It’s OK to feel optimistic about the economy again — at least that was the message out of Lawrence City Hall on Tuesday.
Commissioners gave preliminary approval to their most aggressive budget in recent years: a $185.6 million spending plan that relies heavily on the economy improving at a quicker rate in 2014.
“I do have a level of optimism about the community’s economy,” City Manager David Corliss told commissioners. “But we have optimism based on facts, not just hope. That’s why I think we can adopt a budget along these lines.”
Commissioners unanimously approved increasing expenditures by about 6 percent and raising the property tax mill levy by 0.5 mill. But the budget also calls for dipping into the city’s cash reserves to the tune of about $1.5 million to balance the budget.
But as commissioners approved the 2014 budget, they said they were betting that the city ultimately wouldn’t have to use cash reserves because they think the local economy is poised to produce sales tax and other tax revenues at amounts higher than what is called for in the budget.
“I see a lot of indicators pointing to an uptick in the economy,” said Mayor Mike Dever. “I had the feeling of doom and gloom in 2007, and now I’m seeing the signs that are pointing to it going the opposite direction.”
Dever said he’s hearing reports of home prices rising again, construction activity increasing, and a growing interest in new retail activity, all of which could produce greater tax revenues.
Regardless of what the economy does, property owners will see a slight increase in their tax rate in 2014. The budget calls for a 0.5 mill increase, which will result in an $11.50 per year increase in property taxes on a $200,000 home.
City Commission briefs
Lawrence city commissioners on Tuesday agreed to explore a $500,000 financing arrangement with the Lawrence Community Shelter.
The shelter is seeking the city to take over $500,000 in bank debt that it has on its shelter building in eastern Lawrence. As proposed, the shelter would enter into a contract to repay the city at a below market interest rate for a number of years that hasn’t yet been determined.
The item came up as part of the city’s 2014 budget discussions, but the $500,000 proposal wasn’t included in the 2014 budget because it is possible the deal could happen in 2013, City Manager David Corliss said.
Corliss said the city likely would use cash reserves from a variety of accounts to pay off the $500,000 bank loan. Commissioners took no votes on the issue, but a majority of commissioners indicated support for the proposal, and directed Corliss to begin crafting language for all the parties to examine.
Commissioners agreed to provide $25,000 in funding for a local food bank Just Food to buy a refrigerated truck.
Commissioners approved the funding request on a 4-0 vote. Commissioner Jeremy Farmer abstained from the vote because he is the executive director of Just Food.
It originally was thought the truck could be bought with funding from a federal Community Development Block Grant. But when it was determined the truck did not qualify for the grant, city staff members recommended a funding swap to accommodate the purchase.
The city will use the federal CDBG dollars to do $25,000 in previously-budgeted sidewalk repair work, which is allowed under the grant program. That will free up $25,000 in the city’s general fund to purchase the truck, which will be used to transport meat, dairy and produce donations to the food bank.
Commissioners unanimously approved the site plan for the new multistory hotel and retail building at the southeast corner of Ninth and New Hampshire Street.
The site plan approval clears the way for an 11:30 a.m. ground breaking ceremony on the site. The project is expected to be under construction for the next 15 months.
The budget also calls for an approximately 5 percent increase in the average water and sewer bill. The monthly trash bill for residents also will increase by $2.81 per month in October 2014 when the city begins offering curbside recycling as part of its standard residential trash service.
But between the mill levy increase and the reliance on cash reserves, commissioners were able to craft a budget that provided new money for a variety of projects and organizations. They include:
• The Lawrence Humane Society will receive an extra $50,000 in city funding. Corliss had recommended a $20,000 increase, but commissioners added $30,000 to the recommendation as they expressed a willingness to raise the mill levy slightly more than what Corliss had recommended.
The Humane Society had sought an $80,000 increase, and leaders on Tuesday expressed disappointment that their full funding request wasn’t met. They said a recent analysis shows the society is currently losing money on the animal shelter services it provides to the city.
• The Lawrence Public Library received $140,000 in new funding to help as it moves into the expanded downtown library in mid-2014. Corliss had recommended a $100,000 increase, but commissioners increased the amount, which will be used for additional staffing.
• The Lawrence-Douglas County Health Department will receive $14,000 to cover the cost for lab tests for several sexually transmitted diseases. State budget cuts had eliminated funding for the tests.
• The Community Health Building — which houses the health department, Bert Nash Community Mental Health Center and other agencies — received $60,000 for security upgrades. The county is expected to also provide $60,000 for the upgrades.
• $120,000 to help the Johnson County transit department operate the popular K-10 Connector bus service between Johnson County and Lawrence. Commissioners agreed to put the money in their budget, but said they only would spend it if Kansas University and Johnson County Community College also agreed to financially support the service. The bus hauls a large number of students to the two campuses.
Commissioners did not include money in the budget for metal detectors or security staff for City Hall or other city buildings. A new state law will allow holders of concealed-carry permits to take their guns into public buildings unless the owners of those buildings show a security plan to keep out all guns. That has been thought to mean that governments would have to equip buildings with metal detectors and security staff if they wanted to keep out concealed guns. But commissioners held off on budgeting money for the security measures because the city attorney said she now believes the city has a good chance to qualify for a four-year exemption from the law. The exemption process will require the city to create a formal security plan for each building it wants to exempt, but the security plan does not require the costly metal detectors and security staff, she said.
Commissioners — between an afternoon study session and their evening meeting — met for about three hours on the budget and heard comments from about 10 residents, most of them supporters of the Humane Society.
Commissioners spent a good amount of their time discussing the fiscal merits of dipping into the city’s cash reserves, or fund balances as they are called. The city is projected to have a fund balance in its general fund of about $12.8 million at the end of 2013. Under the budget agreed to Tuesday, the fund balance could drop to somewhere near $11 million to $11.5 million, which is near the lower limit called for in the fund balance guidelines used by bond rating agencies.
Commissioners are scheduled to hold their formal public hearing on the budget and give final approval at their July 23 meeting.