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Miami Tax Projects - KOAM TV 7

Miami Tax Projects

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MIAMI, OKLAHOMA -

In Oklahoma, municipalities have one resource for operating revenue - sales tax. General Obligation Bonds (GOB) are the only means to utilize property tax for construction, remodeling or repair of city facilities, but the amount is limited to 5-10% of the community's (10 Const. § 26) net assessed value and must go to a vote of the people. The City of Miami's last GOB for construction, remodeling or repair of city facilities rolled off the property tax rolls March 2013.

· In the past, revenue from the state gasoline tax (approximately $250,000 annually) was the only funds earmarked for the Street and Alley Fund. All charges for ice/snow removal, pothole maintenance, and street sweeping were directed to this fund. Cost examples over the course of one fiscal year are: ice/snow removal $15,000 per event; pothole repair $110,000; and street sweeping $80,000.

· In early 2009, City staff reported at public city council meetings that a 1 cent sales tax would generate approximately $20,000,000 to $21,000,000 for street repairs. They recommended a sunset clause be placed on the tax to allow the people the opportunity to decide whether or not to continue street repairs by a vote of the people. They also reported that the cost estimates to repair Miami's 112 miles of roads would double every 3 years.

· Council took a 1-cent street sales tax proposition to the voters on May 12, 2009, which was estimated to generate $20-21 Million in revenue. It was defeated.

· Council took a .65-cent street sales tax to voters on July 27, 2010, which was estimated to generate $10.5 Million in revenue. It was approved by a vote of 1,572 to 676 (total voters 2,248).

· $13,000,000 in revenue bonds were sold. After financing fees were paid, $12,455,000 was available for street repair and placed in a separate fund called the Street Project Fund. The project is referred to internally as the Street Program.

· The Street Program began in September of 2011. Funds are still being spent in 2014 for phase IV. To date, 37,418 feet of new asphalt streets and 16,304 feet of concrete streets have been completed. The repairs for these streets have been both mill and overlays and complete reconstructions where the road and base are both removed and replaced. Besides these street repairs, 51,453 feet (9.75 miles) of road has been repaired by crack seal and slurry seal to extend the life of those streets. There are 5,280 feet in a mile, which equates to 19.93 total miles reconstructed/repaired to date (10/22/14).

· The group Citizens For A Progressive Miami began discussions with the council on August 20, 2012. They shared with the council that they wanted to do a project that would improve Miami. The group's goal was to develop a year round facility at Red Robertson Field thereby making Miami a regional event destination and provide our community with a progressive project to instill a greater sense of pride. This group held the following public meetings: the Rotary Club; a community meeting at First Christian Church; the Ottawa County Commissioners; the Kiwanis Club; a community meeting at Montana Mike's; and a Miami City Council Meeting at the NEO A&M Ballroom where the Economic Impact Study was presented.

· Council took this question to the voters… "SHALL ORDINANCE NO. 1591 OF THE CITY OF MIAMI, OKLAHOMA, BEING AN ORDINANCE AMENDING ORDINANCE NO. 1558 WHICH AMENDED THE " CITY OF MIAMI SALES TAX ORDINANCE OF 1985", AS AMENDED; PROVIDING FOR CONTINUATION OF THE 0.65% CITY SALES TAX PREVIOUSLY APPROVED FOR STREET AND ROAD IMPROVEMENTS FOLLOWING THE RETIREMENT OR CALL AND REFINANCING OF EXISTING BOND INDEBTEDNESS AND FOR THE SPECIFIC ADDITIONAL PURPOSE THEREAFTER OF FUNDING THE IMPROVEMENT AND CONSTRUCTION OF A COMMUNITY EVENT CENTER AND STADIUM COMPLEX TO BE LOCATED AT THE NORTHEASTERN OKLAHOMA A&M COLLEGE CAMPUS, AND BY MAKING DEPOSITS IN RELATION TO INDEBTEDNESS INCURRED FOR SUCH PURPOSES NOT TO EXCEED THE PRINCIPAL AMOUNT OF EIGHT MILLION AND EIGHT HUNDRED THOUSAND DOLLARS AND THE INTEREST THEREON; PROVIDING THAT SAID ADDITIONAL TAX SHALL NO LONGER BE LEVIED OR COLLECTED UPON THE RETIREMENT OF THE INDEBTEDNESS INCURRED FOR SAID PURPOSES; FIXING EFFECTIVE DATE; MAKING TAX CUMULATIVE; AND PROVIDING SEVERABILITY OF PROVISIONS, BE APPROVED?"

· On February 12, 2013, voters approved the repurposing of the .65-cent sales tax with a vote of 819 to 596 (total voters 1,415).

· On December 03, 2012, in anticipation of voters approving the referendum, the Miami City Council formed the Miami Community Facilities Authority (MCFA) that would manage this project, stadium, and community event center.

· On March 20, 2013, the MCFA signed a 30-year lease agreement with the Oklahoma State Board of Regents. The lease includes the stadium and some parking lots.

· Since created, the MCFA has met nearly every Wednesday to complete construction of the facility and establish policies and procedures in a timely manner. The ribbon cutting ceremony took place on October 23, 2014.

· Although the sales tax (.65-cent) that is generated will repay both the street sales tax and the stadium bond anticipation notes, the Miami Special Utility Authority (MSUA) pledged its utility revenues along with the sales tax revenues. Pledging the utility revenues gave the City a better ranking, which in turn gave us a better interest rate on the bonds.

· Per City Ordinance 1591, the street sales tax revenue bonds will be called in approximately 2018 and the stadium bond anticipation notes will be combined to sell as one bond:

"It hereby is declared to be the purpose of the revenues provided by the additional sixty-five hundredths of one percent (0.65%) excise tax levied by this Ordinance to provide revenues for street and road improvements and by paying the principal of and interest on indebtedness incurred on behalf of said City for said purposes. Upon retirement of the aforementioned indebtedness, or call and refinancing of the same, this additional sixty-five hundredths of one percent (0.65%) excise tax levied by this Ordinance shall continue and shall provide revenues for the additional purpose of the improvement and construction of a community event center and stadium complex to be located at the Northeastern Oklahoma A&M College campus in Miami, Oklahoma, and to retire indebtedness thereupon incurred by the City or by a public trust of which the City is a beneficiary in a principal amount not to exceed eight million and eight hundred thousand dollars and interest thereupon. This sales tax shall not be repealed until such time as such indebtedness is retired. This sales tax shall no longer be levied or collected upon the retirement of the indebtedness incurred for these purposes."

· The number of years will be set by the amount of the repayment. At this time, we receive approximately $1,080,000 each year from the .65-cent sales tax. The new bond payment will need to fit into that amount. It is anticipated these bonds will be repaid over 20-25 years at an interest rate of not more than 4%.

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