2012 budget discussions continue; water service cost increase likely

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Much of the City Commission’s second work session dealing with the 2012 city budget was devoted to discussion of the financial arrangement between the city and the Riley County Police Department.

Currently the RCPD requests a certain amount of funds from tax revenues, but if those revenues are not collected, the city has been expected to make up the difference.

“Here’s our budget and if we can’t make it, you will make it up,” city commissioner Rich Jankovich said of the RCPD arrangement.

The delinquency rate, or percentage of property tax income not collected, runs between three to 12 percent.

“They tell us what the budget is and we have to level the amount,” city attorney William Frost said. “This issue is whether we are going to guarantee that funding.”

A law board comprised of representatives from both the county and city governs the RCPD. Commissioner Wynn Butler said further communication with the law board is needed.

The commission plans to revisit the discussion of how to handle a property tax shortfall should the board be unable to come up with a solution.

The RCPD budget for 2012 is $13,054,500, which is a large portion of the total proposed city budget of $24,813,599.

A 3 percent shortfall in funding of the RCPD due to delinquencies could have serious consequences for the city.

“What cuts would there have to be if we can’t get this from the law board?” commissioner John Matta said.

The rate of delinquencies of taxes due to the city and how the city handles the shortfall of those funds can also affect the mill levy and city reserves.

The 2012 city budget includes RCPD, the Manhattan Fire Department, the public library, parks and recreation, utilities, public works and many other programs.

The 2011 projections indicated revenue would exceed expenses by 25 percent, a good sign for the city. The 2012 budget reflects a 7.4 percent increase from last year but is offset by increase in other revenues and a small increase in property taxes.

Some of the budget increase includes the cost of staffing two new fire stations and the Flint Hills Discovery Center.

No new property tax is anticipated for the Discovery Center’s operational budget.

The majority of operation costs for the center have come from the 1 percent transient guest tax charged to hotel and motel guests. In 2012, the center will receive the equivalent of a 2 percent tax with the other 1 percent from the Convention and Visitors Bureau budget funds.

The total current transient guest tax rate charged in Manhattan is 6 percent, the same as in Olathe, and in the mid-range of guest taxes charged in other Kansas cities.

The Discovery Center has a smaller footprint than other museums and admission fees with be lower than other museums in Kansas. The 2012 earning projections for the center include $295,500 in admission fess and $60,000 in gift shop revenues. The average ticket price will be $6.50.

The 2012 Capital Improvements Project’s budget has been reduced from that of 2011, but the change is mostly due to a one-time cost last year of $23 million for a wastewater plant upgrade.

Among the CIP budget items are expanded parking at Manhattan Regional Airport. City manager Ron Fehr said there is a need to expand the parking and parking fees might be proposed to fund the lot, not in 2012, but perhaps in years in the future. There is currently no charge for parking.

Water customers will likely see an increase in their bills in the next year.

The city is proposing a 5 percent increase in the storm water fee. A major reason for the increase is the projection of $2.6 million in levee improvement to comply with the unfunded federal mandate of levee certification required by FEMA.

There may also be a 15 percent increase in wastewater fees. Fehr noted the increase was less than the 20 percent increase proposed last year.

There may potentially be a 7 percent increase in water fees. This will not affect the rates of most residential customers but will result in an increase for the city’s larger water customers as a result of a change in water rate structures.

There are some proposed rate increases in costs to developers to establish water and utility lines.

Some citizens are concerned this new commission will cut and/or eliminate funding for some social services in Manhattan. The current commission has three new commissioners since last year’s budget was decided. This commission clearly has different priorities from the last commission; they have overturned a anti-discrimination policy and a rental inspection program both passed by past commissioners.

June 28 will be the third budget work session and most of the meeting will be presentations from outside agencies for their 2012 budget requests.

Total budget requests from these agencies, most of which provide social services, totals just under $800,000. In the proposed budget these agencies are facing 12 percent in cuts.

There are other issues the commission wants to take a closer look at in these budget sessions. Butler wants to look at the total cost of travel and mileage for city.

Commissioner Loren Pepperd asked about communication costs including two-way radios and cell phones for city employees.

There are five more meetings in the budget process which is scheduled to be completed August 16.

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