By BECKY KISER
Hays Post
Hays city commissioners voted unanimously Thursday night to approve a charter ordinance that will increase the transient guest tax (TGT) rate 2 percent to fund improvements to the north Vine Street traffic corridor, estimated at more than $7.6 million.
The TGT is currently at 5 percent and is added to each customer bill for stays in Hays motels. The monies fund the Convention and Visitors Bureau budget and are used for the promotion of Hays.
“City staff suggested a significant part of the project could be funded with transient guest tax dollars, due to the fact the improvements would make it better for visitors, pedestrians, people that are staying in the area, and not just for people that live here,” said Hays City Manager Toby Dougherty.
The Hays 5 percent TGT is lower than most of its peer cities in Kansas. Johnson County’s rate is 9 percent.
The charter ordinance can be challenged within a 61-day period by a petition of more than 10 percent of voters who voted in the last city election. If a valid petition is presented, the ordinance will be put to a vote of Hays residents.
Final publication of the ordinance will be June 25. The protest period will then begin, ending August 25. If there is no protest petition, the Kansas Department of Revenue will be notified August 27, with the new rate implemented October 1.
The city hopes to receive some federal funding for the roundabout project through a TIGER grant from the U.S. Department of Transportation. Vine Street is also a federal highway, U.S. Highway 183.
“If the grant is large enough, I’m sure our finance director (Kim Rupp) could look at the possibility of the city self-financing the project and get the interest off the grant, which would be beneficial for us as well,” Dougherty said.
Admitting he is “not a fan of roundabouts,” Vice Mayor Henry Schwaller still supported the TGT increase.
“We do need to resolve the intersection and 32nd and 33rd. It is the most dangerous intersection in the city and we’ve neglected it for a long time,” said Schwaller.
“We know one option that was really simple but we cannot pursue today, was about $1.8 million. So regardless of how we pursue this – we don’t even know what the engineering is going to look like — we will need at least $2 million to fix just that one intersection. It’s important that we do it and that’s why I support this tax.”
Commissioner Sandy Jacobs agreed with Schwaller, noting the earlier option came out of the city’s 20-year comprehensive plan. “I’m sorry we didn’t do that then but we didn’t, and now we’re moving forward.”
“I really appreciate staff’s recommendation on this. I think it’s an outstanding way to finance something that doesn’t call for us to raise taxes in other ways,” she added.
The 2 percent TGT increase is projected to raise $6.2 million over 20 years.
Outgoing commissioner Chris Dinkel called it a “creative approach.”
“We’ve known that the north Vine corridor has needed help for a long time…The idea of putting roundabouts throughout this corridor to help with access to businesses with this creative way of funding it doesn’t require us to raise taxes on the city. It doesn’t put other projects in jeopardy.”
Mayor James Meier noted the city’s sales tax revenues, which make up most of the General Fund, have been stagnant the past five years, while Transient Guest Tax receipts have increased.
“It’s been growing steadily,” Dougherty confirmed, “and in some places significantly outpacing the sales tax which has been very flat the past three years.”
The TGT was flat last year, according to Dougherty, the first full year the former Ambassador Hotel was closed. During that time, the Butterfield Inn, now Best Western Plus, was also closed for a significant time to repair water damage.
“TownePlace Suites is now open,” Dougherty noted. “Another hotel is getting ready to be constructed and another is in the planning stage, so we think the TGT is going to keep going up.”
The city is considering a plan approved by the Kansas Department of Transportation to install Vine Street traffic roundabouts at 32nd/33rd, 37th and 41st Streets. Engineering and design is underway.