Voters may decide funding on water project

Jul. 29—A sales tax increase or a water rate increase?

That's the choice Mayor John Browne and some other city leaders want to give McAlester voters when determining how to pay for a proposed $32.5 million water project.

"We know everybody wants the water fixed," said McAlester Mayor John Browne. "Here are two methods of paying for it."

To help meet state election board timelines, Browne has called a special city council meeting set for 6 p.m. on Tuesday, Aug. 3.

City officials say they are ready to move forward to continue upgrading the city's water system — but they first have some hurdles to pass.

One is asking city voters to approve allowing the city to go into debt for the $32.5 million the water project is estimated to cost.

Another is asking city voters how they would prefer to pay for the project — through a water rate increase or a new quarter-cent sales tax.

City councilors could pass a water rate increase at any time if a majority of city councilors approve it, but Browne said he would prefer to give voters the option of passing a quarter-cent sales tax instead.

"This is the way people want things to work," Browne said. "They want to have a say on how the money is spent."

A proposed ordinance states the purpose of revenues obtained from a new sales tax increase is "to provide revenues to be used to fund water system improvements and associated costs, with said revenues also available to pay debt service on obligations issued by the City and any public trust having the City as beneficiary thereof to finance or refinance said water system improvements and related costs."

If approved at the Aug. 3 special council meeting, Proposition No.1 would be in regard to the proposed one-quarter cent sales tax increase.

Proposition No. 2 would ask if the McAlester Public Works Authority will be authorized to incur $32.5 million indebtedness to fund water system improvements, fund a debt service reserve, if applicable, and fund certain costs associated with the issuance of the indebtedness?

City leaders hope to get the measures on the ballot in time for an Oct. 12 election. To hold an election on that date, the Pittsburg County Election Board must have an election resolution in-hand by Aug. 12, said Pittsburg County Election Board Secretary Tonya Barnes.

Included on the Aug. 3 meeting agenda are action items and public hearings related to the proposed water project, with citizens having an opportunity to address city councilors.

The first public hearing regards the proposed quarter-cent excise sales tax, which would be in addition to any and all other excise sales taxes now in force. It also includes the question of approval or rejection of the creation of indebtedness by the McAlester Public Works Authority, which consists of city councilors acting in another capacity.

A second public hearing involves an ordinance to amend a section of the City Code fixing water rates, and declaring it an emergency. That would raise water rates on a graduated basis depending on usage — but the proposed measure states if the quarter-cent sales tax rate increase is passed by voters in the Oct. 12 election, the amended rates will not be implemented

Following the public hearings, several items are set for discussion and possible action by city councilors at the Aug. 3 meeting.

The first calls for city councilors to vote on authorizing an election resolution, calling an Oct. 12 election in which city voters would approve or reject a city ordinance calling for a quarter-cent sales tax increase. That's followed by an action item relating to the imposition of a quarter-cent sales tax and authorizing the necessary paperwork, should the sales tax increase be approved by voters.

Another item calls for the city council to take action on an ordinance to amend Section 106.71 of the McAlester City Codes fixing water rates and declaring an emergency.

A final item on the Aug. 3 Special Meeting agenda calls for the council to convene as the McAlester Public Works Authority with respect to a resolution agreeing to file applications with the Oklahoma Water Resources Board for financial assistance through one of the OWRB's loan programs, with loan proceedsfor the purpose of funding water system improvements, approving special services agreements and related provisions.

What will the city do if voters not approve allowing the McAlester Public Works Authority to go into debt for $32.5 million?

Browne said the city will still work to improve the city's water system.

"If they don't approve the debt, we can't fix it the way we want to do it," Browne said. "We would probably still do a rate increase, but we would have to fix it on a cash-flow basis instead of a loan."

Contact James Beaty at jbeaty@mcalesternews.com.