Facing difficult arithmetic, Fairway seeks citizen input on sizeable mill levy hike

Fairway city administrator Kate Gunja responds to a question from a resident at Thursday's public hearing on the 2011 budget.

The situation that Fairway finance committee chair Melanie Hepperly (Ward 1) laid out at a public hearing Thursday night was stark: amid flat home valuations and sharply declining sales tax revenues, the city is looking at a budget shortfall of $500,000 for 2011. And, unless the finance committee and community members can come up with some extremely creative cost-cutting measures, a substantial increase in the mill levy has got to be on the table.

According to figures Hepperly presented at the hearing, if the city had to use a property tax increase to fund the entire shortfall, the mill levy would likely rise from the current 12.853 mills to 19.985, a jump of 7.132. This would mean the annual city tax liability for the average Fairway homeowner would rise from $459 a year to $719.

Last month, the Prairie Village city council took the first steps toward increasing its property tax rate as well — but by just .69 mills, which would translate to an annual increase of $16 on the average homeowner’s tax bill.

Residents at the hearing gave members of the governing body feedback. Some were concerned that the city's debt obligations were responsible for part of the current financial crunch.

“I want to be very clear,” Hepperly told the audience. “Please do not leave here tonight and tell everyone that we are increasing the mill levy to that rate. That is not where we are at yet. But we need to present this information to you all so we can get input.”

Several of the two dozen residents who attended the forum commended the council for its work to make ends meet given stormy revenue projections. The city had $1,039,949 in sales tax revenue budgeted for 2010, but after a quarter of receipts, city staff now project just $870,753 coming into the coffers, a decrease of more than 16 percent.

One audience member asked the governing body whether they ought to consider putting a proposed increase in the mill levy to a vote, as the city did with the .5 percent sales tax hike to support infrastructure projects.

City administrator Kate Gunja pointed out that, given the August 25 deadline dictated by Kansas law for submitting a 2011 budget to the county, there simply wasn’t time to organized a ballot measure.

Moreover, Mayor Jerry Wiley said he wondered whether citizens would be engaged enough in the city’s budget challenges to make a ballot measure worthwhile. Wiley pointed to the low response rate to an online survey the city sent out seeking input on the budget situation.

“That’s one of the struggles I’ve had personally,” Wiley said. “When you go above and beyond the call of duty to engage the public, and then you only have 131 of 3,800 residents respond to a survey.”

(Results from that survey can be found on Fairway’s Web site here — scroll down to the “documents” section.)

The finance committee will be seeking additional input from residents at its meeting on Monday, July 12 at 6:00 p.m., prior to the full council meeting at 7:30. There will also be a public hearing on the issue on August 9 prior to the council’s vote to approve a final budget.