Sales tax collections on the rise in early part of 2015; city sharpening pencil to build $50 million sewer plant on budget
While the forklift drivers are dutifully unloading all the clearance rack Easter candy at my house, there’s a new report out that shows Lawrence shoppers did a pretty good job of keeping the cash registers ringing during the Valentine’s Day period as well.
The latest sales tax report from the Kansas Department of Revenue shows taxable sales in Lawrence from the mid-February to mid-March period were up 4.2 percent compared with the same period a year ago. The year-to-date numbers for 2015 are even more impressive. Thus far, taxable sales — most of which are retail sales but also include sales taxes on items such as your utility bills — are up 5.6 percent compared with the same period a year ago.
The 5.6 percent growth rate puts Lawrence in the top half of the large retail centers in the state. Here’s a look at how other Kansas communities fared:
— Kansas City: up 6.4 percent — Lenexa: up 7.6 percent — Manhattan: up 3.4 percent — Overland Park: down 0.3 percent — Salina: up 5.6 percent — Sedgwick County: up 3.1 percent — Topeka: up 2.1 percent
It will be an interesting year to watch retail sales in Lawrence. There’s lots of activity on south Iowa Street. This year will be the first full year for Dick’s Sporting Goods in the market, PetSmart just recently opened its store next to Dick’s at 27th and Iowa streets. As we previously reported, Ulta Beauty and the Boot Barn also are scheduled to open later this year at the 27th and Iowa street shopping center. Then, just down the road, Menards will open the largest home improvement center in the city near 31st and Iowa. There are multiple pad sites available around that store, although there haven’t been signs yet that tenants have been found for those spaces. And there also is development out west. Sprouts is opening a new grocery store just north of the Sixth and Wakarsusa interchange.
All those stores have the potential to generate significant amounts of sales tax revenue, so it will be interesting to watch whether Lawrence’s sales tax totals over the next couple of years rise significantly. There’s certainly been a debate among some about whether the new stores will add new sales to the Lawrence market or whether it will just shift existing sales around. The numbers probably won’t be definitive. (That’s a way of saying we’ll probably continue to argue about that point.)
But thus far, retail sales in Lawrence are on an impressive run. In 2014, sales tax collections grew by 4.1 percent, which was the second fastest growth rate of the eight major cities that we track. That’s despite the fact that Lawrence continues to have per capita retail spending that is significantly less than other cities. In 2014, our per capita spending was $15,857. Fellow university community Manhattan had per capita spending of $19,236, or about 20 percent greater than Lawrence’s. Maybe Lawrence never will have per capita spending reach that level since we are so close to the major shopping areas in Kansas City.
But there certainly have been arguments that Lawrence can attract more outside-the-community shoppers from places such as Franklin County and Jefferson County who may find it more convenient to run into Lawrence than to deal with the larger crowds in Kansas City. If Lawrence could just increase its per capita spending — either through purchases made by Lawrence residents or by people outside the community coming here to shop — by 1 percent, it would add about $15 million in sales to the Lawrence economy. That $15 million in sales would add about $400,000 a year in new sales tax revenues to the city and county coffers.
If Lawrence somehow could grow its per capita spending levels to equal Manhattan’s, that would amount to about another $337 million a year in retail spending in the city. That would add about another $8.6 million to the sales tax coffers of the city and the county.
In other news and notes from around town:
• When it comes to big numbers, plans for a new sewage treatment plant south of the Wakarusa River kind of take the cake at Lawrence City Hall. If you remember, bids for that project created a few too many big numbers last month. Commissioners rejected the bids after they came in about $5 million more than expected. Well, the project has been rebid, and the results have proved that the best way to get a project to come in closer to engineers' estimates is to . . . raise the engineers' estimates. Previously the sewer treatment plant had an engineers' estimate of $45.9 million. When the project was rebid, engineers increased the estimate to $51.3 million, largely because construction costs are on an upward trend right now.
New bids for the project did come in below the $51 million estimate, but are still above the $45 million to $46 million that city officials have budgeted for. Garney Construction submitted the low base bid at $47.15 million. Crossland Heavy Contractors was the only other bidder at $49.3 million.
City officials, though, are optimistic they’ll be able to make the new bid work. Unlike the last time the project was bid, the city asked for several bid alternates that will allow certain parts of the project to be deleted. By making some deletions, it appears the bulk of the project will be able to be constructed within that $45 million to $46 million range. That price range is important because anything above that would likely require sewer rate increases greater than those that already have been approved.
“The City Commission has made it clear that it wants to move ahead with this project, but it wants to move ahead within the already approved rate plan,” City Manager David Corliss said.
Staff members are looking at the possible deletions and are expected to make a recommendation to the commission in late April.
“But we have some good options now,” said Dave Wagner, the city’s director of utilities.
As far as what may be cut, some options are directly related to the technical sewage treatment operations of the plant, while others are related to office space, vehicle storage and other such ancillary functions.
City officials say the new plant is needed to help the city meet EPA treatment requirements and also to give the city the needed treatment capacity to grow in the coming decades.
Local butcher to open sausage shop and restaurant near Ninth and Iowa; Kansas Food Truck Festival to make Lawrence return; city getting high bids for big projects
It won’t be long before it is time to fire up the grill, double up on the cholesterol medicine and stock up on the meat. Well, plans are in the works for a new Lawrence business that can help with the meat part, especially if you are a fan of homemade sausages and frankfurters.
Lee Meisel, the butcher for the popular downtown restaurant 715, has filed plans to open Leeway Franks in the shopping center at Ninth and Iowa streets. The shop is going into the building at 935 Iowa that is just east of the bowling alley. The space formerly housed Daylight Donuts, which appears to have left the Lawrence market. (Yes, I feel like I should deliver a soliloquy on how we must take the bitter with the sweet in this life. But I’m too busy drawing on eyebrows after this year’s pre-season experiments with lighter fluid.)
Leeway Franks will produce a variety of sausages, including an all-beef frankfurter, classic bratwursts, Polish sausage, and several daily specials that could include some items made from bison or game meats. The shop will sell its creations out of a butcher case for people to take home to prepare themselves.
“We think we’ll get a lot of business on game days from tailgaters,” Meisel said.
But the business also will have a kitchen and a small dining area for about 20 people.
“The food is going to be really casual and approachable for everyone,” Meisel said. “The whole idea is to have a place where you can get a really good hot dog and a cold beer.”
Meisel said he also plans to offer a few side items that he became accustomed to while growing up in North Dakota: french fries with brown gravy, and Tater Tots with cheese sauce. (I thought he said this place was going to be casual. I think that was two thirds of the normal menu for a Bill Clinton state dinner.)
The frankfurters, though, are expected to be the speciality at Leeway Franks. Meisel said they’ll be an all-natural product, made with area beef and won’t include fillers. They’ll also feature a natural casing that provides a certain crispness when you bite into it. And Meisel said they’ll have a blend of spices that goes beyond just the large amount of salt you get with the 99 cent packages of hot dogs.
“Unless you grew up in a place like Wisconsin or Chicago where they do a lot of traditional frankfurters, I don’t think a lot of people have had them quite like this,” Meisel said.
Meisel hopes to have the restaurant up and running by late spring or sometime this summer.
In other news and notes from around town:
• Get ready for the second annual Kansas Food Truck Festival, which will be hosted again in East Lawrence. (How awesome would it be if one of the trucks was a tanker truck filled with brown gravy for all the french fries?) Organizers have announced that the food truck festival is set for May 2 in the warehouse arts district in East Lawrence. Tickets for the event go on sale today.
As was the case last year, proceeds from the event will benefit Just Food, the nonprofit food bank that serves Douglas County.
Organizers expect about 20 food trucks from across the state to set up shop in the 800 block of Pennsylvania Street from 5-10 p.m. May 2. The event also is expected to feature live music, art and activities for the kids.
For more information about the festival, go to the event’s website at ksfoodtruckfest.com
• It looks like the days of building contractors really sharpening their pencils to win bids for city construction projects may be coming to an end. At their meeting on Tuesday, city commissioners are poised to reject bids for two major projects because they came in significantly over the cost estimates of engineers.
I previously alerted you to the fact that bids for the city’s sewer plant project south of the Wakarusa River came in at about $50 million instead of the estimated $46 million. Well, commissioners at their weekly meeting will be asked to reject those bids, and direct engineers to come up with some ways to reduce the scope of the project slightly to save some money. But city officials warn that even then the project may come in above the previously estimated $45.9 million engineer’s estimate. The city-hired engineering firm said there appears to be a fairly simple reason for the higher-than-expected costs.
“It appears that higher bid costs can be attributed in part to a strong construction market and a general trend upwards in construction costs,” John Keller, a project manager for Black & Veatch, said in a letter to city officials.
Further evidence of that trend can be found in North Lawrence. City officials in late February received bids for the Maple Street Pump Station, which is designed to reduce storm water flooding in North Lawrence.
The low bid came in at $5.9 million compared to an engineer’s estimate of $4.1 million. Engineers are recommending that the bids be rejected, and that the scope of the project be reviewed. Engineers don’t yet have a date in mind for when the project could be re-bid.
As for the sewer plant project, engineers expect to open new bids on that project in early April.
Topeka-based credit union buys bank branch in West Lawrence; city set to approve permit for $65 million sewer plant
The Lawrence banking industry has become something like a college class reunion: Names tags are needed, and it would be helpful if I had a list of who I still owe money to.
We’ve already reported on several name changes on the Lawrence banking scene, but add one more new name to the mix. Intrust Bank has sold its branch on Wakarusa Drive to a Topeka-based credit union.
Envista Credit Union has opened its first Lawrence location at 1555 Wakarusa Drive in the space formerly occupied by Intrust. Envista finalized a deal to purchase the bank building from Intrust last month, and opened its new branch a few weeks ago. Intrust continues to operate two other locations in Lawrence.
“The credit union is growing, and we want to be able to offer added convenience for the members we have in Lawrence and elsewhere in the area,” Jessica Somers, vice president of business development, said of the decision to open a Lawrence location.
Envista is a significant player in the financial services sector in Topeka. The credit union has nine locations in Topeka, in addition to one branch in Hutchinson. In total, Envista has about $260 million in assets and more than 33,000 members. You don’t have to be a member of a particular profession to join the credit union. Envista allows membership based on geographic location. Any resident of Douglas County, and a host of surrounding counties in northeast Kansas, is eligible to become a member.
Due to its size, Envista is able to offer pretty much all the lending services available at a traditional bank, Somers said. That includes mortgage lending, auto loans and business loans.
The Lawrence branch employs seven people, and will have a grand opening celebration at 11:30 a.m. on Friday, Somers said.
As for Intrust Bank, Doug Gaumer, the community bank president for Intrust, told me the decision to sell the branch came down to changes in how customers use bank branches.
The trend of online banking and now mobile banking via smartphones is changing the industry. (I hear a lot about the convenience of online banking, but I just don’t see it. I know I spend an inordinate amount of time trying to guess the password my wife sets each week.)
“The manner in which people are conducting their banking is definitely changing,” Gaumer said. “Technology has become more important than physical locations. I would rather invest in people here than bricks and mortar for a branch.”
Intrust continues to operate a large branch near Sixth Street and Lawrence Avenue, and has its Lawrence headquarters at Ninth and Vermont streets downtown. Gaumer said the bank is planning to use some of the proceeds of the West Lawrence sale to remodel the interior of the Sixth and Lawrence branch. He said Intrust also has added a position to the bank’s Lawrence-based commercial banking team.
“We’re confident we’re still well positioned to serve the community,” Gaumer said.
In other news and notes from around town:
• There is still one industry where location is paramount: Sewer plants. Lawrence city commissioners at their meeting Tuesday evening will take an important step toward constructing the city’s new $65 million sewage treatment plant south of the Wakarusa River.
Commissioners are set to approve the special use permit to locate the plant on 531 acres at 2300 E. 41st St. Yes, Lawrence now has a 41st Street. (I think for fun we should all hail a taxi and ask the driver to take us to 41st Street and see where we end up. I would offer to pay the fare, but I can’t get into my bank account at the moment.)
The city has renamed part of the county road that runs in front of the site for the sewer plant 41st Street. The property is just south of the Wakarusa River where O’Connell Road dead-ends at the Wakarusa River. The city renamed the road because the property has been annexed into the city, so it needs a city street name.
As for the special use permit, it is expected to be approved without much problem. The property is in a low-lying area dominated by agricultural uses. The city is creating a large buffer area to separate the plant from neighboring properties, and to ensure that the city has plenty of room to expand in the future. The city bought 531 acres at the site, but the first phase of the sewage treatment plant is expected to occupy only 15 acres. The rest of the property will remain in agricultural production. The special use permit does highlight one unusual element of the sewer plant design: A fairly large array of solar panels will be installed to provide some of the needed electricity.
City prepares to approve budget tonight, including $62 million worth of road and infrastructure projects
Here are three things that were discussed frequently on my family's recent weeklong vacation through the northern Plains: Roadwork (there was a lot of it), budgets (there was not enough of those), and "Full House" (for approximately 1,400 miles, episodes of the once popular Olsen twins sitcom played continuously, thanks to an in-car DVD player and my 7-year old daughter.)
It appears that at least two of the three will be topics at tonight's Lawrence City Commission meeting — hopefully, budgets and roadwork.
Commissioners tonight are set to give final approval to the city's 2014 budget. We've previously reported the basics: A $185 million budget that increases spending by about 6 percent and the city's property tax rate by about 0.5 of a mill. Owners of a $200,000 home will pay about $12 per year extra in property taxes, as a result of the rate increase.
But one important part of the city's budget that doesn't always get a lot of public attention is its list of capital projects that it plans to undertake in the next year. The city has about $15.2 million worth of road projects and other infrastructure purchases on its to-do list in 2014. Here's a look at some of the more notable undertakings:
• $1.7 million for reconstruction of the intersection at 23rd and Iowa streets. Expect new turn lanes and greater vehicle capacity. The project is being funded through state and federal dollars.
• $2 million for the first phase of the 31st Street extension in eastern Lawrence. When completed, the project will extend 31st Street from Haskell Avenue to O'Connell Road. Work will be going on during the same time that construction is occurring on the South Lawrence Trafficway project. The city will use property taxes to fund the project.
• $2.5 million to rebuild a portion of Wakarusa Drive from Oread West to Legends Drive. Proceeds from the city's infrastructure sales tax will be used to fund the project.
• $42,000 to begin engineering work on a future project to improve Kasold Drive from Bob Billings Parkway to Harvard Road.
• $2 million to begin work on a new Maple Street pump station to help alleviate stormwater flooding issues in North Lawrence. Funding will come from the city's infrastructure sales tax.
• $1.5 million to possibly purchase a site or begin design work for a new police headquarters facility. Funding will come from property taxes.
• $400,000 to improve the city's fiber optic and broadband system. The project will improve fiber optic connectivity between city-owned buildings, traffic signals and other structures, but also may put the city in a position to begin offering some of its fiber optic network for use by private broadband providers. Funding will come from property taxes.
• $1.05 million for renovation of the Santa Fe depot in East Lawrence. About $350,000 of the funding will come from property taxes, with the rest coming from a federal/state grant.
• $275,000 to install a traffic signal at George Williams Way and Bob Billings Parkway. The intersection is expected to become significantly busier once the new South Lawrence Trafficway interchange opens on Bob Billings Parkway.
• $750,000 to build a new public transit transfer facility. A temporary facility currently is located downtown, but staff members are exploring an area near the The Merc at Ninth and Iowa streets for a permanent facility. Funding will come from a transit reserve fund.
• $1 million to fund technology upgrades at the city and county's 911 center. Funding will come from property taxes.
• $1.2 million to replace a quint fire engine. Funding comes from both sales tax and property tax funds.
The really big builders in the city's budget, though, are in the city's Utilities Department. The city has budgeted $47.2 million worth of water and sewer projects in 2014.
A big part of that will be making your water taste better. The city has budgeted $17.9 million worth of work to improve taste and odor issues that occasionally occur when algae blooms become significant at Clinton Lake or on the Kansas River.
I would expect this project will get more discussion before commissioners actually approve any spending on the project. By putting it in the 2014 budget, that gives the city the legal authority to spend the money on the project, but commissioners may still decide that's too much to spend on the intermittent taste and odor issues.
The other big utilities project is $14.8 million worth of work on a new sewage treatment plant for south of the Wakarusa River. This will be a multiyear project. When it is done by 2017, the project is expected to cost about $65 million.
Those projects will be funded by increased water and sewer rates, which also are up for approval at tonight's meeting. The budget proposes an approximately 5 percent increase in the monthly water and sewer bills for an average household. That comes after commissioners approved a 6 percent rate increase in 2013.
A household that uses 8,000 gallons of water a month would pay $76.21 in monthly water and sewer fees, up from $72.34 under the current rates. City staff members have put together a chart that shows how Lawrence's rates compare with other cities in the area. An 8,000 gallon bill ranges from $61.69 in Manhattan to $102.65 in Gardner. Click here to see the full list.
Commissioners meet at 6:35 p.m. today. This basically is the last chance for the public to make comment about the 2014 budget. Historically, the city's budget discussions haven't produced a full house. But who knows? Maybe it will tonight. I'm fine either way — as long as I don't have to listen to the Olsen twins.