Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

Although city commissioners questioned how much Lawrence property taxes should increase, most agreed at their work session Tuesday that some level of increase would be necessary.

Commissioner Mike Amyx said he wanted to make sure commissioners did their part to keep the mill levy increases as low as possible and continue to address priorities. Amyx said he thought that was especially important given recent audits that found the city failed to send invoices and collect payments for significant sums.

“Based on the stuff that’s come out, really, are we ready to have a mill levy increase?” Amyx asked. “I’ve been thinking about this the last couple days, and I really wonder about it. If that’s the direction that we ought to go until we take care of these other things.”

City Manager Tom Markus recently ordered an independent audit of the city’s billing procedures, which found that poor record keeping, insufficient employee training and a lack of oversight caused payments worth hundreds of thousands of dollars to go uncollected by the city. Only the initial phase of the audit has been completed, and final figures aren’t yet known.

As part of his 2018 recommended budget, Markus proposed a 1.25 mill levy increase, which will help fund a $17 million police facility. Commissioner Matthew Herbert recognized that people are angry about the uncollected payments, but said that the commission still needs to focus on its priorities, including funding the new police facility.

“We can’t let the distractions get in the way of our fundamental goal,” said Herbert, noting that recent online surveys indicate public safety is a high priority in the community. “That’s what we’re tasked to do.”

Markus told the commission he can’t say yet how much money the city will be able to collect as a result of the audit. He also noted that the statute of limitations may come into play for some contracts and that some who owe the city money may argue the city’s findings.

Markus added that it’s not just the funds for the police facility, but other projects as well, that are resulting in the proposed 1.25 mill levy increase. He said that if he had a criticism of what the city has done in the past, it’s that it continues to kick projects down the road.

“This town is going to continue to grow whether you like it or not,” Markus said. “And the various departments, including the police department, will continue to grow.”

Vice Mayor Stuart Boley agreed that it is time for the commission to pursue a new police facility.

“With regards to the police facility, that’s been an issue for this commission for a couple years,” Boley said. “And I think we have to come to grips with it and I think this provides us a way to do that phased and, frankly, responsibly.”

Commissioner Lisa Larsen agreed that the city needs to stop kicking the can down the road, and take care of necessary projects. Still, Larsen hesitated about raising the mill levy.

“I don’t know if that’s the right answer, but I don’t know another way,” Larsen said. “…We’ve got to at some point stop doing that. We’ve got to take care of business.”

Mayor Leslie Soden was the only one to say that she wanted to hold the property tax rate flat.

“I would like to adjust so that we don’t have a mill levy increase,” Soden said.

To do that, however, city staff told commissioners they would have to cut out millions worth of projects. Finance Director Bryan Kidney said that because the proposed 1.25 mills is in bonded funds and would therefore be paid off over time, the commission would need to cut a total of $16 million to 17 million to keep the property tax rate steady.

In addition to the property tax rate increase, the proposed budget includes utility rate increases and the elimination of nearly a dozen positions. Over the next five years, Lawrence is looking to fund about 180 large projects and purchases totaling $284 million. The new police facility, automated water meters and major road reconstructions are all in the plans.

The commission also heard about adjustments to the budget. Kidney said that there were adjustments across the board, including an increase in property tax valuations, which added about $1.4 million to the city’s revenue. However, other sources of revenue — such as sales tax and franchise fees — came in below projections. Overall, the adjustments included in the city staff memo to the commission amounted to a net increase of about $285,000. The revised total general fund expenditure budget is now $75 million.

The proposed mill levy increase would amount to about a $29 increase in annual property taxes on a $200,000 home.

That leaves the question of what to eliminate.

“Which projects do you do without?” Amyx asked. “Which are not priorities?”

The City Commission will consider the budget’s maximum expenditures at its meeting on July 11. A public hearing for the budget would then be scheduled for Aug. 1.