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Selling the sales tax in Sterling

City manager will give detailed presentation Monday

STERLING – The city manager will make a case Monday for the need to pass a sales tax referendum for capital projects that will be on the ballot April 4.

The city is seeking a half-cent increase in the local option sales tax to help pay for sewer upgrades and other infrastructure projects.

City Manager Scott Shumard will make a detailed presentation at Monday’s City Council meeting.

The half-cent sales tax already in place brings in an estimated $1.175 million a year.

By doubling that tax, the city would have an estimated $23.5 million for infrastructure work over the next decade.

The first half-cent was approved by voters in 2004, after it had been specifically designated for fixing roads.

Shumard recently put together a new 10-year capital projects report. The bill for a completed wish list is an estimated $32.5 million. The list doesn’t include a $30 million sewer plant that will be needed at some point. For several years, the city has been putting aside money for that project.

The council on Dec. 19 unanimously agreed to put the tax increase proposal on the ballot. Although the end result was a unified vote, getting there had spurred contentious debate. While all of the council members agreed there was a need for the extra tax revenue, some were adamant that its specific use be conveyed to voters.

“I believe the first half-cent referendum was passed largely because the city made it clear how it would be used,” Alderman Joe Martin said.

He made the case that the extra revenue should be used only for stormwater sewer and streets projects.

The city also had discussed the institution of a stormwater utility fee to help pay for sewer projects. Alderwoman Chris Wilen, along with Martin and John Stauter, had voiced strong opposition to the utility fee.

“We need to look at our most immediate problem, and right now that is stormwater sewer issues,” Wilen said. “Maybe we could look at a utility fee later, but our residents need a breather.”

Shumard’s presentation will outline how the sales tax will support the cost of capital projects. He will identify the top priorities – stormwater management projects, and streets overlay and resurfacing.

Shumard will detail the stormwater problem, including causes, how they can be fixed, and where the most pressing needs exist. He also will discuss some project specifics at various sites.

Shumard said the highest priority stormwater projects would cost about $5 million, and the only way to find that revenue would be to rob the streets fund. A list of the most pressing road projects brings a price tag of about $18 million.

The city said the only alternatives to the sales tax are the stormwater utility fee or general obligation bonds that would be funded through property taxes. Another option is to indefinitely delay the major sewer and roads projects.

Also on Monday’s agenda, Mike Mudge of Rock River Energy Services will present the latest bids for the city’s electric aggregation program. Mudge will go over five bids he has received for the city.

The council also will look at a resolution that has been drawn up to engage the Illinois Environmental Protection Agency’s help with Lawrence Brothers building. The city has again applied for a $300,000 grant through the EPA Brownfield Assessment Program, but it has failed to get it each year since 2011.

The resolution asked EPA for some technical assistance in case the grant doesn’t come through. The city would have to come up with most of the funding, but help with the assessment process could slightly reduce the cost.

AREA SALES TAX RATES

Aurora Outlet Mall – 8.25 percent
Cherry Valley – 8.25 percent
Chicago – 10.25 percent
Dixon – 7.75 percent
Moline – 8.5 percent
Morrison – 8.25 percent
Rock Falls – 8.25 percent
Rock Island – 8.5 percent
Rockford – 8.25 percent
Sterling – 7.75 percent

*Dixon, Moline, and Rock Island are effective July 1

NEXT MEETING

The Sterling City Council next meets at 6:30 p.m. Monday at City Hall, 212 Third Ave., in the first-floor Council Chambers.

Go to sterling-il.gov or call City Hall at 815-632-6621 for an agenda or more information.

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