There is no LOST money

HAMPTON CHRONICLE OPINION: Local Option Sales Tax (LOST) dollars have been a topic of renewed interest within the city council chambers of Hampton, ahead of the due date for the city to send the voting language to the Franklin County auditor ahead of November’s election. While citizen attendance has been low at the biweekly council workshop and regular meetings leading up to this legislation, there has been no shortage of opinions about what should be done with the money in the comments sections on Facebook and in social groups.
But while everyone has his or her own opinions about the use of the funds, what may be missing from these online or in-the-booth-over-drinks discussions could be context. And without context, reacting to a decision with such a high amount of impact over the medium-term future of Hampton could be halting progress, not advancing it. It would be in the best interests of the council and voters to back the council’s initial LOST proposal for the sake of Hampton’s small, continued progress.
Hampton will be reaching the end of its debt payments on the new aquatic center at Progress Park by the end of this fiscal year, meaning that without transferring the LOST dollars to other entities by way of vote this November, the $0.01-per-$1 tax on every purchase in Hampton (excluding hotels and motels, as well as gasoline) will go to funding the aquatic center, a city-estimated total of $330,000 annually, for 15 years. While such funds definitely cover the costs of running the center for a season as well as making needed repairs to the equipment, the city has other aspirations for the funds, in addition to using them to keep the center running, at cost.
City officials, council members and the mayor have held meetings over the last nine months with vital city staff of the police and fire departments and public works, to come to the stable agreement that such departments need funding beyond what they can receive in the general fund.
What has seemed to be the most agreed upon portion of the allocation is funding the fire department with 20 percent of the dollars, funding the pool and parks with another 20 percent and funding the police department at five percent. All of these numbers were arrived at by interviewing the leaders of all departments about what is necessary to run their departments. Some might say that five percent for the police department is not enough, however, by breaking down the forecasted 15-year average in LOST dollars, according to City Manager Ron Dunt, 20 percent of the LOST funding is equal to $66,000. This means that the aquatic center and parks will receive $66,000, as will the fire department. For police, much of the big-ticket items that the council needs to finesse around are vehicles. At five percent of the LOST dollars, that comes out to $16,500, which would cover the cost of a police vehicle should the department need it. If 20 percent were allocated to the department, since it’s already funded by the city’s general fund, the department wouldn’t have a pressing issue to spend all that money on.
The more contentious portion of the reallocation proposal is what to do with the remaining 55 percent. The council deemed that the 55 percent can be allocated to whatever use the council approves to be necessary. In last week’s issue of the Hampton Chronicle there was a list published of all the projects the council thought 55 percent could be used for. Many disagree, calling the use “vague” and aimless in its ambitions.
To be honest, there are a number of outcomes that can be arrived at, each would prioritize the city’s needs in different ways, and would absolutely result in the outcomes the reallocation intended; however, backing anything other than 55 percent to be used when necessary ties the hands of the council and future councils to funds that they may not be able to access.
To be clear, the city’s budget is approximately $8 million per year. At $330,000 above that number as revenue, the LOST dollars, if used as part of the general fund, would fund 4.62 percent of the budget. The disputed 55 percent of the LOST dollars would amount to 2.269 percent ($181,500). Everyone in Hampton’s biggest concern is the condition of the roads, but to be clear, the city’s current HMA Overlay project — which did not require removing and replacing the base of the roads — cost a little over $600,000, for roughly 10 downtown blocks. The council had no LOST dollars used for the projects. Rather, the council used the utility franchise fees and did not need to bond for the money. The city would need to wait a minimum of four years to save up enough money from LOST dollars to do a project even remotely close to size and scope of the recent overlay work.
This wouldn’t necessarily be a problem, except for the fact that if the council and voters backed a proposal that allocated over 50 percent to roads, the council wouldn’t be able to touch that money for anything else. Meaning, they could not fix alleyways, they couldn’t upgrade the tornado sirens; they couldn’t plan for a new well, which the city will need in the coming years, or even invest in a downtown revitalization program. The way LOST dollars work are that they must be used for the purpose that was voted on. The money at the end of the year doesn’t roll into the general fund. The council will never have access to the funds unless it’s for roads.
Superintendents, county supervisors and city councils are all given money from the state and federal government that is earmarked, meaning it can only be used for certain purposes. The Hampton Chronicle has reported numerous stories about how these earmarked dollars put public institutions in a bind when they come across a project that needs money, but the money each institution has can’t be used because it has been earmarked. The city earmarked 40 percent of the LOST funds, and has specified exactly what projects it would like to use them on. Making the 55 percent highly specified does nothing but make the council sitting ducks, waiting for money to accrue to the point it can be used. Should the city need a new traffic light, when money is allocated to roads, it won’t be able to use it. Sure, this builds roads every five years, but it does nothing else during those five years. Using the broad stroke of calling it “infrastructure” is also very vague, vague enough that no one knows what is meant by it (streetlights? Stop signs? Crosswalks? Sewer? Sidewalks?). Then the debate of whether something counts as infrastructure will add needless red tape to the powers of the council, when if the reallocation remains as is, the council will be able to act swiftly.
Remember, this would be less than three percent of the city’s budget, if it were part of it, every year. The city paid off a major roads project without bonding for money. There is no lost money here. No dollars ending up in a slush fund or misplaced, or being used to buy frivolous items. The city council has demonstrated that it can work within its means and provide great services when called upon. The extra dollars from LOST reallocation serve to increase spending power on a variety of items that currently need attention in town, but will not receive it otherwise if this proposal is voted down.
Either way, the city will make do with what is has. It always will and has proven that much. The point is that can what currently needs small attention last the five years it would take to raise enough money for more roads? No one can be sure, but we all know there is more that the city can do with the money.