Facing essentially flat revenues, the city of Blue Springs is preparing to trim services and personnel. Among the cuts is the loss of the city’s recycling center this fall.
The city also has set aside one-time funds to renovate City Hall to streamline a customer-service process that officials say has become cumbersome. The city plans a town-hall meeting – in person and on Facebook – later this month to discuss the issues.
The city, like others, is coping with the erosion of a revenue base centered on sales taxes as well as local revenue losses imposed by the state.
“My sales tax is basically flat,” City Administrator Eric Johnson said.
Overall, the proposed 2017-18 budget and capital improvements plan is $68.3 million, up 3.53 percent from this year. It takes effect Oct. 1. City employees are budgeted for 2 percent raises in April 2018.
The City Council is to discuss the budget next Thursday, and a public hearing on the budget is set for 6 p.m. Sept. 6 at the Howard L. Brown Public Safety Building, 1100 S.W. Smith St.
A town hall meeting is scheduled for 6 to 7 p.m., Aug. 22, at Cordill-Mason Elementary School, 4001 Christiansen Road. It will also be on Facebook Live.
The two biggest cuts immediately visible to the public are likely those in recycling and bus service.
The recycling center at Pink Hill Park is set to close Oct. 1.
Like Independence, Lee’s Summit and other cities, which also have closed their recycling centers over the last year or so, Blue Springs faces sharply higher costs as government subsidies have gone away, the prices of recycled commodities have dropped and the price for a contractor to take material away has jumped.
“That facility at Pink Hill is heavily used,” Johnson said, but the city says the cost of running it has averaged $12,000 for the last few years and was set to jump to $100,000 in fiscal year 2017-18.
The city points out that several trash haulers in the city – AAA Disposal, WCA, Republic Services, Gravatt Waste Solutions – offer now offer curbside recycling.
The city is cutting its $125,000 in support for bus service to $50,000. The Kansas City Area Transportation Authority currently runs four commuter buses each morning to downtown Kansas City and four back in the afternoon and evening. Those will be reduced to three.
“But the service will still operate,” Johnson said, adding that gas prices are low at the moment and the buses have been running far less than full.
The city also is trimming staff, including the deputy city administrator and a communications specialist, both in the city administrator’s office.
Johnson said those were hard decisions but cuts are needed, “and I feel like I need to lead by example.” The people in those positions will stay through the end of December.
Altogether, the city proposes cutting the equivalent of 3.65 full-time employees, leaving 318.64 FTEs. Just fewer than half of those employees are in public safety. Overall, public safety accounts for 22.3 percent of city spending.
Local governments everywhere are struggling with flat or falling revenues from sales taxes from brick-and-mortar retailers as consumers buy more things online.
Most online retailers do not collect sales taxes. From Amazon.com alone, Johnson said, Blue Springs is losing out on $300,000 in taxes a year, and the overall figure is about $450,000.
Cities can ask their voters for what’s called a use tax, in effect an online sales tax. Johnson said the Amazon-only losses are $1.2 million a year for Independence and $700,000 a year for Lee’s Summit. The three cities will likely ask voters – at the same time with a coordinated campaign – to adopt a use tax.
“It’s not if we take this to the voters, it’s when,” Johnson said. Local officials in many places for years also have argued that this is an issue of fairness, that local businesses are at a major disadvantage in collecting a tax that their online competitors do not.
Other factors hitting Blue Springs income:
• Franchise fees to the city from Kansas City Power & Light (mild summer), Missouri Gas Energy (mild winter) and telecoms are down.
• Recently passed state laws that cut local government revenues from such things as traffic tickets and code violations.
“That has had an impact,” Johnson said.
In what Johnson calls fixed costs, the city is looking at $21.07 million in 2017-18 for employee salaries and insurance – up $440,705 from this year. But general fund revenues are up just $153,129, or 0.59 percent.
The city has been making cuts over time. It had a license bureau at City Hall but year by year was getting less from the state and ended up subsidizing the service. So it cut that office. It was the same with taking payments for Jackson County taxes.
Also, last year the city pulled the Economic Development Corp. back into city government and instead of providing it with $335,000 a year is running it for roughly $100,000 less.
Johnson said that when the new public safety building opened last year after a long construction period, the City Council decided it was time to address the City Hall building on Main Street. The building went up in 1961 and was last renovated in 1989.
Currently, people who come in for such things as a business license or a special-event permit are routed from City Hall to the annex just to the north and, in some cases, also to a third building. The lot slopes, accessibility is an issue, and getting around can be a little confusing. Staff hands out a diagram to direct people to the Businesses Services Division.
New construction will connect the current City Hall and the annex, and the front door will be swung around to that new space, facing west into the parking lot. The idea is to put all services in one place.
“We’re going to transform the customer experience,” Johnson said.
Also, the city needs to add an elevator, among other things, to comply with federal accessibility rules.
The city has $6.1 million in one-time money that’s been set aside over the last two years.
“It’s one-time revenues,” Johnson said. “It’s revenue that can’t support operations.”
The contractor is being asked to deliver the work “at risk,” that is, a set price at the beginning without added costs as the project moves along. That locks in the $6.1 million cost.
“We’re going to make an investment in our downtown corridor,” Johnson said. “The council is fully on board with this.”
Work could start in January, and city staff will be in the city’s property at the old lumberyard on the other end of downtown during the nine months of construction.
The renovated building would be expected to last for another 30 years.
“It’s a pretty good return on your money,” Johnson said.
The city does have one major new revenue stream, the sales tax for parks that voters approved in April. That money is set aside solely for park improvements, not operations.
“It’s all deferred maintenance,” Johnson said.
The tax is expected to bring in $15 million over the five years for which voters approved it, and that’s only enough to address 40 percent of many years of deferred maintenance, the city says.