The Jefferson City Finance Committee on Thursday recommended the City Council consider approving bonds to fund park improvements over the next 20 years.
The special obligation improvement bonds, which would not exceed $7.5 million, would primarily be payable out of the half-cent Jefferson City Parks, Recreation and Forestry Department sales tax, according to the resolution.
The Parks Department would be responsible for approximately $500,000 in annual debt service per year, Jefferson City Counselor Ryan Moehlman said.
If the Parks Department does not cover the bond, the City Council has the authority to use parks sales taxes to cover the fund, he added.
"The debt service amount is really only a portion of what's annually raised out of the sales tax," Moehlman said. " I think the risk of having to use anything but the intended funds is very very low, but it's not zero. That's something for the City Council to be aware of."
The park fund collects approximately $5 million a year, Jefferson City Finance Director Margie Mueller previously said.
Parks Director Todd Spalding said the bonds have been discussed and analyzed for about two years.
"I think we got to a point where we all felt very comfortable about it," Spalding said. "This is very typical of parks departments. I think certainly safe is the right word. This is a very small percentage of our annual sales tax revenue that we get. There's parks departments that I know of that spend 100 percent of their sales tax revenue on capital projects like this. This is a great compromise to get some needs filled in our community and parks and recreation. I think we're finally here and ready to go."
Improvements at the entire parks systems over the next 20 years would be funded by the bond.
The city's bond council is preparing the ordinance, which will be presented at the Nov. 4 City Council meeting, Mueller said.
City sales tax update
In other business Thursday, the Jefferson City Finance Committee reviewed its tax revenue for April through June quarterly and July reporting periods.
The city's 1 percent sales tax generated $1,247, 796 April through June quarterly and July - $51,506 above projections.
The half-percent capital improvement tax generated $608,697 April through June quarterly and July - $94,883 above projections.
The half-percent parks sales tax brought in $608,709 April through June quarterly and July - $69,204 above projections.
The city collected $117,845 in lodging tax in July. Since voters approved the lodging tax increase in 2011, the 7-cent lodging tax has accumulated more than $9.5 million. The 4-cent tourism fund has nearly $5.6 million.
Jefferson City's hotel occupancy for July decreased compared to the same time last year - 58.8 percent versus 60.3 percent.
The Finance Department estimates $5,630,437 in unassigned fund balance, which is 17.16 percent, at the end of the 2019 fiscal year. The city recommends putting at least 17 percent of unspent funds in the unreserved fund balance.
Also on Thursday, the committee recommended sending the audit services bid of Evers & Company to the full council.