charged in Lawton would stay at 9 percent.
But, unlike past CIPs and their sales tax, one-half percent of the 2.125 percent total would be for “an indefinite period.” That means one-half percent could continue after the remainder of the tax expires in December 2034. It is similar to the 2 percent permanent sales tax, long in effect, that funds city operations.
That operational sales tax is permanent; this one-half percent is designated “indefinite,” city administrators said.
Deputy City Manager Bart Hadley said the wording was deliberately chosen by attorneys, who said that language gives the city the option of making that half-percent sales tax permanent (as the 2 percent operations sales tax is) or ending it (as any other CIP tax does).
The ordinance that sets the guidelines for the 2020 CIP — approved by the City Council in December and effective only if voters approve the CIP proposal — specifies three categories that indefinite tax will fund: $2.864 million in annual costs for police and fire salaries and incentives; a $250,000 annual allocation to the city’s emergency fund; and funding for waterline and sewer line improvements.
Some of those expenditures are a nod to existing sales tax programs.
Hadley said the 2015 program (which also is funding the new public safety facility) allocated money to provide incentives to existing police officers and firefighters, and increase starting salaries. The net result: that sales tax allowed the City of Lawton to increase what had been a starting police salary of $31,000 to about $42,000, while paying for incentives to reward officers and firefighters who choose to stay with the City of Lawton. It also added new personnel to both departments.
The catch: the sales tax funding those expenditures is temporary. Without a plan to find a funding source once that temporary tax expires — the half-percent indefinite component of the 2020 CIP — what happens?
“Do we amend the pay plan? Cut employees that we have added? Lay people off?” Hadley said.
The emergency fund provision allows the city to address an economic reality: sometimes costly emergencies arise and the city must have a way to pay for them. An existing CIP designates surplus funds (meaning, sales tax revenue that comes in over projections) to the emergency fund, but the 2020 CIP sets a specific annual allocation.
The proposal ties into one of City Manager Michael Cleghorn’s stated goals when he became city manager in 2018: increasing Lawton’s emergency fund to equate to at least 10 percent of its annual operating budget.
“Ten to 14 percent is a good amount,” Cleghorn said, of a “cushion” that other Oklahoma cities have built into their operating budgets.
The 2020 CIP would allow the city to rely on a specific allocation, rather than depending on left over money that may or may not be available.
Funding for water and sewer lines addresses a reality the City of Lawton has addressed in every past CIP and tries to address annually through its Public Works operating budgets. Public Works Director Larry Wolcott and City Engineer George Hennessee said that in addition to age, Lawton faces unique challenges with its infrastructure because of the clay soil that Cleghorn said can shift from 3 to 12 inches, depending on whether it is excessively dry or wet.
“You can’t put enough money in the operating budget,” said Hadley, of the funding needed to make a difference in addressing water and sewer problems.
Coming Sunday: Finishing projects in the 2015 and 2016 sales tax programs