Manhattan City administration has shaved off more than 2 mills from the proposed 2020 budget since the first City Commission budget work session in May, but Commissioners want to see the property tax burden further reduced. They discussed the proposed budget at their Tuesday meeting.
As it currently stands, the proposed 2020 budget features a 2.31 mill increase over 2019 based on a mill value of $585 ,000. Homeowners with properties valued at about $200,000 saw property values rise $3,600 and would see a monthly property tax increase of $6.33, a total of $76 annually.
Broken down, 0.276 mills of the increase would go to the general fund, 1.070 mills to the bond and interest fund, 0.855 mills to the employee benefit fund, 0.088 mills to the fire equipment reserve fund, 0.080 mills to the Kansas police and fire fund and 0.182 mills to the Manhattan Public Library. Riley County Police Department property tax funding was worked down by the department and Riley County Law Board to be a decrease of 0.232 mills.
Some of the budget changes that were made to decrease the mill included the elimination of general fund support for three positions while they try to find other revenue sources to offset their labor costs and the reduction of the personnel buffer — intended to cover unanticipated labor costs such as additional overtime hours — by half, leaving about $107,000. Finance Director Bernie Hayen says they didn’t budget for a buffer this year and that the commission may want to consider removing it from 2020’s budget outright.
Another possible reduction from the general fund could be the city’s budget for the RCPD delinquency rate. That fund is a reserve intended to cover RCPD operations costs if property tax collections fall short due to delinquent property tax bills. Hayen says they could do that in steps or just remove it entirely, which amounts $318,510 or 0.544 mills. If they cut it in half the city would remove 0.272 mills from the overall mill increase and a reduction by 3/4 would cut the mill levy by 0.408 mills.
“If they’re short in property tax collections because of delinquencies in 2020, then we would likely have to make it up,” Hayen says. “And that has happened in the past, it’s one reason we put that delinquency rate in there even though it does cause a bump in the mill levy.”
Commissioner Wynn Butler also proposed funding the Flint Hills Metropolitan Planning Organization and Transportation Agency through Economic Development funds rather than the property tax funded general fund.
“That plus the personnel buffer and the RCPD, if we drop it to $79,000 in that delinquency fund [the 3/4 reduction]you’re pretty close to a mill right there,” Butler says. “Before Ron [Fehr] has to chop anything really critical.”
City Manager Ron Fehr cautioned that there’s some risk associated with that if the EcoDevo sales tax isn’t renewed when it comes back to the voters in a couple years, but adds that the account is well-funded at this point.
Commissioner Linda Morse recommended that Hayen and administration look into fees that have been stagnant over the years compared to other first class cities in order to increase revenue and decrease the necessity to raise property taxes. She also says she’d like to get under 2 mills to around a 1.5 mill increase.
“I want to be reasonable, my electric bill has gone up a whole lot more than what we’re talking about tonight — everything I do has gone up,” says Morse. “I know that the cost of city government go up, but with that sales tax I think we can really try to keep our mill levy down.”
Mayor Mike Dodson says they need to be mindful that based on current proposed budgets and the recent USD383 bond issue, residents will see a boost near 10 mills “across the board.” He also repeated a previous request to see specifics of what the impact would be of reductions at various mill intervals to be able to visualize what the overall loss would be from further cuts.
“We need to be able to see what the real inference is of the loss,” says Dodson. “I’d like to start off with a look at a one mill — $585,000 — [decrease]from where we are today just to know what it is, whether it’s five trucks or something.”
Butler says he’s for driving the mill levy “all the way down” due to the sales tax ballot question on the November ballot. Commissioner Jerred McKee agreed, saying one mill is a good start, but would like to see what a zero mill increase would look like as well.
“When me and Commissioner Butler agree that should be noted,” says McKee. “I want a good understanding of what the difference between zero and one [mill increase]looks like.”
Mayor Pro Tempore Usha Reddi also advised caution about the mill levy in the face of stagnating revenue, advocating for keeping it as low as possible for the next couple of years, but was unsure about cutting the RCPD delinquency fund as she was on the commission during a year property tax collections did fall short and a delinquency fund would have covered the additional costs. She also disagreed with tying the sales tax discussion to the current discussion of the budget.
“The sales tax initiative is going to go for projects, it’s not going to be a buffer for any of the things we’re talking about.”
Butler disagreed, saying 60 percent of the budget is sales tax funded and that if the voters don’t approve it in November they’ll have to do some “serious slashing of budget next year.”
Reddi also asked about what impact they’ll see on sales tax collections as a result of the loss of Symphony in the Flint Hills and Country Stampede. Hayen says the city will see a dip, but he doesn’t anticipate the decrease to be in the hundreds of thousands of dollars based the 10 year average of the months before and after June — the month when the Stampede is held — but full sales tax numbers don’t come in until August.
“May was about $558,000 on average for sales taxes, June was $561,000 and July — which is always lower — was about $535,000 or so,” says Hayen. “So there’s a little bit of a bump, and we do know anecdotally [..] I could tell you Walmart will simply suffer somewhat by Stampede not being here this year.”
Outside agencies that receive funding from the Manhattan general fund requested an overall increase of $167,050 in the proposed 2020 budget. The City Commission heard requests, but made no approvals.
The Social Services Advisory Board recommended a funding increase of $30,500 dollars for 11 agencies over 2019’s funding. Multiple agencies would see their funding from the city stay flat. The biggest increase requested was for the Manhattan Emergency Shelter — accounting for $20,000 of the increase. Following that is the Boys and Girls Club — which was recommended for a funding boost of $15,250. Big Brothers and Big Sisters were recommended for a $7,000 decrease and the KSU Child Development Center were recommended to have funding reduced nearly $1,000 back to its 2018 funding level.
Some of these agencies are also funded by special alcohol programs fund, which is supported by the state tax on alcoholic beverages served at bars, restaurants and catering events — overseen by the Special Alcohol and Drug Programs Advisory Board. The money distributed is dependent on the amount of collected tax revenue and is used for drug and alcohol treatment, education, intervention and abuse prevention. Overall, they income from such sales decreased from $490,800 to $485,800 based on that revenue. Pawnee Mental Health was recommended for a $10,000 boost in funding to $85,000, Riley County Community Corrections Adult Services was recommended for a $7,000 increase to $25,000 and KSU AODES was recommended for a $3,000 raise to $18,000. Many stayed flat with their 2019 funding totals. Those seeing recommended decreases included the Friends of Recovery by $5,000, Sunflower CASA by $3,000, the Restoration Center by $20,000, and USD383 education services by $10,000. Receiving funding recommendations for the first time was the Wonder Workshop to the tune of $13,800.
The Manhattan Public Library’s funding will remain under the charter-mandated 6 mill cap under the current proposed budget. The Library will see funding from the general fund increase by $110,000 dollars. Additionally, they’ll see an increase of more than $33,000 from the employee benefit fund — in part to make up for KPERS shortcomings by the state. Including reductions elsewhere, its budget will see a net increase of $116,000.
Additional agencies requesting funds include the Manhattan Arts Center, which requested a $2,300 increase to $46,000. The Aggieville Business Association, Downtown Manhattan Inc. and the Flint Hills Area Transportation Agency all requested the same funds they received in 2019 with no increases — $60,000, $78,000 and $129,884 respectively.