City betting on hotel stays, liquor sales as part of proposed 2016 budget; commissioners receive report on more than $1.5 million in overtime costs for fire, police departments
Sack out in a Lawrence hotel room, have an extra cocktail every now and then, and tell yourself that you’re doing Lawrence City Hall budget-makers a favor in the process.
City commissioners are close to passing a 2016 budget that makes a bet that hotel stays and liquor consumption both will increase in Lawrence in future years. Commissioners at their meeting tonight will take a key procedural step in approving the 2016 budget. They’ll publish the proposed budget and set a public hearing of Aug. 4, at which point they’re scheduled to approve the budget and the tax rate for the coming year.
So, let’s take a look at how this budget is shaping up:
• The Rock Chalk Park project is completed, but it is still having an impact on the city’s budget. The proposed budget calls for taking $150,000 a year out of the city’s guest tax fund to make a portion of the annual debt payment for the city’s $10.5 million recreation center at Rock Chalk Park. Currently, all the recreation center debt is being paid for through the city’s proceeds of the countywide 1 cent sales tax.
But commissioners believe it would be appropriate to pay for some of the debt from the guest tax fund. Guest tax fund revenues come from a special tax that is charged on Lawrence hotel rooms. The city surmises that the eight-gym recreation center helps bring people to town for overnight stays, particularly for youth basketball and volleyball tournaments.
Guest tax money legally can only be used for functions that promote tourism, overnight stays and other activities that will generate more guest tax revenues. The countywide sales tax, on the other hand, can be used for any governmental purpose. So, by shifting $150,000 a year in payments to the guest tax fund, that frees up sales tax money for the city to use for other purposes. It is worth noting that the previous City Commission argued that when voters approved the countywide sales tax in 1994 they were given a “political promise” that the city’s share of the sales tax would be used for recreation projects. That was one of the key arguments from the past City Commission why they felt justified in using the sales tax to fund the recreation center in the first place without putting the issue to a public vote. Whether you subscribe to the political promise theory depends largely on how you remember 1994. Regardless, the city has the legal authority to spend the sales tax revenue on any governmental purpose. It doesn’t have such authority with the guest tax funds.
An issue to keep an eye on, though, is whether hotel stays in Lawrence will increase much over the next several years. The city is betting they will because by adding the $150,000 in debt payments, the guest tax fund is projected to spend more money than it will collect in 2016. The deficit is estimated to be about $40,000. That’s not a major problem in the near term. The guest tax fund has a healthy fund balance, and can afford to operate at a loss for a few years. But, eventually, the fund will need to move into positive territory to remain healthy.
The more significant issue with this change seems to be that residents were told — granted, by the previous commission — that there was no need to vote on the recreation center project because the sales tax funds were being used for what they were intended for by voters. Now, a portion of those funds will be used for other purposes, and the recreation center is beginning to affect other parts of the city budget. At the moment, the impact is fairly minimal because the $150,000 only represents about 10 percent of the annual debt payment the city makes on the recreation center. But we’ll see if this is the beginning of a new trend where the recreation center affects multiple areas of the city’s budget.
• City commissioners are making an even bigger bet on liquor taxes. The proposed budget calls for about $350,000 in funding for the WRAP program, which puts mental health/social workers in Lawrence schools. The city is planning to fund that program from the special alcohol fund, which gets its revenues from a special tax charged on drinks served at bars and restaurants. There has been some other shifting of special alcohol dollars to try to accommodate the new WRAP funding, but it is a politically difficult fund to cut expenses in because several social service agencies are funded from the tax revenues. So, the net result is the proposed 2016 budget has the special alcohol fund spending about $52,000 more than it is projected to receive in revenue next year. Unlike the guest tax fund, the special alcohol fund does not have a healthy fund balance. City staff members are estimating the fund will completely spend down all its reserves by the end of 2018. What will change that scenario is if liquor sales increase faster than expected in the coming years. But as we’ve previously reported, for some unknown reason, drink sales at bars and restaurants actually have declined the past two years in Lawrence. Betting on liquor sales to increase in Lawrence, though, generally has been a good long-term strategy.
• The proposed budget that commissioners will discuss tonight is different from the recommended budget prepared by interim City Manager Diane Stoddard. The biggest difference is that Stoddard’s recommended budget called for a property tax rate increase of 1.057 mills. City commissioners balked at that increase, however, and the proposed budget now calls for the property tax rate to hold steady.
That means some items had to be cut from the recommended budget to make items balance. (Well, sort of balance. More on that in a moment.) But it also means the city is getting more aggressive in projecting how much revenue it will receive in 2016, at least in one area. The proposed budget calls for $250,000 more in license and fee revenue than what Stoddard’s recommended budget called for less than a month ago. The increase is expected to come from the city’s new rental licensing and inspection program, which gets in full gear in 2016. To be clear, the city is not proposing to increase what it charges landlords; it has just chosen to get more aggressive in its projections on the amount of money the program will raise in 2016.
As for the part about the city’s budget balancing, what is proposed is not a balanced budget. The proposal calls for general fund spending to exceed revenues by about $895,000. But city officials are hopeful that won’t be the case. The city over the last several years has routinely budgeted to spend more than it receives in revenue, yet at the end of the year it has managed to finish with a slight surplus of revenues over expenses. Sometimes revenues — like sales tax collections — increase more than expected. Other times, the city manager’s office put on hold or eliminates certain purchases to keep expenses in line with revenues. The city’s total general fund budget has about $79.7 million in expenses, which is up about about 5.2 percent from 2015.
Among items that are getting a cut in the budget compared with what was in Stoddard’s recommended budget are:
— $25,000 in Planning Department funding that was to be used for various studies;
— $86,000 in the street maintenance division. The money was to be used to buy additional road salt. To be clear, the city will have road salt for the winter season. It just won’t buy as much as once planned.
— A nearly $189,000 reduction in the amount of overtime the Lawrence Police Department pays in 2016. That one caught my eye because a reduction in overtime seemingly would mean a reduction in the number of hours police are out on the street because the city is not adding any full-time officers as part of the 2016 budget. But I checked in with Mayor Jeremy Farmer about the cut, and he said the $189,000 reduction still will allow the Police Department to have at least the same number of hours available for overtime as it does in 2015. Police leaders, though, were asking for an increase in the number of hours they could use in 2016, and commissioners balked at that strategy.
Look for a discussion among commissioners on how the police and fire departments use overtime. Commissioners recently received a new report about just how much overtime is used in those two departments. The fire department spent $609,812 in overtime costs in 2014 for firefighters. Police officials spent $543,651 on overtime for police officers and another $603,938 on overtime for detectives in 2014. As we previously reported, the Police Department has been unable to staff a nighttime detective division, meaning that detectives often are called in for overtime when an investigation needs to occur during the nighttime hours. Police department leaders asked for about $1.2 million in funding to staff a nighttime detective division in 2016, but the funding is not included in the proposed budget.
At some point, I think city commissioners are going to have to figure out what the right size is for the Police Department. What will be interesting is whether they figure that out before they make decisions about what type of police headquarters building to fund. Knowing how large the force will be today and in the future is important in the design of the facility, but the bigger issue probably is figuring out how to spend what could be limited resources. If the city spends $20 million or more to build a police headquarters building, and then determines it needs to spend multiple millions more to add police officers shortly thereafter, will that be politically viable? That’s a big question that could have some big implications for the community and the Police Department.
Commissioners meet at 5:45 p.m. tonight at City Hall.
I’m sure city employees always fix a big batch of popcorn, grab their notebooks and sit down in front of the TV on Tuesday nights to watch and admire the weekly Lawrence City Commission meetings. But there may be a few more viewers tonight. This is the meeting where commissioners will make some significant decisions about city paychecks.
Commissioners are scheduled to approve new employment agreements for the employee groups that represent large numbers of police officers and firefighters. It is set to be a big night for those groups. Getting city employees increases in pay has been a priority for the administration of interim City Manager Diane Stoddard, and it appears Lawrence city commissioners are on board with the direction as well. The attitude has been noticed by the employee groups.
“It was clear the management team has a goal of investing in the employees,” said Detective Mike McAtee, chairman of the Lawrence Police Officers Association. “They were tough negotiations, but I felt like each side was making headway in every meeting. I can’t say it went that way in years past.”
But what has changed in terms of how the city will pay its police and fire staffs? (Quick note: The agreements cover police officers and detectives on the police side, and cover positions that are at the rank of lieutenant or below on the fire side.) Here’s the basic information:
— The city will spend about $1.05 million more on police wages — for those employees covered by the agreement — over the next three years. The 2016 total is $154,800. The wage increase in 2016 really only impacts a few police officers who have topped out on the pay scale. Detectives aren’t getting a general wage increase because a salary study showed their wages were very competitive with area communities. In 2017, the city will spend about $445,000 to fund the police agreement, and that includes a 2 percent general wage increase for police officers, but again not for detectives. In 2018, the city will spend about $445,000 again, this time giving a 1.75 percent wage increase to police officers and a 1 percent increase to detectives.
— The city will spend about $1.5 million more on firefighter wages — for those employees covered by the agreement — for the next four years. (Firefighters negotiated a four-year deal, while police negotiated a three-year deal.) The breakdown for fire is: about $350,000 in 2016 and about $500,000 in 2017 that will go toward fire employees who have topped out at the pay scale; about $360,000 in 2018 that will fund a 2.5 percent general wage increase; and about $350,000 in 2019 to fund a 2.5 percent general wage increase.
In a memo to city commissioners, staff members said they based a lot of their negotiations off of salary studies that looked at what police and fire employees were making in other area communities. But those studies weren’t part of the information provided to commissioners, so I asked to see them. Here’s some of what those studies showed:
— Lawrence’s average starting salary today for a police officer is $43,180. That’s about 6.9 percent higher than the average starting salary for the communities of Lenexa, Overland Park, Shawnee, Topeka, Kansas City, Kan. and Olathe.
— The annual “maximum” for a police officer in Lawrence is $67,350. That is about 4.8 percent less than the average of those communities listed above. Understand something about the maximum, though. There are ways that officers can earn more than that amount in a year. Overtime is one way, and receiving special training to become certified in specific areas is another. According to city payroll data, there were more than 50 police officers in 2014 that earned more than $70,000 a year, with a handful in the $90,000 range. Now, how much of that came in overtime, I don’t know. It seems like that may be an issue city commissioners will want to study as they look at what type of police headquarters to build. Does the city have the right size of police force today, or is it asking officers to work unhealthy amounts of overtime?
— It takes Lawrence police officers about eight years to reach the top of their pay grade. The average for the other communities is 11.6 years, but the numbers are really all over the board. Shawnee and Olathe didn’t provide information for that question, and Topeka checked in at 21 years.
The bottom-line on the proposed police agreement is that both sides have agreed to keep the starting salary above the average of area communities. The department finds that to be a real advantage in finding quality recruits. Both sides also have agreed to increase the maximum annual salary incrementally so that at the end of the three-year agreement, Lawrence’s maximum will be in line with the average maximum at other area departments. The amount of time it takes a Lawrence police officer to reach that maximum salary isn’t scheduled to change under the agreement. So, it is a significant boost for police, but one that McAtee said is important in order to cut down on officer turnover.
“We want officers to be invested in the community,” McAtee said. “If they are making a fair wage, hopefully they will buy a house in Lawrence, their kids will go to school in Lawrence, and they really will be a part of the community. That is what we want.”
Figuring out how the fire pay plan works is a little more complicated. There’s lots of talk of apples and oranges, and after awhile I feel like I’m in the produce aisle of Checkers, which never ends well. (I just get overwhelmed and fill the F-150 with bananas because they are so cheap.)
But the point fire officials are making is that it is a little tough to compare wages of Lawrence fire employees with those of other cities because Lawrence operates a fully integrated fire and medical service, while some other communities don’t. In other words, Lawrence firefighters also are trained EMTs and operate ambulances in addition to firefighting equipment. But here’s a look at what I was able to decipher:
— It takes about eight years for a Lawrence fire employee to top out on the pay scale. Data from Overland Park, Shawnee, Olathe, Lenexa and Kansas City, Kan. showed that it takes about 12 to 14 years in those communities.
— When Lawrence fire employees top out on the pay scale, their annual maximum is about 10 percent less than the average maximum in those communities listed above.
— The proposed plan will add about six years on to how long it takes for a Lawrence fire employee to reach the top of the pay scale. But the top ranges of the pay scale will increase by about 10 percent to bring them in line with area averages. In terms of what those ranges are, I don’t have those numbers. But from 2014 payroll data, I can tell you that many firefighters make around $60,000 to $80,000 a year, depending on whether they are trained to be EMTs or paramedics. Lieutenants generally make more.
John Darling, president of the local firefighters union, said the proposed plan represents some of the larger changes that have been made to the department’s pay structure in years. But he said they are important changes to make to help the department recruit and retain quality employees.
Commissioners will discuss and vote on the proposed employment agreements at their 5:45 p.m. meeting tonight. Before that meeting, though, they will have a study session on the 2016 budget. Last week, commissioners balked at a recommended 1.057 mill levy increase that would help pay for wage increases, additional funding for the WRAP mental health care program in schools, and a few other items.
We’ll see how commissioners attempt to reconcile the proposed budget. There certainly has been some talk about spending down some city reserve funds. In the past, spending reserve funds has been seen as an acceptable practice when paying for one-time items, but has been frowned upon when paying for ongoing expenses, such as salaries or multi-year programs. We’ll see how this new commission tackles such issues.
News of a police search usually causes my wife to start confessing to a multitude of unpaid parking tickets. She'll be happy to know this is a different sort of police search.
City officials are getting more serious about finding a location for what could be a new $20 million to $25 million police headquarters. The city is inviting area landowners to express an interest in selling property to the city for the headquarters.
City Hall officials have set a deadline of 5 p.m. Sept. 30 for landowners to submit proposals to the city. Among the factors the city will consider in selecting a site are:
• Size. The city wants 12 to 15 acres.
• Access to other public facilities. Specifically, the city would like a location with easy access to the county jail, the courthouse, municipal court, City Hall, and the city's vehicle maintenance and fueling facilities.
• Costs to install infrastructure such as streets, storm water improvements and public utilities.
• Compatibility with other nearby uses.
The city has included $1.5 million in its 2014 budget to purchase a site and do preliminary design work. City commissioners, however, still haven't tackled the big question of how they would pay for the $20 million or more in construction costs. In the past, city staff members have presented scenarios where a new sales tax or a property tax increase could be used.
As for a leading location for the facility, your guess is probably as good as mine. Several years ago when the idea of a police headquarters was mentioned, I know some city officials were eying undeveloped ground near the headquarters for the city's fire department near 19th and Iowa streets. I don't know if that idea is still in play, but there is still undeveloped property near the fire station.
There's also a lot of undeveloped property near the Douglas County Jail. But that would place the police force on the far eastern edge of the city, and I'm not sure that's what the city is looking for. City officials already have indicated that being on the edge of the city may not be ideal from an efficiency standpoint. The city owns property on the far western edge of the city, near the new interchange for Bob Billings Parkway and the South Lawrence Trafficway. But City Manager David Corliss has said he doesn't view that as a likely location for a police headquarters.
Other than the county jail, most of what the city wants to be close to — municipal court, City Hall, the courthouse, the city fueling station at 11th and Haskell — is in the vicinity of downtown. In some ways, a downtown site would be the most interesting one to watch, but it also is the hardest one to picture. Finding a site of 12 to 15 acres in the downtown area could be a challenge.
The city could perhaps get by with less property if it built a multi-story building with a parking garage, on a site such as the parking lot that currently serves the Judicial and Law Enforcement Center at 11th and Massachusetts. But I haven't heard that idea get much traction. There also is significant space available in the former Riverfront Mall building at Sixth and New Hampshire. But I've heard indications that the Police Department would like to have a newly constructed building that is designed specifically for police use, rather than a retrofitted facility. (Full disclosure: Members of the Simons family, which owns the Journal-World and LJWorld.com, are owners of the former Riverfront Mall building.)
I suppose a dark horse possibility is that the city decides to do some rearranging of its current facilities. For example, would the city try to find a new home for its trash trucks at 11th and Haskell and use that site for a police headquarters? I've haven't heard that specifically, but certainly the idea of a new city public works facility has come up in past years.
As I said earlier, it's all a guessing game at this point. I'm sure there are a multitude of other locations around the city that I'm not thinking of. Locations for a police facility are probably like unpaid parking tickets at my house — once you start looking for them, you end up with more than you want.
You’ve probably noticed a couple of SUV police vehicles on the streets.
Well, you will see more of them in the coming months. (Or perhaps you are a terrible driver and don’t notice police vehicles, in which case I predict higher numbers for the city’s ticket totals in 2013.)
City commissioners at their Tuesday meeting are set to set to approve a bid for eight more of the Ford Police Utility Interceptors. Commissioners are set to approve a bid from Shawnee Mission Ford of $25,700 each for the vehicles.
As we reported last month, police officials said the utility vehicles performed very well in the snow storms, and the purchase price of the SUVs is about the same as the more traditional models.
I’m not sure how the SUVs — they are actually fairly small for a utility vehicle — do on fuel mileage compared to the standard police car, but some reviews I’ve read indicate that SUV police vehicles are about 20 percent more fuel-efficient than the old Crown Victoria Police Interceptor vehicles that are still a part of many fleets.
No word yet on what percentage of Lawrence police fleet is expected to be comprised of the SUVs in the future.