During a work session of the city commission this week, commissioner Leroy Koehn was looking at a piece of paper that gave him heartburn.
Across the top it read “Summary of primary budget issues potentially impacting city mill levy.” That effect, according to city manager Bob Myers, would be a tax increase of more than six mills if other budget adjustments are not made.
“One of the things that gives me heartburn thinking about it is we have raised the mill levy the past two years,” Koehn said. “Thinking about a mill levy increase, for the third year in a row, is a pretty daunting proposition. I am not saying no, absolutely not, but I wonder what our (residents) response will be. They have been fairly understanding up to this point.”
That summary sheet contained general fund budget enhancements of $237, 601 (about 1.933 mills) and external agency requests of $97,500 (about .792 mills). Also listed is the bond and interest fund, used to pay down bond debt, set at $439,832 (about 3.58 mills.) The mill levy is the tax rate applied to the assessed value of a property. One mill is $1 per $1,000 dollars of assessed value.
The city generates about $122,966 from each mill levied. According to the Harvey County Clerk's office, the 2017 levy for Newton stood at 60.326 mills — 6.173 mills were levied for bond and interest funds
Those budget enhancements include another detective and lieutenant for the police department, a part time building inspector/technical clerk and electronic ticketing software. The external requests include Health Ministries, the Chamber of Commerce, Grand Central and Caring Hands Humane Society.
The commission also took a look at a list of several projects that may be bonded this year including street work, sewer projects, and a stormwater retention project at the airport. The 11 project list is estimated to cost $3.5 million. The $3.5 million new project budget is pretty par for the course for the city, according to city staff.
Those projects, however, are not necessarily the big budget issue. Paying off current bond debt, much of it “backloaded,” is creating budget pressures.
“As we have gone down the years, the price has gone up on those,” Myers said. “While we have had a few things drop off, that has been more than made up for by some of that. That is just reality and there is nothing we can do about that now.”
The city will have 4.4 million in bond and interest payments due in 2019. If the city makes no adjustments to the revenue used to pay that bill — property tax levy, transfers from other departments, sales taxes and special assessments — the city will be $444,000 in the red.
“We do think there are some sales tax funds that we can use,” Myers said. “... Looking down the road, we are not going to see significant relief in bond and interest for several years. After that we have some coming off.”
It is unclear what else is available to the city. What is clear is that Koehn wants to see at least one budget proposal that contains no increase to the mill levy.
“We need to have at least one option of that (without a mill levy increase),” Koehn said. “Along with several other options. ... and are we willing to do a (smaller) ending balance or what are we going to take from."
No decisions were made about the budget. The commission will host a budget work session June 26, and another July 10. The calendar calls for publication of the budget in July.
In other business the commission:
• Swore in new member Rod Kreie to finish a term vacated by former Mayor David Nygaard. The term will end Jan. 1, 2020.
• Approved a special event application for the Harvey County Fair Fair and waived all fees for the fair.
• Recognized Sand Creek Station Golf Course for being named the top golf course in the latest National Golf Foundation customer satisfaction and loyalty survey.
• Discussed a curb cut at 725 N. Main to serve Cornerstone Law and Vogt's Construction. The commission directed city staff to meet with Corner Stone Law to try and move a Kansas Department of Transportation application for the project.
• Approved changes to a Planned Unit Development at 101 W. Highway 50 for an R.V. Storage facility owned by J.S. Mitch Properties.
• Approved plans and specifications of a grading project at Rolling Hills Sixth Addition and set June 28 as a bid date for the project.
• The commission awarded a bid for a drainage project along Slate Creek that will restore the banks of the creek and improve drainage. The low bidder was Vogts-Parga Construction at $145,246.00.
• The commission also reviewed bids for drainage improvements in Centennial Park, creating a drainage area from north to south. The bids came in a higher than budgeted, however the city chose to approve a bid and allow city staff to negotiate with Vogts-Parga on the project, which was the low bidder at more than $45,000.