By BECKY KISER
Hays Post
The Hays city commission recently approved a contract for engineering/design of three traffic roundabouts on north Vine Street.
That work is currently underway and the project should be ready for bid in late 2019. The $398,000 for engineering will be paid out of the Convention and Visitors Bureau (CVB) contingency fund.
Improvements to the corridor, which was developed in the 1960s, are estimated at $7.6 million. Current traffic conditions are considered unsafe, lack pedestrian access, and are difficult for visitors and travelers to navigate.
In order to pay for the roundabouts at the intersections of 32nd/33rd, 37th and 41st Streets, city commissioners are considering a charter ordinance to increase the Transient Guest Tax (TGT) rate to 7% from the current 5% TGT levied on all hotel stays in Hays.
According to information presented at the June 7 work session, a 2% TGT increase would generate approximately $416,000 annually to support a 20-year bond in an amount of $6.2 million.
That estimate includes the two new proposed hotels to be built north of Interstate 70, the La Quinta Inns & Suites and the Hilton Garden Inn, said Finance Director Kim Rupp. “We added that in,” he told the commission.
“We’ve been looking at funding opportunities and it’s been discussed before, that with a $1 million contribution from Stormwater Reserves for the portion of the project that would actually be designed to convey the stormwater through the system, a 2% raise in TGT could be used to pay for the rest of the project,” City Manager Toby Dougherty said.
The current 5% TGT is lower than most peer cities across Kansas. To increase the Transient Guest Tax, the city commission must pass a charter ordinance.
Passing a charter ordinance requires a two-third majority vote of the city commission. After passage, there is a 61-day period where the ordinance could be challenged by a petition of more than 10% of voters who voted in the last city election. If a valid petition is presented, the ordinance would be put to a vote of the Hays residents.
Assuming passage of the ordinance at the Thu., June 14 regular meeting, final publication would be June 25. The protest period would begin, ending on August 25. The Kansas Department of Revenue would be notified on August 27, and the new rate would be implemented on October 1.
In answer to a question from Commissioner Shaun Musil, Dougherty clarified the recently approved TGT benefit for the Hilton Garden Inn development is capped. “They get the 5% right now. Any future increases are retained by the city,” Dougherty explained.
Musil also asked about the possibility of grants for the roundabout project and whether the TGT could be lowered after being raised 2%. “Every time we raise a tax, it seems like everybody says we never lower it,” said Musil.
“If you raise the TGT in anticipation of prepaying the project and there’s added grant monies or the future commission decides we’re only going to do part of the project and not all of it, which would be a lower price tag, the commission could determine what the net income needed to be…They could either modify the TGT down to 1% or leave it at 2% for a shorter duration,” said Dougherty.
Discussion then turned to how TGT monies are used.
“It’s pretty open now,” Musil said, “and it didn’t used to be. We’re using it for funding of outside agencies and I don’t think it should be a blank check just because we have it. I think there should be some accountability.”
Mayor James Meier and Vice-Mayor Henry Schwaller agreed.
“Not only accountability, but what are we doing with the money? We have no strategy,” Schwaller contended. “No offense to Melissa (Dixon, CVB Director). She’s been in the job for a year. I’d like to know what she intends to do with the money.”
Schwaller was quick to add that Dixon was doing a “wonderful job.”
“If we can use the money to build roundabouts, how come we can’t pay people to mow the Vine Street median using the Transient Guest Tax? Why does it have to be out of the Parks budget?
“We really need to have a strategy if we’re going to raise the TGT,” repeated Schwaller. “How’s the money going to be spent by both the city, outside agencies, and to improve Vine Street, which is the gateway – the entry – to the city?”
The CVB budget is funded by Transient Guest Taxes and is used for the promotion of Hays, including funding to a number of outside agencies. The city’s General Fund monies come primarily from a city sales tax.
Commissioner Sandy Jacobs also supported coming up with a strategy for using CVB dollars.
“We’ve criticized other groups for having excess money and not having a strategy and here we sit at CVB with the same thing.
“I’m sure Melissa (Dixon) would jump in on this,” Jacobs said. “I think it’s great to bring this up before the city budget process and figure out what the strategy looks like.”
“We agree,” Dougherty chimed in. “We’ve already begun the discussion process.”