City Council moves forward with annexation

The proposed annexation of property located north of city limits and west of U.S. Highway 77 made it through a first round reading before the Beatrice City Council Monday, but not without a struggle as Oregon Trails Equipment expressed opposition.

The council approved the first reading 5-3, with councilman Dwight Parde, Gary Lytle and David “Pede” Catlin voting against. The annexation ordinance has to be read two more times before it is enacted.

During a public hearing about the annexation, Beatrice Mayor Dennis Schuster stated that the city would like to annex in the property, which Oregon Trails Equipment is located on. Schuster said the land is currently surrounded on three sides by property within city limits, now that the Northgate Crossing to the north of the property has been annexed in.

The property was not included in the last annexation of Northgate Crossing due to the fact the Beatrice Community Hospital and Health Center asked that it be excluded from its property annexation to avoid controversy, Schuster said.

The annexation also comes because the city will now provide city services to Northgate Crossing and would be able to provide services to that piece of property.

Rick Bennett, of Oregon Trails Equipment, said he understood where the city stood on the issue, but expressed opposition to the proposed annexation.

If the property would be annexed in, the implement dealer would have to pick up an additional 1.5 percent sales tax on parts, making it difficult to compete with other implement dealers in the surrounding area, including those in Kansas, that either have less sales tax or no sales tax on equipment parts and machinery, Bennett said.

Currently, Oregon Trails does not have to charge sales tax on machinery as it goes on personal property tax. But, sales tax, which is currently at 5.5 percent, does apply to the sale of parts.

Currently, Oregon Trails Equipment, among the five John Deere implement dealers in the area, including the one in Marysville, Kan., is fourth in the sale of parts. Marysville, Kan., is number one in parts sales.

In Kansas, there is no sales tax on parts or equipment, Bennett said.

Bennett presented  information from a study done by a professor at Creighton University that demonstrates what happens to agriculture businesses that are given an unfair advantage.

In the first few years, the city of Beatrice will probably gain from the tax revenue, Bennett said. However, the study shows in the next 10 to 15 years, the city would actually lose tax revenue by not adding a level playing field.

“Basically, that’s our point,” Bennett said. “We’re not asking for anything special, we’re just asking for a level playing field.”

Mark Buhr, also of Oregon Trails Equipment, asked whether or not the city was getting ahead of themselves with the annexation, especially since the hospital has not even officially decided whether it will build or not.

Councilman Alan Fetty said the council cannot take that into consideration, only that the land in question is surrounded on three sides by property within city limits.

At the time the business was built, Fetty believed the property should have been annexed in then because the property was adjacent to the city.

“If you wanted that level playing field, you should not have built adjacent to the city,” he said. “You should have obviously been a few miles to the north because then we wouldn’t be here.”

Bennett asked what benefits Oregon Trails would receive with annexation.

The annexation would allow for city services, such as water, sewer and fire protection, Fetty said.

Bennett noted that their business already has some of those services, such as water and sewer, and doesn’t need they city’s services.

Councilman Dwight Parde expressed opposition to the annexation.

Parde also asked about what affect the annexation may have on the 23 employees that currently work at Oregon Trails.

Bennett said it would be difficult to predict what consequences the increased sales tax might have in the future.

Councilman Gary Lytle questioned whether or not the annexation was going to be a farmer friendly move.

Councilman Jason Moore noted that the city needed to look hard at this annexation because if it isn’t done now, it would likely be necessary in the future.

Councilman Calvin Carey said the additional tax on farmers should be considered before council passes the annexation.

The annexation has to be read three times on three separate occasions, Schuster said. The council will consider this issue over the next six weeks.

Councilman Ted Fairbanks asked that a representative from the planning and zoning committee be present at the next city council meeting on Dec. 15 to express views on the annexation.