The City of Vandalia has become one of the first area municipalities to place a sales tax clarification issue on its April ballot after alderman approved the required measure during their first meeting of 2016 last Tuesday.
The ballot language was approved to read: “Shall the City of Vandalia discontinue applying and collecting the local sales tax on the titling of motor vehicles, trailers, boats, and outboard motors that were purchased from a source other than a licensed Missouri dealer?”
In order for the City to continue collecting at the 8.1% rate, voters would need to choose “No.” This vote helps the City continue to collect the local sales tax on out-of-state purchases and continues to provide a local revenue source for the City. It also keeps Missouri dealers at a competitive level with non-Missouri dealers of motor vehicles.
Aldermen did unanimously approve the two readings of the bill and passed it so it could become an ordinance. Alderman Raymond Sutton was absent from the meeting.
So how did this issue get to the ballot?
In Missouri, the purchase of vehicles, trailers, boats, and outboard motors are treated differently than other retail purchases. Currently, the local sales tax is not paid at the time of purchase for those items.
Sales tax isn’t charged at the location of the purchase, but rather is based on the address when the product is registered with the Missouri Department of Revenue.
This item has been discussed for a while now.
On January 31, 2012, the Missouri Supreme Court ruled in Street vs. Director of Revenue, that only cities with a use tax could collect local sales tax on purchases from out-of-state (as well as person-to-person sales).
Purchases from Missouri auto dealers were still subject to the tax. The Missouri Department of Revenue estimated that approximately 20% of vehicle (and trailers, boats and outboard motors) sales occur from out-of-state vendors or person-to-person sales and this would result of a loss in revenue to local jurisdictions of approximately $20.5 million.
Then comes August 2013, when the Missouri legislature passed HB 184 to re-impose the local sales tax on vehicle sales (and person-to-person sales) in the form of an administrative fee. The legislation requires that cities that did not have a use tax in place prior to August of 2013 must receive voter approval to continue this administrative fee by November of 2016.
Cities that don’t gain voter approval to continue the tax by November of 2016 will lose the revenue stream after that date.
A referendum ballot language is included in the State Statute, which requires the question of repeal be submitted to the registered voters. Any deviations from the statutory language in the ballot question may put the validity of the tax at risk.
Due to the somewhat unique method chosen by the legislature to address the issue of out of state purchases of motor vehicles, trailers, boats, and outboard motors, some uncertainty may exist as to the ballot language.
What this means, is that the City, as an entity that receives sales tax and must place the proposition on the ballot on or before November 2016 for a voter decision. Due to the cost of this election required by the State, the Audrain County sales taxing entities have met and believe that the April 2016 municipal election would be the most cost effective time to present this question to the registered voters.
MIRMA Risk Management Achievement Awards
MIRMA’s Jeff Arp attended the meeting to present three risk management awards to the City of Vandalia. The City made their grant entries by the September 1, 2015 deadline requesting monetary reimbursement for items designed to eliminate or reduce loss exposure. The award gave the City up to 75% for each project or item.
Arp’s presentation was made for $4,821 to go towards a taser with a taser cam, a police car dash mounted audio/video camera, and a flammable storage cabinet.
The City’s portion, which is to be budgeted next year or will come from the fund balance, will be approximately $3,160.10.
The breakdown is as follows:
• Taser with taser cam-$1,811.10 (approximate total costs), $1,358.33 (award request), $452.77 (city match), $996 (awards received), $815.10 (approximate revised city match)
• Police car dash mounted audio/video camera-$4,820 (approximate total costs), $3,615 (award request), $1,205 (city match), $3,150 (award received), $1,670 (approximate revised city match)
• Flammable storage cabinet-$1,350 (approximate total costs), $1,012.50 (award request), $337.50 (city match), $675 (award received), $675 (approximate revised city match)
The Budget Process was unanimously approved by aldermen.
The budget will be presented to aldermen for approval on February 9 and it must be approved prior to the March 1 meeting in order to continue operations.
Each department will be involved in the process and will maintain services at current levels with 0% growth.
The Budget Officer and Finance Director will review all of the expenses and revenues, make recommendations for funding, ensure the budget is balanced, and will assemble the proposed budget.
A commitment to service is priority along with maintaining resources of the organization-fund balances and personnel.
Budget is reviewed for review at least four days before the City meeting. It is noted that questions on the budget should be received and reviewed before the meeting.
Staff will present decision points during a presentation to the board. The proposed budget must cover the fiscal year March 1, 2016-February 28, 2017.
Aldermen approved the budget process unanimously.
Properties to be
City Clerk Karen Shaw told the Board of Aldermen that Mike Bunge, with Central Bank of Audrain County, told the staff that the bank is looking to obtain properties located west of their bank facility on West Highway 54.
Bunge said the bank intends to pay the taxes, which includes $400 in mowing bills in 2014. He did say the bank is also asking to have the $600 in mowing bills for 2015 to be forgiven by the City in exchange for cleanup of the property.
The area in question is 1008 West Washington and 1002 West Highway 54.
Aldermen approved the measure unanimously.
Approval of preparation for SSESS
Aldermen unanimously approved the selection of THHinc McClure Engineering Company for providing professional engineering services for a Sewer System Evaluation Study for grant related activities, contingent on receiving the SCEAP grant award.
Interim City Administrator Hopke told aldermen that the City has applied for funding for the study through the Department of Natural Resources’ Small Community Engineering Assistance Program (SCEAP). DNR has reviewed the application for the wastewater collection system evaluation and has determined that the project may be eligible for funding through the program pending submitted and review of proper procurement documentation of an engineering firm and approval of the draft engineering agrement within the approved timeframe. A Request for Qualifications was received by three engineering firms before THHinc, McClure Engineering Company was selected due to their past record of performance, familiarity with the area of the project, specialized experience, and capability to perform what needs to be done. After council approval, a draft engineering agreement would be sent to DNR’s Financial Assistance Center for review and approval. According to the drafted city minutes, there is no guarantee of funding at this point, but the City needs to complete the necessary steps to remain eligible, since I & I continues to be a major area of concern. This SSES would provide much needed information for future projects for the system. All of the information for the grant must be submitted by March 2, 2016.
Vandalia resident Brittany Dieckmann discussed concerns regarding the drainage surrounding her residence on West Home Street. Her concern regarded a pump at a neighbor’s home that doesn’t allow for water to flow down the street.
Alderman Gabe Jennings asked about what the ordinances were regarding mobile homes in the city. It was noted that they need to be on foundations.
December 2015 meeting minutes and Accounts Payable were unanimously approved.
Finance Officer Sharon Myers discussed the need for aldermen to authorize the write-off of aged, delinquent utility bills.
The City can still collect money if the accounts are written off.
Discussion was held in regards to why some residents are not getting their utilities shut off sooner. It was noted that there are laws to follow regarding the city’s ability/inability to cut off the utilities of those not paying their bills, for example, during the winter months due to the cold.
A list of bills was provided, totaling $52,501.36 Alderman approved the measure unanimously.
Alderman John Weiser asked if the City ever received reimbursement by the donor for painting the Historic Church downtown before Prairie Days.
It was noted that no reimbursement had been received.