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Council considers appropriating CID overcollections

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Last edited 1:47 p.m., July 17, 2018

A community improvement district has been collecting sales tax revenue past the agreed-upon termination trigger, and now the city has a bucket of money to spend, Springfield City Council members learned in a meeting last night.

A public hearing bill proposes to reinvest the funds in additional street and traffic improvements within the CID around the Hy-Vee grocery store at Kansas Expressway and Battlefield Road. City officials entered into the Kansas Battlefield CID agreement on June 28, 2010, ahead of the West Des Moines, Iowa-based grocery chain’s construction of the 86,000-square-foot, $17 million store at 1720 W. Battlefield Road. The CID collected a half-cent sales tax in the district to reimburse the developer’s public improvements required by the city. It was set up to terminate in 15 years or upon repayment of the reimbursement costs, which amounted to $600,000.

Only problem, the developer met the reimbursement tally, but the CID continued to collect the sales tax to the tune of $225,200. City officials say the pace of repayment was much quicker than expected.

“This CID paid off the improvements in about four years,” said city Economic Development Director Sarah Kerner. “This is kind of a good news story.”

Council approved the petition to terminate the CID on Oct. 12, 2015. Prior, the CID funded public improvements including construction of West Montclair Street to the south of the store, a traffic signal at Battlefield and Kansas Avenue at the eastern corner of the Hy-Vee property, and new turn access off of Kansas Expressway.

The collections overage was discovered as the state auditor processed the CID closure, Kerner told council.

“The Department of Revenue only begins and ends taxes quarterly, so in order to ensure the full reimbursement, it ended up collecting inadvertently,” she said.

Kerner said the Kansas Battlefield CID termination agreement included a plan for how any excess sales taxes should be distributed. The bill heard last night seeks approval for the city’s Public Works Department to spend the transferred funds “to benefit the real property which was formerly a part of the district.”

“We now have the funds and Public Works has compiled a list of projects,” she said. “They have more projects than they have money. But they want to be ambitious, if they happen to get low bids.”

Public Works officials have presented 13 potential projects, which range from adding fiber optic communications on Battlefield, estimated at $80,000, to $30,000 in stormwater improvements and $2,500 for flashing yellow turn signals.

The funds may only cover the first eight prioritized projects.

“The idea is to bid the projects in order of priority until all the money is spent,” Kerner added.

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