Augusta Gauges Public Opinion on Sales Tax to Fund New Water Line

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Augusta community members showed strong support for a proposed new water line project, and a possible sales tax to fund it, during a town hall meeting Thursday night.

About 50 people attended the meeting at the Augusta Public Safety building. At least four city council members were also in attendance.

Two weeks ago, city leaders delayed voting on whether to put the sales tax on the November ballot until they could host a town hall meeting.

City council members must make a decision during their next meeting on Tuesday, September 4th for the sales tax to appear on the November ballot.

The city recently has struggled with water, a problem that has only intensified with the drought conditions during the past two years. The city put mandatory water restrictions in place on July 13, 2011.

Much of the concern has centered on the aging water line from Augusta to El Dorado. Some of the line, about 3000 feet, have been upgraded, city leaders said. But much of the line dates back to 1956, creating a mix-match of all kinds of pipe, Mayor Kelsey Williams said. As a result, the line is not able to carry water at full-capacity.

At the town hall meeting, city leaders shared data from a water supply study from Aqua Tech Engineering. The study was commissioned for $10,000 in August 2011. The city received the results of that study in April 2012.

That study provided at least two possible solutions to the city's struggle with water:

The first is the Walnut River Recharge Project. That option would allow the city to pump water from Walnut River to the Augusta City Lake annually to recharge water levels. The estimated cost of that project would be about $2.5 million. But, city leaders say it would only help for about nine months of the year because it would be an ineffective option during the summer months. City leaders call it a short-term solution.

The second option is to build a new 24-inch water line to El Dorado. City leaders say the new 30-mile line would cost about $20 million. The new line would triple the volume carried to the city. It would take about three to five years to complete. City leaders say this option would be more of a long-term solution.

With city leaders leaning toward the second option, the key question has become how to pay for the $20 million-project.

There are at least three options to come up with the estimated $1.1 million dollars each year needed to pay off the debt: increased water rates, increased property taxes, or a one-percent sales tax.

If the project was to be funded by water usage rates alone, the majority of customers would see an increase of about $20 to $30 a month on their bills. Some heavy industrial customers could see an increase of as much as $485 per month. The city could opt to put a flat fee in place for all customers not based on usage.

If funding was based on an increase of property taxes alone, city property taxes would jump 51 percent, city leaders said.

Finally, under the sales tax option, the sales tax in Augusta would increase from 7.55 percent to 8.55 percent. The sales tax would help generate about $900,000 a year. As a result, the city would still fall short of the $1.1 million per year needed. That means an increase to water rates would likely accompany the sales tax. The average customer would pay about $3.87 more each month in fees, City Manager Bill Keefer said.

Even though the purpose of the sales tax would be to fund a specific project, it can not be implemented as a "special use" tax. That's because it will take the city more than 10 years of utlizing the tax to pay off the debt incurred by the project. The sales tax would have to be a "general use" tax. That means 90 percent of the revenue would go toward the water line project while the remaining 10 percent would go toward other community needs.

If voters approved the sales tax, it wouldn't go into effect until April 2013 and then the money wouldn't start rolling in until June 2013, Keefer said.

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