The City Commission of Arkansas City had a full agenda for its Aug. 15 meeting, including several items that will directly impact the city financially in the months and years to come.
City staff was informed that the implementation of the one-cent, 10-year SCKMC Sales Tax, approved by Arkansas City voters by a 4-to-1 margin on May 24, would be in conflict with state statute.
The verbiage that created the issue was “special purpose tax,” a designation used when creating the sales ballot question for residents to vote on in May.
Initial reports from the City of Arkansas City stated the commission would consider whether or not to sunset early the half-cent tax voted into existence in 2009.
City Attorney Tamara Niles, however, suggested during the meeting that the city file a document in Cowley County District Court, called a declaration of judgment action, for the purpose of designating the oldest sales tax as a general tax, not a special-purpose tax, as the State of Kansas interprets it.
Niles stated there are multiple statutes that support the action. “There is legal precedent,” she said.
She and South Central Kansas Medical Center legal counsel Otis Morrow are set to meet Aug. 16 with District Court Judge Jim Pringle.
“Has this been done before?” asked Commissioner Jay Warren.
“I don’t know,” Niles said. She could not find an example of a similar motion passing in Kansas, but Morrow said similar actions in other district courts might not be available to the public. Niles did say that the Kansas attorney general rendered an opinion in 2008 concerning a similar issue, but she thought that would take too long.
“Why did this happen?” asked Commissioner Dan Jurkovich.
Niles and City Manager Nick Hernandez both said the process of passing the sales tax question “moved too quickly.”
“I cannot blame the oversight or find fault on any one individual or entity,” Hernandez stated in a memorandum to city commissioners last week. “A significant number of individuals overlooked it, and I apologize for not catching it.”
The time it will take for the motion to move through the court system is dependent entirely upon the judge, according to Niles.
If the motion is approved by Pringle to re-designate the first sales tax, but the Kansas Department of Revenue does not abide by the ruling, the motion can be refiled to include the Department of Revenue. At that point, the judge could order the department to make the change.
This could result in a delay in implementing the new one-cent tax until January 2017, however.
Morrow pointed out that the citizens had spoken their minds regarding both taxes when they were passed in 2009 and 2016, respectively.
“We’re only human … things happen. I really appreciate Ms. Niles and Mr. Morrow looking into this,” said Mayor Duane Oestmann.
The commission voted 5-0 to authorize Niles to move forward with filing the appropriate paperwork with district court.