Claremore Daily Progress

June 6, 2013

Tax election set, portion will go for debt

Thacker, DeLozier support revenue shift to go for Material Services judgement pay back

Mark Friedel
Staff Reporter

CLAREMORE —

Rogers County Commissioners have made a significant change in how it will disperse a 1-cent road tax if passed on Aug. 13. They agreed on Thursday to commit 1/8 of the cent to pay off the county’s multi-million dollar judgement with Material Services.

Commissioners were forced to lay aside election results from a May 14 election that would have renewed a 1-cent sales tax, because the county did not publish legal notice of the election in a county newspaper as required by state statute.

Commissioners officially set a new election for Aug. 13, but this time voters will have the opportunity to renew the tax that will go to roads and  send a small portion of the anticipated $6 million commissioners receive annually to repay the county’s judgement.

The resolution approval allows for the question to be voted on during the Aug. 13 county sales tax election.

The remaining amount of the 1-cent tax will still be used for maintaining roads and bridges for the next 5 years.

Thursday’s resolution was approved by a vote of 2-1. Commissioners Kirt Thacker and Dan Delozier voted in favor of the resolution, while commissioner Mike Helm voted no.

“We just want to pay it off faster and there’s no down side to that,” said  Thacker. 

He said the goal of the resolution is to reduce the tax burden for Oologah, Chelsea, Inola and Claremore.

“The cities don’t get the money directly, but when we get this debt paid off then they can charge less tax, maybe getting more development coming.”

Before the vote, Helm made the motion to keep the one-cent tax as it was without any added reduction; however, no commissioner seconded the motion. 

Delozier said the reduction will impact the county by showing that the board of commissioners are making an effort to help pay this tax off. 

During the special meeting, commissioners discussed two reduction plans, a 1/6 of a cent reduction and the approved 1/8 of a cent reduction. 

According to information provided in the meeting, the 1/6 cent reduction would provide each of the three districts with more than $1,884,000 left available to be used on roads and bridges, while more than $1,130,000 put towards debt reduction. 

The 1/8 of a cent reduction would provide more than $1,950,000 for roads and bridges while providing $848,000 for debt reduction

The five-year impact of the 1/8 cent reduction will reduce the law suit debt by  $4,240,374, according to information from the Rogers County Commissioners office. 

According to information from the board of commissioners, 1/8 cent reduction will assist in having the total amount of lawsuit debt paid off in 10-11 years. 

Thacker said the estimate was made after looking at the history of debt reduction payments in the past.  

Delozier was in favor of the 1/6 cent reduction, but Thacker said with the obligations his district currently has, he would need the 1/8 cent.

Helm said he voted no because the county already passed a vote.

“This reduction is not going to do anything to decrease the years it takes to pay off the debt. For the next 12 years you’re going to be collecting for a 1/3 of a cent,” Helm said.

He said the reduction does not do anything to make that go away.

“Whatever money we put into it, you can only put against the principle. We have $4 million we’re going to put against it after five years and it won’t make the impact that take a 1/3 of a penny off,” said Helm. 

The county accrued the debt in 2004 after a jury awarded a $12.5 million judgement in damages for the inability to mine the Christopher Neal Begley Limestone Rock Mining Lease south of Oologah. 

Due to interest accrued during the civil appeals process, the judgement grew to approximately $32 million. Voters approved a one-third cent sales tax in 2012 to repay Material Services.