Regardless of whether voters decide to build a new $30 million police headquarters, a property tax increase is going to be hard to avoid in 2015.
At least that’s the current view of Lawrence City Manager David Corliss.
A new report from City Hall estimates that a 1.5 mill property tax increase will be needed in 2015 just to maintain the city’s existing level of services.
“But I think it is fair to say the city manager will recommend a budget that has a mill levy increase above that,” Corliss said Friday.
That’s because Corliss is seeing important equipment needs to address in the police department, fire department and public works department. In addition, the city is being asked to fund $500,000 in capital costs and $100,000 in operating costs for a new technical education center proposed by the Lawrence chamber of commerce and the Economic Development Corp. of Lawrence and Douglas County.
A 1.5 mill increase would add about $30 per year to the tax bill of an average $175,000 home. The 1.5 mill increase does not include any funding for a new police headquarters. Commissioners have discussed a combination of new property taxes and sales taxes to fund that proposed facility. The police headquarters funding likely would be put to a citywide vote in the November election.
The 1.5 mill increase essentially would maintain existing city services and provide about a 1 percent increase in the city’s salary pool for existing employees. It also would fund two new positions: a director of arts and culture that previously was approved by the City Commission and an inspector position for public works to deal with road construction issues. Corliss said major cost drivers necessitating a mill levy increase include salary, pension and health care costs.
“Our revenues are steady and strong, but they are not keeping up with those cost drivers,” Corliss said.
Another option is for the commission to take money from its fund balance account, which is a type of savings account that has accumulated over the years. In the general fund, that account has about $13 million currently. But Corliss said he’s not comfortable recommending deficit spending from the fund. The city has a policy that the fund balance should be between 15 percent to 30 percent of the city’s annual general fund expenditures. It currently is at about 17 percent, and some estimates project it could fall to about 15.5 percent in 2015, even with a mill levy increase.
Corliss said there will be plenty of pressures for an increase of more than 1.5 mills in the 2015 budget. He said equipment needs that have been deferred because of the economy are starting to become critical in several departments.
Corliss said he also is looking favorably at a request from economic development leaders to provide funding for a new technical education center. Plans are already underway to convert a portion of the former Honeywell Industries building near 31st and Haskell into the Peaslee Center, which will be staffed by area community colleges and vocational educators. Both the city and the county are being asked to provide funding that would be in addition to grant funds that are being sought.
The city also will receive a request from the Lawrence Public Library for increased operational funds for the expanded library, which will open next month.
“There are a lot of interesting needs and requests out there,” Corliss said. “They all have a certain level of value. That’s what is good about the budget process. It is the great clarifier.”
City commissioners will get a chance to wade through the latest budget numbers and requests at a study session on Tuesday afternoon. Ultimately, commissioners will have the final say on whether taxes are raised as part of the budget. Commissioners are scheduled to approve the 2015 budget by early August. But first, Corliss is required to submit a recommended budget. His recommended budget is scheduled to be released in the first week of July.