Editorial: Use surplus for capital projects
photo by: Journal-World Photo Illustration
It’s a smart move for the city of Lawrence to put a $2.25 million budget surplus into the city’s capital improvement reserve fund, assuming the city gets aggressive in addressing projects.
The city has to do something with the $2.25 million or risk running afoul of its own fiscal policy, adopted in September 2017, of keeping its fund balance to no more than 25 percent of budgeted expenditures. The fund balance is the difference between assets and liabilities in the general fund.
Finance Director Bryan Kidney said the additional money in the general fund was the result of 2017 revenues coming in 1.2 percent higher than projected along with a 5 percent reduction in expenses. Part of the surplus is the $700,000 collected late last year after an audit showed the city had failed to properly bill and collect on some of its property leases.
City staff is recommending that the entire $2.25 million be transferred to the city’s capital improvement reserve fund, which is used to fund improvements to city facilities and infrastructure. Commissioners will vote on the issue this week.
In the past, commissioners have discussed using the funds for everything from a tax break to affordable housing projects. A tax break makes sense considering the 2018 budget increased utility rates by about $65 annually and property taxes by 1.25 mills.
But such a break would be modest at best, and the city is not proposing a tax increase in 2019. It seems the surplus could have a greater impact in helping spur along any of a number of capital projects such as improvements to the eastern edge of 19th Street to include a second access into VenturePark, paving Queens Road in west Lawrence, repairing sidewalks throughout the city and finally completing the Lawrence Loop bicycle and pedestrian trail.
The city’s finances are healthy, and commissioners are in position to hold the line on taxes while also increasing funds available to fix the city’s infrastructure. Such an approach to the budget surplus is the best way to benefit the city’s taxpayers.
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