Here’s a hypothetical that is drawing some discussion among those who follow Lawrence City Hall: Commissioners build a $25 million recreation center in northwest Lawrence, and successfully do so without raising anyone’s taxes.
But then, a few years later, city leaders go to the public and say the city is in desperate need of a new police headquarters facility, and taxes will have to be raised for the project, which has been estimated to cost between $20 million and $30 million.
If that day ever comes, Lawrence City Commissioner Mike Amyx isn’t sure how Lawrence residents will react. Amyx last week said he hopes his fellow city commissioners will take another look at whether a proposed $25 million recreation center should be the city’s top project at the moment.
“Before we sign the final papers on this project, let’s make sure we have our priorities exactly where we want them to be,” Amyx said. “We have a lot of projects coming up, and I don’t think we can afford to do a number of these at the same time and still say that the city is affordable.”
Amyx, however, is likely in the minority on the commission. City Commissioner Hugh Carter said he thinks it is inappropriate to pit the need for a recreation center against the need for a police headquarters facility.
Carter said leaders in the city’s Parks and Recreation Department have documented the need for additional gym and recreation center space for more than a decade. And now, the city has a funding source for the project as the city is paying off debt related to the city’s Indoor Aquatic Center and the Community Health Building.
Carter said when voters approved that countywide sales tax in 1994, there was an expectation a recreation center would be one of the projects it funds. Now with Kansas University officials offering to make the recreation center part of a bigger university sports park in northwest Lawrence, the timing will never be better.
“I think if we went to a public vote on this, it would be well supported again,” Carter said. “But I don’t feel the need to do that because we already have.”
The ballot language placed an emphasis on recreation projects, but it also was intentionally written in a way to allow the money to be used for any governmental purpose.
Amyx said that he recognizes the spirit of the ballot language, but he also noted it was 18 years ago that the vote was taken.
“It is possible priorities may have changed somewhat,” Amyx said.
The idea that the city may come knocking on the public’s door about a new police headquarters building is not totally hypothetical.
City staff members brought forward a proposal during last summer’s budget study session, including a city-hired consultant who recommended a new 40,000- to 50,000-square-foot headquarters building that likely would cost up to $29 million to build.
Police officials say the two buildings they currently operate out of are outdated and too small, and splitting the force creates numerous inefficiencies.
Commissioners didn’t reject the need for a new police facility, but they also didn’t take any steps forward on the project. Carter has been the commission’s strongest proponent for a new facility, and he said the community ought to be thinking about how it can do both a recreation center and a police facility.
“I don’t think we should view this as choosing one over the other,” Carter said.
Carter said he thinks a new sales tax would be the fairest way to pay for a police facility, since a sales tax would capture money from visitors and KU students who require services from the department. Amyx said he thinks a property tax would be the more likely way a police facility would be paid for.
City Commissioner Mike Dever has been one of the strongest proponents for a new recreation center — currently proposed to be 181,000 square feet with eight gyms and several other amenities.
He, too, said talk of a new police facility is likely. But he also said the timing of a new facility is very much uncertain. Whether a center is needed in two years or 10 years will make a lot of difference in regard to the financial impact it will have on the city’s budget.
“A police facility is a likelihood in the future,” Dever said. “The question is: What is it going to be like and when will the need reach the point that we can’t make do with what we have?”
It is not often that the city gets to talk about building a $25 million project without having to raise taxes. But all the numbers indeed suggest that the city currently can undertake a remarkably large number of projects without raising taxes.
In addition to the recreation center project, the city has budgeted for $10 million worth of infrastructure improvements for a new industrial park at the former Farmland Industries site. The city projects it can cover those infrastructure costs without increasing taxes. The city also is projecting to spend $300,000 a year for the foreseeable future to subsidize the operation of the proposed recreation center. That subsidy also isn’t projected to require additional taxes.
All told, the city has upwards of $40 million it can invest in the community without asking for new taxes.
“This is one of the few times I’ve seen where we have paid off several items and have some real flexibility to look at re-investing it in projects,” Amyx said. “But I think that means we really need to look at what our top priority is.”
The city has a rare bit of financial flexibility, in part, because the city has largely held the line on city spending during the recession and is benefiting from historically low interest rates that make debt to governments cheap. The city is in a strong position to act quickly to add new debt because its bond and interest fund has accumulated a healthy fund balance. At the end of 2011, the city’s bond and interest fund had an unused balance of about $8.5 million.
“I don’t think the community is aware of the financial position we’re in,” Carter said. “The whole national conversation is about how people are overspending. We’re saying now is the right time to build something, and that takes guts.
"But we’re OK here. We really are. It is not doom and gloom.”
Building an attraction
Dever has been one of the voices of austerity over his last six years on the commission, but he said there are dangers if a community spends too little.
“I think it is possible that we have spent so much time trying to maintain the level of service without tax increases that we may not have focused enough on some of the amenities that make people want to live here and stay here,” Dever said. “We have been really lucky for a long time, but it is going to take a little more effort in the future to convince people to make Lawrence home.”
Dever thinks a recreation center could help on two fronts. It could be an attractive amenity for residents. But it also is being designed to serve as a center for regional and national youth sporting tournaments, which is one of the reasons commissioners have resisted decreasing the size of the facility.
The city is betting the center will attract a significant number of tournaments, which in turn will create new visitor spending in the city. But this is also the part of the project where city leaders have to trust their ability to read the demands of the marketplace.
Dever said he’s confident the city will fare well in attracting tournaments. He’s spent the last seven years traveling with his family to youth volleyball tournaments, and he said interest in a Lawrence facility would be strong in that sport. Dever also counts KU basketball coach Bill Self as a friend, and Dever said Self has said a new facility would position Lawrence well to be a major community for youth basketball tournaments.
“I’m convinced there is a need and a demand out there, and there is room to add tournaments in Lawrence without a lot of risk,” Dever said.
Carter is convinced, too, and believes the recreation center is a piece of a bigger puzzle that will help the city tackle future issues like a police facility.
“I’ve always said this project only makes sense if we stay laser-focused on economic development and growing jobs,” Carter said. “If we grow more jobs, that helps make a lot of these issues in the future easier to deal with.”