Sales tax revenue fails expectations
City still on course to repay debt for Tongnoxie Water Park in 10 years
City officials say they are still on track for paying off the new Tonganoxie Water Park in 10 years, but sales tax revenue has come in lower than expected.
On Tuesday, Kathy Bard, assistant city administrator, said the city has collected $269,145 in revenue since the three-quarters of a cent sales tax increase to fund the park started in October 2007. That was short $45,438 from what was expected to be collected by this time.
“We’ve already received enough to pay the debt for this year,” Bard said. “We thought we would be able to pay the debt off early, but we may need to pay the whole 10 years.”
The slowing economy has dropped sales nationwide, but Bard said the biggest blow to their sales tax revenue has come from the lack of new construction in the city.
She said the sales tax revenue from construction materials the city usually receives has dropped, but sales tax from local retailers has increased.
“People are buying local,” She said. “They are going to B and J grocery store instead of driving to Bonner Springs to get their food.”
It is still unknown whether the pool itself will become profitable. A financial report for the pool’s two months of operation was given to the city council during an Oct. 20 meeting.
The report stated that the pool had $77,759 in receipts, which was 99.7 percent of the projected revenue for an entire season of use. It also stated $101,161 was spent to run the pool. That amount was also 99.7 percent of the projected expenses. These expenses included about $14,000 in computer equipment that will not be in expenses next year.
Bard was hopeful that by next year, after a full season of pool revenue, adjustments in expenses and possibly increases in admission fees may tip the balance and actually make the pool profitable.
But for now she expects the city will be able to keep up with the pool payments.
“Right now the city is doing well.” Bard said. “We’ve budgeted conservatively. If it were to continue doing this for two or three years we would have to start doing something differently.”