By KALEY CONNER

kconner@dailynews.net

At Thursday's Hays City Commission meeting, commissioners spent nearly an hour discussing the possible implementation of a community improvement district policy.

As provided for by a recently established state law, these districts are created to finance certain projects through special assessments, sales taxes or bonds. The higher taxes would be collected only in the district receiving the benefits.

"This legislation is very broad," City Manager Toby Dougherty said. "Anybody petitioning the city ... could create a community improvement district to fund almost anything, and that's pretty much how broad the act is."

The issue was tabled for discussion at future work sessions.

The state law was passed earlier this year, and a potential developer already has expressed interest in filing a petition to receive these benefits.

Missouri-based Ferguson Properties is considering development of a Holiday Inn Express north of Interstate 70, and wants to recover $2.5 million of the estimated $8.5 million project through a 2-cent sales tax, Dougherty said.

Current legislation does not place a cap on the amount of financial assistance received, and both public infrastructure and private projects are eligible.

Commissioners agreed local ordinances should more clearly define the parameters of such a district.

"This is so open-ended that we could be opening up a can of worms that we can't close up," Mayor Ron Mellick said.

It was suggested that any sales tax implemented in the project area could sunset in two years. State law has limited the sales tax amount to 2 percent.

The commission agreed that projects would qualify for the funding only if they invest a certain amount, which has yet to be decided. Vice Mayor Chris Channell suggested a cap be placed on the amount of funding based on that investment.

Such benefits would come in the form of reimbursement.

Mike Michaelis, executive director of the Ellis County Coalition for Economic Development, spoke in favor of granting liberal benefits to help recruit new businesses.

"The state law is 2 percent. Why cap it at any less than that when people will say 'I can go down the road and get something else?' " he said. "If you start restricting it, pretty soon you've essentially killed the whole intent of the law."

Commissioner Henry Schwaller IV expressed concern that higher taxes could deter the customer base.

"Just because a law is vague and weird and has really no boundaries, I don't think we should follow it," Schwaller said. "I think 2 percent is unusually high, and I think that people will have a bitter taste in their mouths."

After a policy is implemented, establishment of these districts would be decided on a case-by-case basis by the commission.

"As much as I don't want to overtax people, if this is what people want to do for their business to pay back what they're doing, they have the right to be able to do that," Commissioner Barbara Wasinger said.