Serving the community since 1867
109 W. Fourth St. - P.O. Box 311 - Holton, Kansas 66436 - 785-364-3141
The half-percent sales tax increase approved by Holton voters in November and intended to go into effect on Jan. 1 will actually not take effect until April 1, the Holton City Commission noted on Monday.
Holton City Manager Bret Bauer told commissioners that according to Kansas state law, the city has to pass an ordinance finalizing the half-percent sales tax, designed to speed municipal infrastructure improvements and reduce the city’s outstanding debt. The sales tax increase, which will put the city’s total sales tax at 0.75 percent, was approved by Holton voters in the November general election by a three-to-one margin.
However, Bauer said that the city was contacted by the Kansas Department of Revenue upon learning of the sales tax initiative’s passing and told of a 90-day period that has to lapse before the sales tax can go into effect. That would put the effective date of the new sales tax at April 1, 2014, but it would not change its “sunset” date of Dec. 31, 2023, since that date was specified in the ballot question.
Commissioners approved the ordinance finalizing the sales tax and setting the April 1 effective date, or “the first of the quarter after 90 days” following the election, according to City Clerk Teresa Riley. The ordinance will be bundled together with the original sales tax resolution and a copy of the certified election results to KDOR prior to the new tax going into effect, it was reported.
However, Commissioner Tim Morris expressed concern over “lost revenue” due to a KDOR requirement of which the city was not aware.
“That 90 days could have started earlier,” Morris said. “I’m disappointed that there is going to be some lost revenue… That’s deceptive.”
Riley concurred, saying that the last time a new sales tax went into effect in Holton — January of 1995, when the city’s existing quarter-percent sales tax for street improvements went into effect following its approval in the November 1994 general election — there was no such 90-day requirement from KDOR.
Kansas Statutes Annotated 12-191, last modified in 2003, states that “the collection of any sales tax of a county or city approved at any election shall commence on the first day of the calendar quarter next following the 90th day after the date that the city or county has provided written notice to the director of taxation of the election authorizing the levy of such tax.”
In other business on Monday, commissioners approved an amendment to the city’s 2013 budget and set a public hearing on the amended budget for the commission’s next meeting, set for 7 p.m. Monday, Dec. 16 at Holton City Hall.
Bauer said that at the end of a budget year, any funds that exceeded their budget or may exceed their budget. Primarily, the Beck-Bookman Library fund is overbudget, as the city had not planned to turn over all expenditure payments to the library when the city assembled the original 2013 budget.
At that time, Riley noted, the city was paying wages for library employees, but when the library took over its funds this year, the city “sent them everything that we had down to the zero balance, which was more than we had budgeted.”
The city’s equipment reserve fund has seen an increase in receipts this year, Riley said, noting that monies go into that fund from the city’s share of the county’s 0.4-sales tax. That has allowed for increased expenditures this year, it was reported.
The city’s electric fund also had a substantially higher starting cash balance, Bauer said, and “in order to transfer those funds out” for capital improvements — namely the purchase of generator catalysts at the city’s power plant — the budget must be amended. He added that there are still two more catalysts to be purchased for generators, and that will be an agenda item for the Dec. 16 meeting.
• Approved minutes from the Nov. 18 meeting and a list of budget appropriations made since that meeting.
• Heard a comment from Holton resident and former commissioner Harold Kennedy, who expressed appreciation that the commission was “doing a wonderful job this year of taking care of business for the city.”
• Agreed to take no further action on a proposal for a sign recognizing the achievements of Holton High School’s sports teams.
• Discussed the possibility of adopting a new fine schedule for various infractions and misdemeanors. The discussion will be continued at the commission’s next meeting.
• Approved a bid of $26,825 from Foster Ford of Holton for the purchase of a Ford Interceptor SUV for the police department.
• Were reminded by Bauer that the city will have several lighted vehicles in Saturday’s Christmas Parade of Lights. The parade begins at 5 p.m. and will circle Holton’s Town Square.
• Met in executive session for 15 minutes with Bauer, Gakle, Riley and Assistant City Manager Kerwin McKee to discuss non-elected personnel matters. No action resulted from the session.
• Adjourned the meeting at 7:55 p.m. All five commissioners were present.