Renewal of infrastructure sales tax puts $63 million in projects on the line

Don Lassen with Sunflower Paving Inc., puts some finishing touches on curbing on 22nd Street near the intersection with Vermont St. Friday, July 19, 2013.

Lawrence residents will soon answer whether they are willing to pay extra on their purchases to repair that crumbling curb or tar-lined street.

In November, voters will be asked whether to renew the 0.3 percent special sales tax that provides millions of dollars annually for infrastructure improvements and purchasing fire equipment.

The city plans to use the extra sales tax revenue for several high-dollar infrastructure projects and annual programs, such as the residential street maintenance program, improvements to 23rd Street and increased funding for sidewalk, bicycle and pedestrian improvements.

The city’s capital improvement plan assumes renewal of the tax, and not having those dollars would mean the city would have to reprioritize the program, said Chuck Soules, the city’s director of public works.

“Without these funds, many of these projects and programs would either not be completed or deferred to future years,” Soules said via email.

The 0.3 percent infrastructure tax is one of three sales taxes, totaling 0.55 percent, that will expire in 2019 unless voters choose to renew them. If renewed for another 10 years, the infrastructure tax is projected to generate $63 million between 2019 and 2029.

The upcoming vote raises other questions that the commission will have to address, such as what action will be taken if voters reject the tax and how the money should be spent should it pass.

An alternative

With state, city and county sales taxes, Lawrence residents pay 9.05 percent on their purchases, which in Kansas includes groceries. The sales taxes up for renewal are in addition to the 1 percent general city sales tax and the 1 percent county tax, which the city gets a share of.

One local advocacy group, Lawrence Sunset Alliance, is asking residents to vote no on renewal. The main message of the opposition campaign is that sales tax is regressive, meaning that unlike property taxes, it disproportionately affects those with lower incomes.

Commissioner Mike Amyx said there is no doubt that sales tax is regressive, but that visitors to Lawrence also contribute.

“And so I think it works out better for everybody because everybody gets to pay in,” Amyx said. “Let’s face it, we have a lot of people that come visit our community for the various events that we have, and they use everything from our streets, to our sidewalks to our systems.”

Mayor Leslie Soden also acknowledged sales tax is regressive. While Soden said property tax is always an option, she thinks the referendum is an appropriate way to determine whether residents want to see more money spent on infrastructure such as streets and sidewalks.

“What I do like about referendums is that it gives people a chance to weigh in on where we’re spending money,” Soden said. “So I think it’s a good, appropriate way to ask people if there is more we want to do.”

If Lawrence votes no

If the sales tax renewal fails in November, city officials have said there is time before it expires to modify the proposed sales tax renewals and include them in a subsequent election.

Amyx said his goal is to get as much information out as possible to make sure people have the information to make the decision. But he said one of the reasons for having the election so early — the sales tax does not expire until March 2019 — is to give the city the opportunity to have another election if the tax is not renewed.

“It gives us latitude to go back to people if it doesn’t pass,” Amyx said. ” I think that has to be said.”

Soden said if the infrastructure sales tax ultimately fails, it would lead to difficult decisions regarding upcoming projects, including prioritizing some infrastructure improvements over others.

“When it comes to infrastructure, we’ve got so many things related to that,” Soden said. “We’ve got sidewalks, streets, and I’d hate to see us having to start prioritizing streets over sidewalks or other pedestrian-type improvements. That would have to be the difficult decision that we’d have to make.”

Road conditions

Over the past 10 years, the conditions of city streets have improved. The city’s Pavement Condition Index, a routine survey of the condition of the city’s streets, indicates the vast majority of the city’s pavement is currently rated 70 or above on a scale of 1-100. The current average PCI is about 73.

Amyx said he believes the city has held up its end of the deal when it comes to the current infrastructure sales tax.

“I think that we’ve seen a number of improvements in our major road systems and in the various things that we have spent money on,” Amyx said. “And I think that it’s made a major impact on our community.”

However, the amount of money budgeted for contracted street maintenance — work such as such as crack sealing, patching, repaving, and curb and gutter repair — has been on the decline in recent years.

In 2008, before the infrastructure sales tax was in effect, the street maintenance program was allocated $4.8 million. Funding levels subsequently increased — $5.7 million was allocated in 2012 — but the program has been allocated about $3 million over the past two years. City leaders have pointed out that several major street reconstruction projects have been completed in recent years, and that these are not funded with the money allocated for maintenance.

Spending plan

On Tuesday, the City Commission voted unanimously to use the existing 2018-2022 capital improvement plan as the spending plan for the sales tax renewal. The CIP lists 20 infrastructure projects or programs.

Soules said tying the spending plan to the city’s CIP process provides more flexibility should things change.

“The good thing with doing it the way it has been proposed is we’ll evaluate this and the CIP will be extended every year,” Soules said. “We’ll be able to evaluate this annually to get to those priority projects.”

The list includes $1.3 million annually for the contracted street maintenance program, at least $400,000 for a curb and gutter repair program and at least $100,000 for pavement repairs. Specific projects include $4.75 million for improvements to 23rd Street, $2.8 million for Wakarusa Drive and $2.65 million for 19th Street.

Also included are equipment purchases for the fire and medical department, including $540,000 for personal protective equipment and $600,000 for mobile radios.

The commission isn’t obligated to follow the plan exactly; rather, the spending plan provides examples of specific projects that meet the parameters for spending the sales tax proceeds. Those parameters are laid out in ballot language for the infrastructure tax question.

The ballot language is binding and allows the funds to go toward constructing or improving various types of transportation infrastructure or purchasing fire equipment. The ballot states, in part, that the proceeds would be used for “constructing, improving, and maintaining public streets, sidewalks, storm water facilities, and recreational trails, bikeways, and paths.”

Sidewalk repair and improvements

Another issue that could impact the city’s infrastructure expenses is the mounting problem of residential sidewalk repairs. The city has estimated $6 million of residential sidewalk repairs are needed throughout the city, and much of that work is the responsibility of homeowners by ordinance.

In March, the commission deferred action on a new administrative policy that directed city staff to enforce the city’s longstanding ordinance requiring property owners to pay for repairs to sidewalks that border their properties. The proposed policy would have city staff systematically enforce the sidewalk repair ordinance, but would provide funding help for low-income residents, as well as property owners with more than one adjacent sidewalk. It is unclear when that policy will come before the commission again.

While the ballot language would allow the infrastructure sales tax proceeds to be used to repair any sidewalks in the city, Soules said that at this time, it is not intended to be used to repair sidewalks adjacent to residential properties, given the standing ordinance.

The CIP spending plan also includes increased funding for sidewalk, bicycle and pedestrian improvements. The CIP includes $600,000 for this program in 2019, and it increases the amount annually to $1 million in 2021 and 2022.

When asked how residential sidewalk repair fits into the CIP spending plan, Amyx said he sees it as a separate issue that he expects will be addressed by the city in the future.

In addition to the proposed sidewalk repair policy, a priority plan for how pedestrian funding should be spent is currently being developed. Soules said city staff and the Transportation Commission are developing a prioritization matrix that will be presented to the City Commission for its consideration and feedback. Once the matrix is complete, he said, it will be used to evaluate and rank projects for inclusion in the CIP.

Final decisions regarding how pedestrian improvement funds would be spent would be made annually by the commission as part of the city’s budget process.

For her part, Soden said she would like to see the city prioritize heavily used pedestrian routes — which would include some residential sidewalks — such as routes to schools, grocery stores and public facilities.

“We need to prioritize it in a more pragmatic fashion,” Soden said.