The Mission City Council will return to work on its 2016 budget tonight facing a couple of major challenges: how to fund a shortfall in the stormwater fund and what to do about street funds in the wake of a Kansas Court of Appeals ruling that wipes out a big chunk of revenue coming from the Transportation Utility Fee (TUF).
The stormwater fund will require an infusion from the general fund this year and shows a deficit of more than $500,000 in 2016. That deficit could be wiped out if the developers of the stalled Gateway project pay a $600,000 annual assessment to the city. The council approved that charge this year as part of a 20-year plan to be reimbursed for $12 million in stormwater work to make the Gateway property suitable for development.
The Gateway developer also owes the city somewhat less than $300,000 in old charges from its development agreement that is still in effect. Those charges, dating to 2013, stem from the developer’s agreement to pay the city’s expenses for bond counsel and financial analysis among other charges. Cameron Group stopped paying on its outstanding debt several months ago, City Administrator Laura Smith told the council. Payment of the past due amount from those charges would also pay a large portion of this year’s shortfall.
Smith cautioned it is easy to make developer Tom Valenti and the Gateway project “the scapegoat,” but a combination of issues led to the shortfall. Among those is declining general fund revenues that have not kept up with inflation over recent years. The stormwater payment plan had counted on a general fund transfer that disappeared as revenues declined.
Councilor Debbie Kring said that the city should not be willing to talk about any new plans for the Gateway until the current obligation is paid. Kring later said she had been advised that the development agreement implies an interest penalty can be assessed on unpaid balances. The annual $600,000 assessment will be added to the property tax bill, but there is no assurance when the city will receive the money.
In a detailed budget report to the council, Smith listed the Gateway charges, sale of the Neff printing property and increasing self-sufficiency of the Sylvester Powell Community Center as potential positive future impacts on the budget.
Increasing stormwater fees, increasing the mill levy or adding a quarter-cent sales tax for stormwater are among options for closing the gap with certainty.
On the street maintenance side, the city already was looking at a potential shortfall in its ability to fund major projects in coming years, but the loss of approximately $800,000 in TUF money leaves it in a more precarious position for 2016. The street capital projects are funded by the TUF, a quarter-cent sales tax ($550,000 per year) and gas tax ($245,000 per year).
The city could appeal last week’s ruling to the Kansas Supreme Court. It has an executive session scheduled for tonight as well to discuss current litigation.