By Becky KISER
Hays Post
By paying off some economic development bonds early, the city of Hays will save about $32,000 in interest and return sales tax monies to the general fund, approximately $200,000 per year.
City commissioners Thursday night unanimously approved the expenditure of $407,709 from city commission capital reserves to redeem the September 2022 and September 2024 bonds in the 2004-A Series, to be replenished from the Home Depot economic development bonds fund 2023 budget.
The debt service for this series is funded by the TIF (Tax Increment Financing) well as 0.5% of the city’s retail sales tax in the Home Depot area which also includes I-HOP, Travel Plaza, Hampton Inn and TownePlace Suites by Marriott.
In addition to the $32,000 interest savings, "it also puts that half-cent, which averages about $200,000 annually, back into the general fund," explained Kim Rupp, Hays finance director. "That's one of the bigger benefits, all happening about 18 months from now.
"The area is performing better than originally projected, the TIF and the sales tax."
Rupp told commissioners he noticed cash was building in the fund.
"I got to thinking, 18 months down the road, we don't want to have all that cash. That cash can be used now."
Rupp consulted with the city's bond counsel who ran some number projections that supported Rupp's suggestion an early payoff would be financially beneficial.
"This will be a nice shot in the arm coming back on the tax rolls for us," said Shaun Musil, commissioner.
General fund monies are generated primarily by the city's sales tax. It pays for police and fire protection, parks, and public works.
"We all appreciate how you keep your eye on those things," Commissioner Sandy Jacobs said to Rupp.
The commission also unanimously approved a pay raise for city employees.
The $2,000 Cost of Living Adjustment (COLA) is pro-rated for 2022 and effective with the next payroll.
Assistant City Manager Collin Bielser noted the nation's record high inflation and its effect on employees' wages.
"When factoring in the COLA provided in the 2022 budget, city employees are currently 8.93 percent below where they were in 2020," Bielser told commissioners.
"I think it's important we do this and to take care of the employees. As everybody knows it costs money to retrain people," Musil said.
Vice-Mayor Michael Berges said he's seen private companies in Hays make similar moves recently, "so I don't think it's out of line for the city."
Mayor Mason Ruder agreed.
"The greatest investment we can do is in our employees," he said. "They keep Hays running, even though people might not always see it."
In other business, commissioners approved renewal of the city's 2022/2023 property/liability insurance coverage with Midwest Public Risk (MPR) for $292,679. The premium is up 11 percent from last year, primarily based on the city's added values/exposures. Insurance Planning, Hays, is the city's insurance broker.
A resolution was also approved setting a July 28 public hearing for establishment of the RHID (Rural Housing Improvement District) and development plan for 4th and Fort.
The developer, Turn-Key Properties, wants to construct four structures with 36 apartment units directly west of the former Washington Elementary School.