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[Archived] Siloam Springs Board looks at sales-tax hike

| News | January 04, 2014

Board looks at sales-tax hike

By Hannah Nielsen Staff Writer
Posted on Tuesday, July 5, 2005
Benton County (AR) Daily Record
SILOAM SPRINGS - Siloam Springs city board members at a Tuesday workshop
almost exclusively discussed a new sales tax as a means of financing a
new wastewater treatment plant. 

At the meeting held to consider funding options for the project, city
leaders discussed guaranteeing a loan to pay for the $16 million to $20
million plant with a new 1-cent sales. 

Other options include a water-rate increase or a mix of a rate increase
and a sales-tax increase. 

City officials said they are also hopeful about the prospect of federal
and state money for a portion of the project, but Siloam Springs should
be ready to fund the entire project locally until a commitment is
received from other entities. "I think (sales tax) is the fairest tax,"
said Sue Anglin, a member of the Siloam Springs Board of Directors. 

Funding the project with a rate increase, or even half of the needed
funds with a rate increase, would easily double rates for residential

The board approved a pilot project June 21 to test watertreatment
companies side by side before choosing one to complete the plant. 

Siloam Springs contracted with Oklahoma to begin building a new
plant in 2007 and have it in use by 2009. 

Oklahoma adopted a limit on phosphorus in scenic rivers within its
borders, and such laws are federally binding on surrounding states from
which the rivers flow, said David Cameron, city administrator. 

Siloam Springs' 2003 contract with Oklahoma requires the city to reduce
phosphorus output from the wastewater plant to a maximum of 1 milligram
per liter. In 2012, Oklahoma will review its standard, and may decide to
enforce the 0.0375 milligrams per liter standard it has already adopted,
Cameron said. "They're very adamant about their streams," Cameron said. 

He said building the best plant, which will reduce phosphorus to below
the most stringent requirement, will help the city avoid any lawsuits,
like one Oklahoma filed against northwest Arkansas poultry companies
recently. "We're a likely target," Cameron said. "Decatur got sued and

City officials met with Oklahoma and Arkansas congressional delegates in
May; they learned the city has already missed the chance for funds in
2006. They were advised to prepare now for 2007 appropriations,
communicate progress and be able to articulate why the project warrants
federal funding. 

If state or federal funding becomes available, it could reduce the length
of collection of a new sales tax. 

Leaders also discussed potential local beneficial uses of the treated
water, including watering golf courses and clearing Sager Creek. "The
algae issue should become null and void," he said. 

A 1-cent sales tax would generate about $2.5 million in 2005, according
to city projections. 

The board also considered asking voters to approve more than the
six-tenths of a penny sales tax required to pay for the plant, and to
include other projects, such as trails, sidewalks, drainage projects, a
regional park, a fire station and an electric substation. 

The board intends to hold several public hearings before requesting a
vote on a proposed sales tax