Cap tax largely a business issue for local contractors
Date posted: October 22, 2013
SHERIDAN — The Capital Facilities Tax renewal that’s up for election in Sheridan County Nov. 5th is largely a business issue to Sheridan’s local contractors.
When city funding enables infrastructure upgrades, that means someone will get to do the job.
An indication of the cap tax’s potential future impact can be deduced by looking at what it has done in the past.
Amy Bouley, owner of Fletcher Construction, said her crews have been busy over the past year working on Dow and Jefferson streets near the YMCA as well as renovations at the water treatment plant.
“Both jobs were definitely a big chunk of what we have been doing the last couple of years,” Bouley said, adding that contracts from the city comprise approximately 30 percent of her company’s workload.
“Since the recession, we’ve scaled down. We used to be 50, but now we have 28 employees,” she added. “During (the recession), jobs from the city kept us in business.”
Like Fletcher, many local construction firms count on a steady stream of work from the city.
General Manager of Intermountain Construction Materials Jeff Dahlen said his company currently has 45 employees in Sheridan. Without city contracts, he estimates he would have to reduce his workforce by approximately 65 percent.
Sheridan City Clerk Scott Badley said whether a project is directly funded with cap taxes isn’t as relevant as whether the city has the taxes to leverage other funds and free up resources for maintainence. The availability of money the tax provides enables the city of Sheridan to complete more projects by freeing up funds, which in turn means the city can hire contractors.
“I don’t doubt that it is a benefit to all the contractors — the major contractors and their subcontractors,” Badley said.
“There’s a state law that requires projects over $35,000 to be bid,” Badley explained. “There’s an in-state preference for local contractors. They have a 5 percent preference.
“It puts the local contractor at a competitive advantage if everything else remains the same,” he added.
In a geographically large state like Wyoming, an in-state preference can still mean contractors could be from a long way away. However, Badley said that’s usually not the case.
“Typically, these projects don’t get a lot of input from people outside our region,” he said. “Most of the contractors in the last six to eight years are local within the county or within our region. Occasionally, it goes to an out-of-state company, but very rarely.”
In addition to facilitating more projects per fiscal year, Badley said the cap tax enables the city of Sheridan to get more state funding from the State Loan and Investment Board, the Department of Agriculture, the Wyoming Water Development Committee and other funding sources.
“Money from Cheyenne comes with strings attached,” he said. “That means you have to have some local money in the game before they will provide money for these projects.”
Badley said the required match to secure grants from the state is usually 50 percent. Badley also said that while the majority of state sales tax collected locally is not specifically designated for the Sheridan area, cap taxes are an exception to that rule.
Badley said the state keeps 69 percent of the four percent state sales tax collected in Sheridan County. However, only one percent of cap taxes go into the statewide pot — the other 99 percent comes straight back to Sheridan county to be applied toward approved projects.
Chair of Sheridan’s newly formed Political Action Committee, Citizens for Infrastructure Improvement, Dave Engels moved to Sheridan just in time to see the first cap tax pass more than 20 years ago. At that time, he served as project manager for the original Sheridan Area Water Supply project. He said after the initial SAWS work was done, the emphasis moved to replacing existing infrastructure, rather than creating it anew.
While many sections of town have been remodeled and upgraded thanks in a big part to cap taxes, there are still areas in town surviving on archaic infrastructure that’s on its way to failure.
On-site Engineer overseeing the Wyoming/Park Street Project Nathan Rager said his crews weren’t sure what they would find under the old streets they’ve now almost finished remodeling. He said it was definitely time they got to replacing the water and sewer lines.
“We found lead pipes going to some of the houses, and there was really bad buildup inside the pipe, especially in the water lines,” he said. “The sewer lines were old, clay tile, which isn’t very efficient at all. It leaks.”
Rager’s description that it was definitely time for infrastructure improvements rings true for many of the ongoing infrastructure improvements that have been completed or are currently in progress.
“Some people say they’re against the tax because we should keep the money in our own pockets and spend it here in the community,” Engels said. “But we can use this tax to triple the money that comes in to our economy.”
Badley said the funds multiplied by cap taxes have a lasting turnaround, especially when it translates into the form of wages to workers who either have families here or even just live in Sheridan until the job is done.
“Most economists say it turns over five to seven times in the community before it exits,” he said.
“Wyoming is unique in that there are so many funding agencies available,” Engals said. “But you must have the match or there’s no access.”
Badley said the last few times the tax has come up for public election, it has been approved by voters in the high 60th percentile.