Questions over the need for additional street maintenance dollars beyond what’s already budgeted led Buda city leaders to shut down potential fundraising ideas.
One of those options, which received a negative response from several council members, centered on redirecting city sales tax dollars to go toward street repairs.
June Ellis, Buda finance director, said the ideas came to light as the city completes its road impact fee study and is seeking direction from the city council.
City officials budgeted $60,000 this fiscal year for a road impact fee study. Currently, Buda has allocated $96,000 for street maintenance in fiscal year 2018.
Ellis said the redirect would involve taking 1/8th of one percent of sales tax revenue collected by the city.
Ellis estimated the city could generate roughly $500,000 by using this method. If enacted, the redirect of sales tax dollars would be in place for four years before it sunsets.
Doing so, however, would transfer sales tax dollars meant to go into the city’s general fund or the city’s Economic Development Corporation (EDC) to street maintenance. Additionally, the city would have to take the measure to the voters for a referendum, which would incur a cost to hold a special election.
Wiley Hopkins, Buda City Council member Place 2, said redirecting sales tax dollars is “too adverse” to the city and the EDC.
Hopkins said he didn’t see the need for the redirect proposal, and that he has not heard the city doesn’t have enough money for street repairs.
Buda Mayor George Haehn was hesitant to redirect sales tax dollars from the EDC, as it’s “money well spent.” Buda City Manager Kenneth Williams said the city needs a comprehensive analysis of a proposed sales tax redirect before enacting it.
“Once you put one of these dedicated funds in place, it’s hard to undo, versus a budget amendment,” Hopkins said.
Several council members also hesitated on a second potential option, which involved instituting a commercial and residential street maintenance fee.
Ellis said the fee wouldn’t require an election and could be a shared cost by all in the city.
Austin, Taylor and Bryan are cities that have enacted a street maintenance fee.
However, Ellis said one negative aspect is a fee could be divisive, especially if a tiered system is implemented to address road impact usage.
Some city leaders were concerned about hiring a specified consultant to manage the maintenance fee. City officials had previously requested an estimate for the cost of hiring such a consultant, and they figure it would now be about $55,000.
Evan Ture, Buda City Council member Place 6, advocated for the city to continue pulling street repair money from the city’s general fund. Ture said it would be a “great way to go about it” rather than having a separate fee or hiring a consultant.
Buda City Council Place 4 Paul Daugereau was worried about how it would appear to ask for additional fees prior to the start of city bond projects. Those concerns extended to both road and drainage improvements under the city’s 2014 $55 million bond.
“It will be unpopular no matter how we do it, but the money has to come from somewhere,” Ture said.
