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Total budget is $12,300,558, this includes all funds of the city. This equates to 5.7% of the total budget.
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The increase in the property tax and the expected revenue generated from a sales tax total $702,000. The estimated loss of sales tax revenue from the relation of Walmart is anticipated to be around $700,000. Funds from an additional sales tax, if adopted, could be used to restore some or all of the service cuts in the previous budgets.
Resolutions adopted by the City Council are often used as way to express an opinion. Resolution 630 is not binding on future Councils; however, it does contain the intended uses for the sales tax funds as seen by the same City Council members who authorized the issue to be on the ballot.
Following the town hall meetings the community events budget for FY14 was cut in half and the Roe Boulevard Design elements and entryway updates were eliminated from the FY14 budget.
The City currently does not have an "emergency reserve." There is a general fund reserve, a bond and interest reserve and an equipment/building maintenance reserve.
If the sales tax is adopted, that will be a decision of the City Council. With restoration of services being the third on the council’s priority list as set forth in the Resolution 630, specific restored items are not guaranteed, but it is intended that they would be discussed if the other two higher priorities were addressed. A few examples of other service items that have been removed from the budget during the past few years include: tree trimming and public works summer help.
Under the budget model discussed during the summer of 2013, the deputy chief’s position will not be funded until January 2016. During that time the new chief of police can review current staffing models for possible alteration.
The Governing Body did not approve a three year budget. However, the Governing Body did forecast revenue and expenses for a period of three years. If the proposed sales tax is adopted, the Governing Body could consider the different many different uses for the sales tax, but they have stated a priority of intentions as outlined in Resolution 630. It generally states the priorities as first the emergency maintenance reserve would be funded; then general infrastructure needs would be considered, then service reductions could be considered and mill rate reduction.
A reduction in the property tax rate after the first three prioritized uses of funds have been considered. In addition, since the Governing Body did not know if the sales tax would pass, the potential revenue from the sales tax was not included in the 3-year budget projections.
In the past, the City used a mill and overlay for street maintenance. Now, other less expensive, shorter term, surface life extension techniques such as chip and seal and crack and seal are used more frequently. Additionally, there were many years where street maintenance was funded around the $400,000 level. In the FY14 budget, contracted and in house street maintenance is funded at $280,000.
The FY12 CARS project, Roe Boulevard phase 1 was constructed and consisted of curb repairs, remedial full depth patches, striping, sidewalk repairs and striping. The FY13 CARS project, Roe Boulevard phase 2 (surface treatment) was scheduled but has been deferred to the year 2015. The 2015 project is also set to have Federal Grant money for 48th and Roe intersection improvement. FY14 CARS project is currently slated for Nall Avenue, however, some minor repairs were done by Public Works crews in an effort to further its life beyond 2014.
The CID additional 1% tax was requested by the property owner. The property owner could also petition the City asking that it be removed from the property. If the property owner does not request that it be removed then it will remain in effect as it is today. The use of the CID funds could be used to improve the new tenant’s space if that is how the owners of the property would like to use the funds and the City agrees.
Many do not realize that the Walmart building is not owned by Walmart or the building but it is owned by a group called the "Roeland Park TMM, LLC". The City has been working with the property owners to provide the necessary economic incentives to all them to create an attractive site for future development/re-tenanting. The City has provided ideas of possible tenants it would like to see; however, ultimately the decision is the property owners on who they will rent the property to, within the limits of the CID. The following is a long list from the CID agreement which lists business that will not be permitted and specifies restrictions on the businesses for which it may be used:
NW Roe and Johnson - This property has been sold to Commerce. The City is working with them on the possibility of getting a 2nd tenant on that site.
NE Roe and Johnson - The City is working with volunteer architects and designers and talking to different development consultants. The mayor, a couple of Council members and staff are working on different methods to move forward with development of this property.
4800 Roe (Old Pool Site) - This site has much potential, but also the most challenges including caves, a steep slope and difficult access on Roe. We have met with the County and are looking at trying to adjust the boundaries of two tax increment financing (TIF) districts so developers will have a more direct path at understanding development.
Most importantly, the City has no Development Department or staff and minimal funds to work with from the budget. The Mayor, Council, a couple specialists and some volunteers and others are giving much time to advance these sites in a responsible manner.
It is our understanding from the private property owner that the current lease with Walmart runs through July 2016. During the FY14 budget process time period, a senior manager of public affairs and government relations from Walmart reaffirmed in an email the company’s intention to move to Mission and that current timeline was for a March 2015 departure or very shortly thereafter.
This could be an outcome, but that would be a decision of the Governing Body. The Council recently passed a resolution delineating a priority list for possible expenditures of the funds.
The sales tax projection is based on current sales totals minus the estimated impact, which is the loss of sales from Walmart and its impact on surrounding businesses as estimated by outside experts. For our ad valorem income, City staff projected that property tax values would decline slightly in 2014 (based upon trend for the past several years) and then level out during 2015 and 2016. It is difficult to estimate property value appreciation much beyond the next year. The county appraiser will provide the final total of assessed value on July 1 of each year for the next year’s budgeting purposes.
The ballot language for the "27B" sales tax was approved to be used for the following purposes:
No projects have been paid directly from the 27B Fund since prior to 1997. The last two times Roe Boulevard was worked on, mill and overlaid (2006) or had curb and surface repair work completed (2012), the projects were not paid for from 27B sales taxes.
The City will continue to do its best to respond to media inquiries as they are made. The City will have a mailing containing facts about the sales tax but will not advocate for or against the election such as the encouraging residents to "vote no" or "vote yes".
There was discussion about funding the leaf program as part of the solid waste assessment on the June 3 Committee of the Whole meeting and June 3 Council meeting as well as in the July newsletter.
Kansas Statutes only allows up to 1% sales tax to be dedicated to a special purposes and up to an additional 2% which can be dedicated to general purposes. With the current sales taxes that are in place there is insufficient space under the state imposed cap to have an additional restricted sales tax at the 0.35% rate. Therefore this sales tax has to be for general purposes. Because of this, the City Council passed Resolution 630 which outlined intended uses for this fund.
It depends on what threshold one would consider enough in order to have a "surplus." The Government Financial Officers Association (GFOA) recommends a General Fund reserve of at least 16.7% of the general fund in normal economic conditions. With the expected loss of Walmart one could make the argument that these are not normal economic conditions and it would be prudent to err on the conservative side. Additionally, many communities in Johnson County far exceed the GFOA recommendation, and in some cases have reserves as high as two or three times this minimum.
Approximately $18,150 paid to the Johnson County Election Commissioner's Office to conduct the election.
The City does not currently have a copy of the Walmart lease and therefore is unable to answer this question at this time.
The owners of the property where Walmart is located have informed us that they have prospects, but have not provided details at this time.
We are not able to speculate on this item.
The program costs $28.06 per household, with 2,845 households, for a total of $79,830.70.
The governing body made the decision to put the vote on the sales tax before the voters in order to be proactive to the economic conditions forecasted with the leaving of Walmart.
See the Losses Referenced in Charts page for full information.
The City is unsure how long it will take for the owner to re-tenant the property, therefore we have projected anywhere from 1 to 7 years. The City is asking for this sales tax rate for a period of 5 years, beginning April 1, 2014 and expiring in March 31, 2019. The sales tax can be terminated early by the City Council. To extend this sales tax it would take another vote of the people.
The City issues municipal bonds for major street/capital projects. When the City has another capital project, it will review the possibility of issuing bonds. The City’s current municipal obligations are represented in the following graph: