Council holds public forum on capital improvement plans, tax increases

Members of the Vestavia Hills community gathered Tuesday evening to hear out city officials on a proposed capital improvement plan — and the funding it will take to make it happen.

The Vestavia Hills City Council hosted a public forum to discuss the infrastructure, facilities and community spaces projects that councilors determined are priorities going forward.

The group of capital projects, plus refinancing the purchase of the Gold’s Gym property, will end up costing nearly $58 million, and in order to cover the debt service, the council will consider raising the sales tax by 1 cent and the lodging tax by 3 percent.

Mayor Ashley Curry opened the meeting by covering the order of business, which included going through the highlights of the capital projects, the financing mechanism and the city’s current debt situation.

Curry then went through the various surveys and studies the city has employed over the last several years to get a picture of what citizens want.

In December, the city contracted with ETC Institute for a citizen survey, which had the largest number of respondents the city has seen in a survey of this type.

“It’s important to note that this particular survey, more than any other we’ve done, there were enough respondents to make it statistically significant,” Curry said.

The results, which were discussed in detail at the January strategic planning session the council held, put a focus on the city’s infrastructure, traffic and recreation facility needs.

City Manager Jeff Downes then took over the presentation by orienting the audience to the city’s general financial situation, as well as the financing mechanism the council has discussed so far to pay for the projects.

“We don’t have a lot of money to do extraordinary capital projects,” Downes said, referring the the general revenue the city takes in each year — about $1,000 per capita.

In order to complete all of the desired projects, refinance Gold’s Gym and provide contingency, the city will need to take out a bond for $58 million.

That bond will require around $3 million a year for debt servicing, Downes said, meaning the city needed to find another $3 million in annual revenue.

“If we are to add debt to this city, and we want to stay consistent with the ratios and metrics that we look at, we could not add more debt unless we had more revenue,” he said. “It’s as simple as that.”

The solution, which was discussed at a council work session and is on the agenda for the April 9 council meeting, would be to increase the sales tax by 1 cent, bringing the city up to the level of neighboring municipalities, and increase the lodging tax by 3 percent.

“We know that it is going to be a large addition to our general obligation debt, but the positive is that we do have a companion revenue source that can be dedicated to serve that debt, and only need to use 75 percent of the projected revenues,” Downes said.

City councilors were then given time to express their thoughts about the capital projects and the financing plan, beginning with Place 2 Councilor Kimberly Cook.

Cook said she began the process adamant that infrastructure needs be addressed before anything else.

“That’s what I have heard from the citizens, is that they want these things fixed,” she said.

Cook also said that she wanted it to be clear to citizens that their opinions and thoughts were being taken into consideration — such as the voiced concern that something be done to improve the New Merkel House.

“You have been heard, and you have had an impact on the plan that we have put together,” she said.

She thanked Downes and the Community Spaces Committee for working to put the plans together, and the community for participating in the survey process.

Place 4 Councilor George Pierce said he also wanted to thank the community, but additionally wanted to thank the previous city councils that paved the way for the plan in the first place.

“This is a tremendous step for our community,” he said, adding that he knows not everyone will be entirely pleased with the final outcome.

Mayor Pro-Tem Rusty Weaver and Place 3 Councilor Paul Head said they want people to look at the plans in their entirety before making a decision, and Head reiterated that it isn’t just about one sport or another.

“This is not about baseball fields. Wald Park is not about baseball fields … just go look at the plan,” he said.

After a brief intermission, the audience was given the chance to participate in an online public forum through the Vestavia Hills Listens program.

Participants were asked to key in any questions they felt were not answered by the presentation, as well as indicate whether they endorse or do not endorse the plan.

Several questions were in regard to the timing of projects, particularly the widening and addition of sidewalks on Crosshaven Drive in Cahaba Heights and what will be done with the civic center once the new community center is completed.

Others asked about how the additional debt will impact the city’s credit standing and financial policies, and what will be done to control operating and staffing costs of the new facilities.

Downes explained that with regard to the financial aspects, the city should remain in good credit standing, as the new revenue source projections come from a conservative estimate and account for potential economic downturn, and that there are options for additional programming revenue at recreation facilities in the future.

Timing, on the other hand, is less known, Downes said, because several projects, like the New Merkel House, are not even in the design stage, and others, like Crosshaven Drive, will require a lengthy right-of-way acquisition.

Survey respondents were generally in favor of the proposals, with 86 percent indicating they fully endorse the plan, 75 percent endorsing the expenditures and 75 percent endorsing the financing mechanism.

During the public comment period, business owner and president of the newly-formed Cahaba Heights Merchants Association Katherine McRee spoke.

McRee said the association is in favor of the tax increase and thinks the parks need to be improved, but that she and others are concerned that the infrastructure and sidewalk projects in Cahaba Heights and the Rocky Ridge Road area will not be a top priority, and that they hope they can be expedited if possible.

Others were concerned with possible negative effects on local businesses if the taxes are higher, as well as what will happen if Vestavia falls victim to the “Amazon effect,” where shoppers move online rather than shopping locally.

Downes said that Vestavia’s primary sources of sales tax revenue come from grocery stores and construction materials, which shouldn’t have issues and have seen an overwhelmingly good year so far.

Others, such as current Vestavia Hills Chamber of Commerce Board Chair Doug Dean and Former Mayor Butch Zaragoza spoke in favor of the plan, and the tax increase.

Zaragoza, who was on the council when the Community Spaces Plan first got underway said that personally, he doesn’t like the idea of adding debt to the city, but that it’s the “only way.”

“If we wait until we can pay for it, it will never happen in Vestavia HIlls,” he said.

The council will vote on the tax increases at the April 9 regular meeting. The meeting will take place in the council chambers at 6 p.m.