FAIRFIELD — Tuesday’s discussion by the Fairfield City Council decided little about the future of the Fairfield Arts and Convention Center. But it did bring the city’s local option sales tax into sharp focus.
The center is failing, board members say. They propose a $1 million buy-in by Fairfield and Jefferson County, split 65 percent and 35 percent respectively, with the governments left in possession of the center after all debts are paid. It’s a shift from the center’s first years of operation, during which the center has operated as an independent facility.
“The financial situation is pretty urgent,” said Pat McMahon, a board member. “We are behind on our mortgage payments today. We are behind on our lease payments today. We owe local vendors.”
The $1 million from the city and county will not cover that debt in full. Another $1 million is being solicited from private donors and the Iowa State Bank has agreed to write down the debt. McMahon said the center received $250,000 in donations over the weekend to jump-start the private donations.
If the city pursues involvement with the center, the money will most likely come from Fairfield’s local option sales tax. The city passed the tax in 1999, but a better starting point is 2001. The city received additional revenues in the first two years because the county had not yet passed a similar tax.
The tax brought in $593,000 in 2001 and grew rapidly through 2003. Growth has slowed since those years, but revenues have only fallen once, in 2004. They are now at $818,500 some 38 percent higher than in 2001.
Mayor Ed Malloy said the change in the tax’s usage would come from funds for community betterment, not streets and sewers. The city typically gives money to civic groups out of that portion and uses it to augment the city’s budget. Changing the use of the tax means less money, if any, available for those uses.
First Ward Councilman Ron Adam wanted to know who would no longer be getting those benefits.
“Can we get a list of what we aren’t going to be able to do, who’s going to have to sacrifice?” he asked.
Malloy listed groups like the Little League, bike trails, Art Walk and a skate park as beneficiaries. But he tried to blunt the loss by looking at the city’s spending before the tax came into effect.
“The thing is, Ron, and I’ve thought about this too, is that we really haven’t given money to these organizations in the past,” said Malloy.
Councilmen John Revolinski and Myron Gookin both said the city needs to be clear about both where the funds are coming from and what sort of organizations have benefited in the past. Revolinski argued people cannot make a good decision on changing the tax without accurate information.
And people will have the final say if things move forward as envisioned. Changing the local option sales tax, which voters approved, requires a new vote. That will cost approximately $7,000 for a special election.
The overall cost to the city would be about $650,000 for its share of the center. Gookin said that breaks down to about $90,000 per year over the life of the tax if the city shoulders it alone. That absorbs most of the revenue not earmarked for streets and sewers.
City Administrator John Brown warned the council it would be unwise to make a decision based on that figure without having the city’s financial advisors work out a projection. Gookin nodded as Brown made the recommendation.
The city and county have some time to make the decision on whether to pursue an election. Supervisor Lee Dimmitt said the county auditor told supervisors they cannot have a special election before March 2, 2010.
Matt Milner can be reached at (641) 683-5359 or via e-mail at mwmilner@mchsi.com
CORRECTION: The original version of this story incorrectly listed $650,000 as the cost for the election. It is the cost for the city's share of the proposed buyout. The election would cost approximately $7,000.
Local News
Future of Fairfield civic center in question
If approved, change in city’s tax usage would come from funds for community betterment
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