Monday, August 31, 2015



Budget questions - Rick Jankovich



1. What is your view of the property tax levy:  too high, about right or too low. If too high how would you reduce it?
I believe the mil levy is too high in an all in perspective (city, county, USD 383). This covers all aspects of “local” government. I believe specifically that from the city side we have done a good job of holding the property tax burden on direct city related burden down. To understand this, the composition of the City’s Mil Levy of 43.439:  28.657 is dedicated to RCPD; approx. 5 mils are for the Library and their employee benefit fund leaving only 9.78 mils for city expenses. With 5.412 going toward the bond and interest fund that leaves 4.638 for general city expenses. So the “City” piece is not very large. The first issue is to look for savings from duplication of services with our partners, RCPD and Riley County and look for purchasing savings with our regional partners. Our debt is another issue and we need to be good stewards of projects and their impact to the tax payer. Lastly, as bond issues can be refunded to garner a lower interest rate, as savings to the tax payer, we should evaluate those opportunities while the interest rates are low.

Which Social Service Agencies should the city be responsible for funding, at least in part?
2. The SSAB is a terrific clearing house for the funding requests. The level of funding is reasonable at this time and has two sources of funds:  direct from the general fund and the “water bill” funds. While water bill initiative did not garner the momentum expected it does provide some additional funds to the social service agencies funded. The services funded from the general fund are tied to children, legal assistance, families in need, etc. These have a correlation to crime prevention as they allow better opportunities for learning, after school, child protection, family protections, etc. All of these impact our law enforcement costs.

3. Does the City need to reduce its debt? If so how?
Yes. The overall debt as projected will reduce from a peak in the next two fiscal year of $263MM to $247MM. This is through the normal amortization. As we review potential projects we should always be mindful of the sources of revenue that will repay the debt issue and keep that as tax impact neutral as possible. We also should apply excess cash flows to the
Star Bonds and TIF Bonds to accelerate the repayment as much as allowed. This will allow for the full revenue sources to come back to the city sooner, which will have a huge impact on the City’s revenue stream. 

4. What guidelines would you follow to determine how to spend the city’s 65% portion of the ½ cent sales tax that is dedicated to economic development and infrastructure?
Based on the language of the voter approved sales tax, the use for infrastructure needs to be tied to economic development. While economic development is somewhat undefined, it is generally tied to some form of job creation. This could be road improvements, sewer/water extension, possible airport improvements, etc. This will also have the impact of not utilizing property taxes to pay for the projects. We also should evaluate the types of businesses that have a good fit in the community and work to attract those businesses identified. Also identifying projects that are needed and evaluate their importance to economic development.

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