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Archive for Monday, May 16, 2011

Property taxes, water rates and employee health plans the big issues for City Commission’s 2012 budget talks

May 16, 2011

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It is budget season at Lawrence City Hall, which means it also is a season full of questions that often have dollar signs attached to them.

Commissioners at a Tuesday afternoon study session will begin crafting a budget for 2012, and they’ll do so with what has become a standard warning from the city manager.

“It will be very challenging,” City Manager David Corliss said. “I think it will be difficult to cut more personnel and equipment expenses without impacting service delivery.”

In other words, cuts that may come to the 2012 budget are more likely to be noticed by residents than those that have been made in past budget years.

How much residents will notice likely will depend on how city commissioners answer the questions. Here is a look at several questions that commissioners will face this summer:

• How much will your property tax rate go up? There will be a significant property tax rate increase at City Hall for the first time since 2003. Voters last year approved a 1.5 mill levy increase to fund an $18 million expansion of the Lawrence Public Library. That increase will begin showing up in the 2012 budget. But a bigger question is how this City Commission elected last month feels about property taxes? The last City Commission was loath to raise the mill levy, but two new faces have joined the group. They’ll get a test right away — new Police Chief Tarik Khatib is asking for $1.2 million in new funding to add police officers to the force. Funding that request likely would either take a brand new sales tax or an increase in the property tax rate. Add the police request and the already-approved library project together, and that would be about a 3 mill increase in the city’s property tax rate. That equates to an extra $69 a year in property taxes on a $200,000 home.

• What will give with the city’s water and sewer rates? Try this on for size: The city sells less water now than it did in the late 1990s. The conservation movement may be good for the environment, but it has been bad for the city’s bottom line. The city is projecting water and sewer revenues to come in $1.9 million short of budget in 2011. City commissioners last year went against staff’s advice and did not raise water and sewer rates. Corliss isn’t saying what type of water and sewer rate increase his staff may recommend — but when asked whether a double-digit rate increase could be on the table, he didn’t rule out the possibility.

• How mad are commissioners willing to make city employees? It seems city employees may get some news they won’t like to hear about their health insurance plan. Corliss wants the commission to at least have a discussion about making city employees pay more for their health insurance, and increasing their deductibles and out-of-pocket expenses. The commission is expected to consider a proposal that would require city employees to pay $11 every pay period (bi-weekly) for their health insurance. Now, city employees don’t pay any premiums for their insurance, although they do pay to have a spouse or their family on the city’s plan. But the commission also will consider changing the city’s health insurance system to a High Deductible Plan that will increase the amount of out-of-pocket expenses employees have to pay. If the city doesn’t make any changes to the health care plan, the city’s health care expenses are expected to rise by about $1.2 million in 2012.

• How long will it take to reach a deal with the city’s police and fire unions? The city’s police and fire unions have contracts that expire at the end of 2011. It is a good bet that health insurance issue will be discussed as part of the negotiations for a new deal. But in addition to that, the city last year implemented a new overtime policy that cuts back on the amount of overtime the city pays. The city wasn’t able to apply that new policy to police and fire unions because they were under contract. Already, the City Commission has had two lengthy executive sessions to discuss fire and medical negotiations.

Tuesday’s budget study session — which begins at 3 p.m. at City Hall — will be just the first of many discussions this summer. Commissioners will have a better picture of the city’s revenue situation by June, Corliss will present a recommended budget by early July, and commissioners will approve a budget in August.

Comments

nativeson 2 years, 11 months ago

Water and sewer rates should continue to be benchmarked against surrounding areas. Water rates have historically been fairly low and sewer rates have been high. Wholesale water rates need to be competitive to sell more water to surrounding areas. The marginal cost of selling water is very low, and it covers fixed costs.

I am hopeful that the City Commission will hold the line on the mill levy. Between the library bond issue and Douglas County it will go up. It may require some structural changes necessary to scale back local government.

The City must charge something for health care to single employees. They do not require any premium payment for single coverage now which is way out of the norm. Costs will not be controlled until all employees have to pay something for their health care. This represents about 30-35% of the population that pay $0 for single coverage. Family rates are still well below the State of Kansas.

Police and fire budgets have expanded even through the most recent budgets that have produced a surplus in the general fund. The reductions have come from other areas. The desire for more resources for police and fire in unquenchable. They never think in terms of taking resources from other areas to address deficits in areas of needs. It is always about more. They will not accept a change in overtime rules, and they will push for range increases. It will be the cost driver in the budget that raises the mill levy over and above the library bond issue. They provide a great service to the community, but in the end they take care of thier own at the expense of others.

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Chris Ogle 2 years, 11 months ago

When will we (taxpayers) say NO??? Enough is enough.

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puddleglum 2 years, 11 months ago

sewer charges are already ridiculous.

water usage is down.......please look elsewhere for your money.

sewer charges need to go DOWN! water bill is silly already.

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dog_owner 2 years, 11 months ago

My husband works for the city and we pay a lot for health care as we have our family on his plan. The rates already increased the past 2 years for us as well. As the article stated it isn't every employee who has no premiums to pay.

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toe 2 years, 11 months ago

Raise fees, taxes, etc. It is so easy in this town. The government workers always support higher everything.

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Kontum1972 2 years, 11 months ago

its time for a lynch -mob folks....

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1julie1 2 years, 11 months ago

State employee premiums will probably be rising even more. According to the legislative budget wrap-up story in the Capital-Journal: “State workers didn't receive a pay raise, but they will be asked to pay a health insurance surcharge." Perhaps the JW could find out a little more about this detail stuck into the state budget (apparently) at the last hour?

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Alceste 2 years, 11 months ago

Why should City employees not be the recipients of the same type and style of health care benefits the state affords Kansas civil servants? Why are City employees exempt from changes in their health plan? Yes, the changes end up costing the employee a pittance which are now "free", but still....I'm just saying.....why are state workers getting one "class" of health benefits and City of Lawrence workers are getting a "higher tier" of health benefits? Incredible.

Wouldn't it make a whole lot more sense for State, County, and Municipal workers to all be getting the same benefits? Such a plan would enable the bean counters to negotiate from a much stronger position with health insurance providers and everybody comes out a winner it would seem. I suppose such a concept is too much like right because it would entail true leadership; work on the part of the various "stake holders"; and coordination between three different aspects of government within the state of Kansas.

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Richard Heckler 2 years, 11 months ago

Perfect example:

"That has not been good for the bottom line. Based on the first four months of the year, the city is projecting that water and sewer revenues will come in $1.9 million short of budget in 2011. As a result, water and sewer expenses are expected to exceed revenues by about $830,000. The city has a fund balance for water and sewer that can easily cover that shortfall. (The fund has about $14 million in it.) But utility leaders get worried anytime rates don’t cover the cost of services. "

Why does city hall continue to approve more and more new residential which is in essence creating more demand and requiring more and more water and sewer lines. In general creates more and more demand on city services across the board.

Adding miles and miles and miles of new infrastructure is like adding miles and miles and miles of new taxes. In a bedroom community this is not expanding the tax base it is expanding our tax bills.

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Richard Heckler 2 years, 11 months ago

Why does city hall continue to approve more and more new residential ?

Our city's current budget crunch could easily be tied directly to infrastructure expenses needed to serve new housing developments. The community is way over extended in this regard.

If residential growth paid for itself and was financially positive, we would not be in a budget crunch. But with increased numbers of houses you have increased demand on services, and historically the funding of revenues generated by residential housing does not pay for the services, they require from a municipality.

Lawrence,Kansas continued business as usual in spite of the wasted economy. How smart is this?

There are 9 million homes on the market and a large number of new foreclosures on the immediate horizon. This does not represent a healed economy.

The city could fix existing sidewalks and streets throughout the older parts of Lawrence. This does things:

  1. It keeps people working

2 It does not add miles and miles of new infrastructure that which we taxpayers are held responsible.

Should our water be a source for new dollars to support reckless management and reckless growth?

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cowboy 2 years, 11 months ago

Here we go again with Corliss throwing out firebombs before the budget hearings.

A few thoughts...

Water & Sewer - If were in a budget shortfall why are we supplying all the outlying RWD lines. Make the department smaller and meet the needs of Lawrence. You obviously have raised the cost of water so high that you have decreased usage. My water bill is as large as my electric bill. Now thats just wrong.

While you're at it you can sell the 560 acres you bought south of town for the new plant that we don't need.

What prevents you from not initiating the library construction ?

Possibly you could look at all the money burning projects you have around town like the T , who still has no advertising on them , who still operates a incomprehensible route across town , and who we actually raised a sales tax to support.

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