By BECKY KISER
Hays Post
With no discussion, Hays city commissioners Thursday night unanimously approved an ordinance requesting a delay in implementing the Community Improvement District for the new travel plaza and truck wash under construction at Interstate 70 Exit 157.
Construction of the new business, which was scheduled to open April 1, has been slowed by nearly a year in the midst of the coronavirus pandemic. The project also includes a stand-alone restaurant, hotel and retail outlets.
Doug Hutchinson, Topeka, of D & J Land and Development, gave a progress update to the commission last week.
The 2 percent CID sales tax, now set to begin Oct. 1, will be imposed on only the travel plaza and truck wash portions of the project to fund certain developer expenditures on a pay-as-you-go basis. The CID sales tax will generate approximately $2.2 million over the maximum 22-year term.
"This doesn't present another other legal or financial considerations to the city," explained Kim Rupp, finance director. "Pretty simple. Very straightforward."
A similar CID delay request was previously approved by the city commission for the Hilton Garden Inn.
Commissioners also approved a resolution reviewed by Rupp to offer the sale of general obligation bonds for the city's share of the $14 million North Vine Street Improvement Project.
The 25-year issue will be for $6.8 million. The city's annual payment is estimated at $338,553 with a 1.77 percent interest rate.
"I'd like to emphasize there's not going to be any general fund money paying this debt off," said Commissioner Ron Mellick. "It will be strictly transient guest tax. Taxes within the city of Hays will not be going up for that."
Rupp pointed out that because it is a general obligation bond, "it's a general obligation of the city. Should that (transient guest tax) fall short, we would potentially need to use general funds."
But, he doesn't expect that to happen.
Rupp has been working with the city's financial advisor Stifel, Nicolaus & Company (formerly George K. Baum), and the city's bond counsel Gilmore Bell to prepare documentation for the March 25 sale. David Arteberry with Stifel, Nicolaus & Company will be at the March 25 commission meeting to report on the sale of the bonds, including the final issuance amount and interest rate.
"We've been conservative with the plan, another reason why we're staying with the 25 years, to keep that payment level and keep it lower," Rupp said.
"We're letting the Transient Guest Tax recover from the COVID issues we've had and get a year and a half in. We feel then we'll be on a good track and the Transient Guest Tax should be able to handle those payments from here on."
An additional 2 percent TGT went into effect Oct. 1, 2018, to pay for the North Vine Street Improvement Project. With fewer travelers staying in Hays motels due to COVID, the pillow tax was down 30 percent last year. The total transient guest tax is now 7 percent.
In other business, commissioners:
* Approved the low bid of $451,280 from QSI for eight shade structures at the Bickle-Schmidt Sports Complex. Monies from the city's share of the Ellis County one-quarter cent sales tax will be used.
* Approved a 2.0 percent pay increase of the base salary of 2021 for City Manager Toby Dougherty as a merit increase.
* Heard a review of water conservation programs in 2020 from Holly Dickman, water conservation specialist
* Heard a monthly progress report of city departments by Collin Bielser, asst. city manager
* Conducted a 10-minute executive session including Dougherty, Bielser, City Attorney John Bird and Hays Regional Airport Director Jaime Salter regarding the acquisition of real property. No action was taken following the executive session.
* Mayor Sandy Jacobs was absent from the meeting. It was chaired by Mason Ruder, vice-mayor.