Mission weighs options, including sales tax, to confront future street project needs

Construction crews are making progress on installing new parking areas along Johnson Drive.
Johnson Drive was the last major street reconstruction in Mission.

Mission replaced the loss of nearly $800,000 per year from its Transportation Utility Fee (TUF) with a property tax increase that raises approximately $833,000 per year for streets. But that switch won’t cover all of the city’s street program needs running into the future.

One option that may be on the table is to add another dedicated sales to the existing quarter-cent the city already charges for street maintenance. Even with that additional revenue, city projections show that it does not generate enough money to cover regular maintenance, debt service from the Johnson Drive and Martway projects and new capital projects. The capital projects include full depth reconstruction of some deteriorating streets and a major project on Foxridge. The city does have the cash flow to cover the annual maintenance and debt service costs.

The fate of the TUF is now in the hands of the Kansas Supreme Court which will hear the city’s appeal of a Kansas Court of Appeals ruling that declared the TUF illegal. If the court rules in Mission’s favor, the TUF could be used again. The city dropped the TUF assessment for the 2016 budget and raised the mill rate. If the city loses the appeal, the fate of the approximately $4 million collected over its lifespan – whether any or all must be repaid – is likely to be back in court.

“It’s not intended to be depressing, but we wanted (you) to start thinking about it,” City Administrator Laura Smith told the council Wednesday in reference to the cost and revenue projections. The options, she said, are to raise revenue, delay projects or use debt financing.

The city’s sales tax is 1.625 percent, which brings the total charge in Mission to 9.35 percent after state and county sales taxes are added in. That runs to 10.35 percent in special CID areas. Complicating a Mission attempt to add another street sales tax is the possibility of the county adding another quarter-cent to its sales tax rate to pay for a new county courthouse.

“We are sales-taxing ourselves right out of the state,” Councilor Debbie Kring said during the discussion. A new quarter-cent in Mission and a quarter-cent from the county (for a new total of 1.475 percent for the county), added to the 6.5 percent charged by the state, could bring Mission to 9.85 percent outside of CID projects.

Smith said city staff will bring the council some financing options for streets to consider at a future discussion.