In attempt to avoid a property tax increase, Leavenworth City Commissioners suggested several spending cuts for the proposed 2014 budget including the elimination of contributions to the Leavenworth Main Street Program and the Leavenworth County Development Corporation.
The proposed cuts, which included measures that may impact city employees, were discussed Friday afternoon at the conclusion of three days of budget work sessions.
Commissioners have taken no formal action on the budget. City staff members are expected to present options for additional cuts when commissioners meet Tuesday night.
City staff had recommended a 1.73 mill levy increase for the proposed $25.3 million budget. This proposed tax increase was intended to fill a $337,000 gap between revenue and expenses.
Finance Director Dan Williamson said Friday that the city will not have to pay as much to the Kansas Police and Fire Retirement System next year as previously thought. He said this will reduce budgeted expenses by $15,000, shrinking the budget gap to $322,200. He said this decreased the recommended mill levy increase to 1.652 mills.
When it came time Friday to discuss what commissioners wanted to do, Commissioner Larry Dedeke was the first to offer his opinion.
"Right off the top, I'm opposed to a mill levy increase," he said.
He supported the elimination of the city's downtown parking enforcement program as well as the contribution the Leavenworth Main Street Program.
Williamson said the elimination of the parking program will cut $45,920 from the budget. Cutting the Main Street contribution would save $50,000.
The city paid the Leavenworth Main Street organization, which promotes the downtown area, $50,000 this year. And Main Street officials requested the same amount for 2014.
Main Street's Executive Director Wendy Scheidt, along with accountant Sherry DeMaranville, met with commissioners during Friday's budget work session.
Scheidt and DeMaranville had left by the time commissioners discussed cutting the contribution.
When contacted later for comment, Scheidt the money that traditionally has been contributed by the city was a small investment for the work Main Street does on the city's behalf.
Page 2 of 4 - "It's devastating news," she said.
She said Main Street officials will have to take things one day at a time in light of the proposed cut.
Dedeke said Friday that he was on the City Commission when Leavenworth Main Street was created in the mid 1990s. Dedeke said he believes there was an agreement at that time for the city to subsidize the program for only five years.
"They need to stand on their own," he said.
Mayor Pro-Tem Mark Preisinger had additional suggestions for reducing expenses in the budget including the elimination of the contribution to LCDC.
"I will not vote for a mill increase of any kind," he said.
Preisinger said he supports LCDC but "we don't have the funds to give away."
Steve Jack, LCDC's executive director, also met with commissioners Friday but was not present during the discussion about cutting the city's contribution to his organization. LCDC had requested the city provide a $47,508 contribution for 2014.
When contacted later for comment, Jack said there's been an agreement in place for more than a decade for Leavenworth and other entities in the county to jointly fund LCDC for economic development.
"This obviously changes that relationship for the first time in over a decade," he said.
Jack said he doesn't know yet how such a cut would impact LCDC's work to bring businesses to the city of Leavenworth.
He expressed concern about the signal the commissioners decision sends to other cities in the county that traditionally provide funding to the LCDC.
Jack is scheduled to provide a quarterly report about LCDC's activities to the Leavenworth City Commission Tuesday during a study session. He still plans to appear at the meeting.
Page 3 of 4 - Preisinger said, based on information from Main Street and LCDC officials, the two organizations have enough in their reserves to cover the loss of the city's contributions in 2014.
Among the other cuts proposed during the city commissioners' discussion is the scaling back of the proposed salary increase for city employees from an average of 2.2 percent to an average of 1.75 percent.
Williamson said this would save about $32,000.
There also was a suggestion for scaling back the budgeted increase in the amount the city pays for providing employee health insurance.
Williamson said this could save $50,000.
City officials recommended not hiring a new Animal Control officer to fill a position that temporarily has been left vacant. This would save $24,380.
It also was suggested that commissioners could cut back on the number of people who make an annual trip to Washington, D.C., to meet with federal officials. Williamson estimated this would save $5,000.
Factoring in these various cuts, Williamson said city officials still are faced with $67,410 that has to be cut from the budget to prevent the need for a mill levy increase.
Williamson and City Manager Scott Miller said they will come up with options for additional cuts and present them Tuesday.
"We'll find it," Williamson said.
He cautioned commissioners against looking at the cuts as only being temporarily. He said trying to get the things being cut put back into the budget in the next year or two is going to be difficult.
Dedeke also suggested putting a proposed half-cent sales tax increase before voters with the idea the increased sales tax revenue could reduce the city's property tax rate.
Page 4 of 4 - Williamson said a half-cent sales tax increase could allow the city to reduce it mill levy by 9.3 mills.
However, Williamson said it's too late to implement a sales tax increase to affect the 2014 budget. A sales tax increase, if approved by voters, could impact the 2015 budget.
Williams suggested the sales tax issue could be placed on the ballot for a special election in April.
"I'm kind of liking that suggestion," Commissioner Lisa Weakley said.
Williamson said he thinks a sales tax increase for the purpose of reducing property taxes kind of sell itself if city officials can explain it to people.
Preisinger also proposed offering people temporarily tax incentives for building homes in Leavenworth.
"We have to broaden this tax base," he said.
Dedeke said he would be more in favor of offering incentives for commercial properties.
Mayor Laura Janas Gasbarre said commissioners are going to expect a lot more from city officials in terms of economic development.
Miller said the city may have to provide economic incentives.
Williamson said he agrees the city needs to grow its tax base but warned against giving away too much in potential tax revenue through incentives.
"You always have to be careful with incentives," he said.