Increases in property values in Lawrence are giving the city’s budget a boost, but city staff is still recommending an increase in the property tax rate.

Increases in property values in Lawrence are giving the city’s budget a boost, but city staff is still recommending an increase in the property tax rate.

As part of his 2018 recommended budget, City Manager Tom Markus proposed a 1.25 mill levy increase, which would amount to about a $29 increase in annual property taxes on a $200,000 home. The City Commission will discuss updates to the budget at its meeting Tuesday.

Mayor Leslie Soden said she definitely wants to talk to staff about the changes in revenue and expenditures, as well as to see if there is any likelihood of carrying a balance over from this year to next. Soden said the commission’s new strategic plan, which has prioritized specific short-term priorities, will help the decision-making process.

“This is why having the strategic plan is really helpful for us, so that when things like this happen, then staff is already aware of future goals and can start working on them perhaps earlier than normal,” she said.

The recommended budget, released May 4, assumed an assessed value increase for Lawrence properties of 2 percent. The projection is meant to be conservative, and the Douglas County Appraiser’s office has since estimated the increase to be 6 percent, generating a $1.3 million increase in the city’s projected revenue. Other sources of revenue — such as sales tax and franchise fees — came in below projections.

“Despite the increase in assessed valuation, staff continues to recommend a 1.25 mill increase in the mill levy for the Bond and Interest Fund in order to sufficiently fund the proposed multi-year Capital Improvement Plan,” a staff memo to commissioners states.

Over the next five years, Lawrence is looking to fund about 180 large projects and purchases totaling $284 million. A new police facility, automated water meters and major road reconstructions are all in the plans. If approved by the commission, the 1.25-mill increase would generate $11-12 million toward the $17 million police facility.

The recommended budget also includes staff cuts and approximately $9 million in unfunded department requests, including more than $6 million in deferred capital improvement projects and unfunded requests for new staff positions in the human resources, information technology, police and fire-medical departments.

The adjustments to revenue projections for the budget, according to the memo, are as follows:

• Property tax: An increase of about $38 million, or 6 percent, over the assessed valuation used to build the 2017 budget. The result is a total increase of $1.3 million in the projected revenue for the general operating, public library, and bond and interest funds.

• Sales tax: The original budget assumed sales tax proceeds would increase 2.2 percent over the projected 2017 amount. However, recent sales tax collections have been significantly less. The result is a total decrease of $767,000 in revenues for the general operating, public transportation and infrastructure sales tax funds.

• Franchise fees: Revenue from franchise agreements permits have been decreased by $241,000, based on the collections received year to date below this period last year.

• Charges for service: Revenue from building inspections and permits have been increased by $114,000, based on the collections received year to date that continue to exceed original projections.

The memo also notes two significant changes to expenditures made since the recommended budget was released. The cost of longevity payments — for which Markus is now recommending a decrease in November 2018 — will result in an increase in spending of about $280,000. The budget for economic development was reduced by $50,000 due to an entry error that was discovered since release of the recommended budget, according to the memo.

The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.