If the half-cent capital improvement sales tax is approved in April, city officials have clarified just how much money it expects the tax could generate.
Washington City Administrator Darren Lamb told the city’s sales tax commission Tuesday, he’s expecting the tax to generate between $16 to $16.5 million over the eight-year lifespan of the tax for the city to use in various projects.
Back in October, at the first meeting, Lamb reported the city would have about $12.6 million to spend on various projects. That number he said was based on bonding out certain projects.
Lamb said the city would need to set aside $2.5 million for debt payments if it utilized bond funds. Several weeks into the project meetings, Lamb said bonding out the work seems unlikely.
Without having to make the debt payments, the estimated revenue to the tax was upped to $15.1 million. That number was again upped Tuesday to somewhere between $16 and $16.5 million.
Lamb explained the city expects, based on past performance, the tax to generate about $2.2 million annually. Over the eight years of that tax, that adds up to $17.6 million.
In October, the city reported a goal was to save $1 million for reserves.
Lamb said the city has been conservative with its revenue estimates all along. Based on numbers presented in October, the 2010-18 version of the tax had a little more than $16 million allocated toward projects.
The city’s sales tax committee is currently trying to trim a list of 30-plus projects in order to get under the proposed revenue budget. The proposed projects are projected to cost more than $18.2 million.
Bonding was used last time to help pay for the $3.3 million library renovation. Lamb said the bond market was good and construction costs were low, so the city opted to secure funds early to expedite the work.
This year, he said the city will either save money to pay for big ticket items, like the proposed $4 million allocated to build a new city pool. Lamb said the city also could take out a short-term loan from an area bank.