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Lawrence and Douglas County

Lawrence and Douglas county

City approves budget with slight property tax increase, great hopes of improving economy in 2014

July 9, 2013

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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.

Comments

oneeye_wilbur 9 months, 1 week ago

Mr farmer and other commissioners, where do you propose I get the revenue needed to pay more in taxes?

Lawrence is not friendly to residents. If the economy is so improving, why is an increase in property taxes needed?

Sidewalks? Where are those to be replaced?

Mr farmer, the city has done a derelict job at 14th and Tennessee , it was never finished. Mayor Dever can't get the job done, maybe Mr Riordan who lives nearby can and you mr farmer who knows full well by now what CDBG funds can be used for, but are not!

Face it! Lawrence is a ghetto east of Kasold. Fixing old house and registration is not the answer if the doesn't keep it's end of the bargain.

Downtown isn't even that nice, get off Mass and go to the backside of bldgs.

The parking lots are trashy. The shrubbery and trees are overgrown. And those lots are the front door of businesses.

Instead the commission spends more and more on fluff and studies. How can any commisioners in good faith spend money on a study to attract retirees. How? You should be ashamed.

2

Steve Jacob 9 months, 1 week ago

2014 might bring 5-6% 30 year mortgages and $4+ gas, that will slow a hot economy.

1

FB 9 months, 1 week ago

The State of Kansas is going to have a big deficit to correct due to allowing some not to be taxes on income. Many legislators will probably benefit from this as well. I am sure they voted in their best interests, not ours.

2

FB 9 months, 1 week ago

The director at the humane society received a larger salary than her predecessor. Government/City/Nonprofit organizations seem to do pretty well getting increases in wages over the last few years while the economy has limped along. There is only so much that can be squeezed out of the taxpayers before the well runs dry.

1

FB 9 months, 1 week ago

The only increase is that people will move away from Lawrence!

0

FB 9 months, 1 week ago

This town sure gives a green light to building apartments...just carte a blanche!

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FB 9 months, 1 week ago

Isn't it supposed to be the other way around that if the economy is improving why do taxes need to be increased. In other words, more money should come in from their so called improved economy. By the way, I didn't know the city hires fortunetellers. This city is spending money like water. That sports complex will become a money pit for the taxpayers of this city.

2

Ladybug2 9 months, 1 week ago

I agree that the City shouldn't be taking on the mortgage of the Community shelter. It seems as though the shelter just keeps asking for more and more at the expense of the working tax payers.

3

cheeseburger 9 months, 1 week ago

Anyone else believe the Corliss experiment has run its course and it's time for a change in city leadership?

Basing budgets on whims and feelings instead of reality is dangerous practice.

0

Jean Robart 9 months, 1 week ago

What did they vote regarding Just Food? I didn't see that anywhere in the article--which i read three times to be sure.

0

Tomato 9 months, 1 week ago

Couldn't afford that extra $30,000 for the Humane Society because the Library needed $140,000 to "help it expand." 18M just wasn't enough help.

1

Dave Trabert 9 months, 1 week ago

The headline says there is a "slight" property tax increase but the story says spending is going up 6%. Taxpayers deserve to be told how much actual tax collections will increase; the mill rate is only a small part of the story.

Property taxes increased 134% in Douglas County between 1997 and 2012 while the mill rate only increased 18%. Local government needs to be honest about the amount that taxes will increase as a result of their spending decisions.

Historical info on property taxes by county (including all jurisdictions within a county) are at http://www.kansasopengov.org/PropertyTax/PropertyTaxSummary/tabid/1573/Default.aspx?County=Douglas

0

rlsd 9 months, 1 week ago

While I am thrilled to hear the economy is going to improve, I do not believe it and my BUDGET will not count on it until it is a reality instead of a pie in the sky to allow spending money that is not in the bank!!!!! Sure wish I could!

3

Pheps 9 months, 1 week ago

How can the economy improve if businesses are shunned away from Lawrence by a majority of local residents?

0

KU_cynic 9 months, 1 week ago

In the long-run Lawrence's economic fundamentals will no doubt improve, but . . .

I don't see much improvement for home prices in the next year, as there's too much supply, no indications of population increase to drive demand, and a lot of competition from the over-supplied rental market; at least renters will have more disposable income to spend as rents are likely to be suppressed for many years. Mortgage rates are also going back up, hurting housing affordability.

Also, KU spending and salaries will increase only moderately, and enrollments of students are flat. The rest of the government employee sector (school district, city, county) may grow some, but that's just take from Peter to pay Paul growth that can't be sustained without private sector income growth.

Utility bills (electricity, water and sewer, trash collection, etc.) are going up. So are health care costs. Disposable incomes that fuel discretionary spending and sales tax revenues can't be expected to increase much.

In short, I don't see how the city of Lawrence can bet on the come with regard to growth in the tax base.

1

Richard Heckler 9 months, 1 week ago

Approving a budget based on rumors that the economy will improve significantly is like playing Wall Street. Increasing taxes based on the same rumor is risky business X 2.

I see nor hear anything of the sort. Topeka,Kansas and Washington D.C. are still pulling tax dollars aka money from the economy. Wall Street banks are still having fun with taxpayer bailout money in the form of bonus packages...... NOT putting this money into the economy.

Wall Street activity should never be used as an indicator. Housing prices should never be used as an indicator. New housing starts should never be used as an indicator.

The one and only indicator should be the report that 10 million UNEMPLOYED workers are back to work making no less than $75,000 a year. That is nowhere in sight.

Another indicator could be that IMPROVED Medicare Single Payer insurance has been implemented for that would definitely stimulate new business opportunity..

1

Matthew Herbert 9 months, 1 week ago

What did they decide re: the $10,000 to Eutin for a music festival?

0

no_thanks 9 months, 1 week ago

A mortgage against the building. Damn autocorrect.

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no_thanks 9 months, 1 week ago

Why would the City take on the debt of the shelter? This is not the purpose of City Hall. Will they file a mortgage against the buying? Will the City take action in the event of default? My guess is no. Family Promise continues to help the homeless without tipping the public fund spigot. Why can't the shelter?

1

ljreader 9 months, 1 week ago

"Slight" increase in property taxes- Slight increase in electricity- not even the slightest increase in hours or wages., nor the slightest interest in retiring here, that alone encouraging others to spend their retirement here. In fact, for those of us who want out, it will be a miracle to sell our houses without being hung out to dry.

3

oneeye_wilbur 9 months, 1 week ago

So who pays the insurance on the truck? Repairs? Replacement of the truck? Retirees are not coming to Lawtence!

0

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