photo by: Chris Conde

Lawrence City Hall is pictured in September 2018.

As part of his recommended budget, Lawrence City Manager Tom Markus is proposing a 0.5-mill property tax hike that will help fund, among other things, the first across-the-board wage increase that most city employees have seen in years.

The proposed mill levy increase would amount to about a $12 increase in annual property taxes on a $200,000 home. The recommended budget also calls for utility rate increases that would amount to a $78 increase for the average resident. Taken together, the owner of a $200,000 home would pay about $90 more in 2020, amounting to an increase of about 4.7%.

The recommended 2020 budget was released Thursday evening. The recommended operating budget totals about $236 million and will be presented to the City Commission for initial input at its work session Tuesday.

As far as expenses go, Assistant City Manager Casey Toomay said there are three main drivers of the property tax increase. Those are a general wage increase for nonunion employees, or employees not working in the police or fire and medical departments; additional pay adjustments for nonunion employees to bring certain positions up to market rates; and hiring three additional Lawrence-Douglas County Fire Medical employees.

Regarding the pay raises, Toomay said that though the city has provided market- and merit-based pay increases to some nonunion employees over the years, nonunion city employees have not received an across-the-board wage increase since the recession of 2008. The city recently contracted with a consultant to complete a compensation study, which recommended the various pay increases. Toomay said that the study was done because it’s important for the city to offer competitive pay, and that the city needs to follow through with those recommendations.

“The results came back and showed that in some areas we were very market competitive and in others we had fallen behind,” Toomay said. “Our employees are an important resource and it’s important that we attract and retain qualified employees — and part of that is offering market-competitive wages.”

However, Toomay said those efforts need to be balanced against available financial resources. Although the city made attempts to do that, she said, additional tax support is still needed to provide those pay increases.

Apart from increases in expenses, Toomay said there are also revenue-related drivers behind the tax increase, including slower-than-anticipated sales tax growth.

Though the city is holding the projected growth rate at 2%, Finance Director Jeremy Willmoth explained that because the sales tax collections this year have slowed considerably, the city is expecting to collect less in sales taxes next year than it once thought. Revenue projections are also based on projected increases in property values, and Willmoth said the city expects to update the sales tax and assessed valuation increases in early July. Currently, the budget assumes a 4.5% assessed valuation increase.

City utility bills are made up of charges for water, solid waste and stormwater. The recommended budget calls for an 8% rate increase for water, a 3% rate increase for solid waste and a 3% rate increase for stormwater. Willmoth said the largest drivers of the utility rate increases are utility maintenance and improvement projects included in the city’s capital improvement plan. However, he said another change in Markus’ recommended budget is also contributing to the rate increase — a measure that would require some city departments to contribute more of their own funds to the city’s general overhead costs, such as human resources, IT and finance administration.

Even with the property tax and utility rate increases, a significant amount of requests went unfunded. In a letter to the commission, Markus states many tough decisions had to be made to balance the recommended budget, and that the budget eliminates some vacant positions and leaves many department projects, personnel requests and equipment needs unfunded.

More specifically, the recommended budget eliminates 1.5 vacant Parks and Recreation Department positions. The position cuts would be accommodated by eliminating general public access to the Community Building, which includes basketball courts, cardio equipment and a weight room. The budget also includes a more than $600,000 reduction in the recreation budget, which calls for recreation centers to collect entrance fees and for other recreation fees to increase. The recreation division’s proposed budget was presented to the Parks and Recreation advisory board on Monday.

The budget includes about $10 million in unfunded capital improvement projects, personnel requests and equipment purchases. Of those, Budget and Strategic Initiatives Manager Danielle Buschkoetter highlighted an approximately $1.4 million request for merit increases for nonunion employees as well as funding for street and other infrastructure maintenance projects. She said those projects must now be delayed.

“We acknowledge that we have a lot of deferred maintenance in the community,” Buschkoetter said. “And it’s one of those things that at some point we are going to have to address at a higher level than I think we’re able to address right now.”

Buschkoetter said that includes a large portion of the street maintenance funding request that was left unfunded. The recommended budget allocates about $7.5 million toward the city’s street and curb maintenance programs, but leaves an approximately $3 million request for additional street and pavement replacement unfunded.

The recommended budget will be presented to the City Commission at its work session Tuesday. The work session will begin at 3 p.m. Tuesday at City Hall, 6 E. Sixth St.