Lawrence City Commission approves property tax increase to save City Hall jobs, boost library funding

photo by: Mike Yoder

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

Lawrence city commissioners on Tuesday saved a few jobs, raised the property tax rate a bit and learned the Lawrence Public Library has more legal muscle than once thought.

Commissioners at their meeting unanimously approved an approximately $240 million budget that increases the property tax rate by 0.53 mills. The property rate increase will cost the owner of an average $170,000 home about an extra $10 per year in city property taxes.

“This is a compromise budget,” City Commissioner Stuart Boley said. “Sometimes compromise is seen as a bad thing, but I see it as a coming together of the community. This budget provides structural balance.”

Commissioners resisted calls by some members of the public to dip into city reserve funds to pay for items. Instead, they raised the property tax rate.

The bulk of the new tax dollars will be used to provide additional funding to the library, but commissioners also agreed to keep the city auditor position, retain the city’s director of arts and culture and reinstitute a longevity payment program that gives city employees a bonus if they have been with the city for more than five years. City Manager Tom Markus had recommended cuts to all those programs and positions in an effort to balance the budget without a tax increase.

Not everyone left happy, though. The Lawrence Arts Center sustained a $55,000 cut in funding for maintenance of the city-owned building that houses the Arts Center. City commissioners also did not include funding in the 2017 budget to convert a portion of East Ninth Street into an arts corridor. They did, however, indicate that they would be ready to fund the much-debate project in 2018 after the design of the project is further refined.

City commissioner Matthew Herbert said he didn’t support the cut in funding to the Arts Center. City Commissioner Lisa Larsen said she had wanted to avoid a property tax increase. In the end, all five commissioners voted to approve the budget.

“My preference would be to not raise the mill levy, but I’m willing to compromise on that,” Larsen said. “But one thing I don’t think I can do is use reserve funds. I think we have some tough years ahead of us.”

Markus also urged commissioners to resist the urge to dip into the city’s primary reserve fund. He said a new tax lid that will become law for the next budget year may cause the city to use reserve funds in the future.

“I think you are going to find out that you will have to use some of it next year just to balance the numbers,” Markus said.

The Lawrence Public Library may have been the biggest winner of the evening. The library got an extra $255,000 over and above what was called for in Markus’ recommended budget. The additional funding will be used to upgrade staff salaries, which library leaders said had become noncompetitive. Library leaders won the additional funding — which accounted for nearly a 0.3 mill increase — through legal maneuvering.

Commissioners last month were told by a local attorney that the city’s charter ordinance governing the library actually gave the city’s library board — made up of appointed, not elected, officials — the ability to determine what the tax rate for the library should be, as long as the rate doesn’t exceed 4.5 mills. That’s contrary to what the City Commission has believed. The City Commission has long received a recommendation from the city’s library board, but commissioners have had the final say on the tax rate for the library.

But City Attorney Toni Wheeler told commissioners on Tuesday that the city ordinance actually requires the City Commission to accept the recommendation from the library board, as long as it is no greater than 4.5 mills.

Wheeler, though, said the City Commission could vote to change the charter ordinance, making it clear that the final taxing authority rests with the City Commission. But she said that change couldn’t be implemented in time for the 2017 budget. The city perhaps could have resisted granting the tax increase by applying the approximately $1.2 million in debt payments the city makes for the recently constructed library building to the property tax cap formula. But Wheeler noted that action could be disputed. Mayor Mike Amyx recommended against it.

“I don’t think we want to get into a challenge right now,” Amyx said.

But Amyx said the city was reserving its right to change the ordinance in the future, and also reserving the right to apply the debt payment to the library’s property tax cap. Amyx said he wanted to be clear that the city wasn’t creating a precedent that the library could automatically raise its mill levy more in the future.

As for other budget changes, much of the 45 minutes of public comment came from residents urging the city to keep the existing director of arts and culture position. Commissioners had previously signaled that they would find the funding to keep that $105,000 position. Less certain was the position of city auditor, which is a position that reports directly to the City Commission and provides findings about how the city could improve its operations.

Larsen previously raised the possibility that she may not support funding the $124,000 position for 2017. On Tuesday, she said she was fine with keeping the position, as long as it received a thorough review in the next year.

“We can take a hard look at the quality of the reports and the quantity of the reports,” Larsen said. “Should we be getting more out of that position? That is what I would like to evaluate at this point.”

Commissioners are scheduled to give final approval to the budget at their Aug. 16 meeting. City homeowners also will be watching the budget processes conclude for Douglas County and Lawrence Public Schools. The county is in the process of approving an approximately 3 mill increase to the property tax rate, while the school district expects to see a mill levy decrease. All three budgets will be finalized by late August.