Revenue shortfall leads to CIP rescheduling in De Soto’s 2009 budget
A late curve ball from the Johnson County Appraiser's Office meant the city of De Soto will likely see a slight mill levy increase when the 2009 budget is adopted next month.
City Administrator Pat Guilfoyle said he was preparing the $8.8 million proposed budget he shared with the De Soto City Council last week on the assumption the city's overall assessment would increase by 1 to 2 percent, as the appraiser's office had reported earlier. However, Guilfoyle learned the assessment actually fell by 1 percent when the appraiser updated numbers in July.
The news will mean a slight mill levy increase. That part of the city served by the De Soto Fire Department would increase from 27.177 mills to 27.276 and from 17.044 to 17.11 is sections of De Soto with Johnson County Rural Fire District No. 3. The mill levy increase would equal $1.10 for each $100,000 of a home's appraised valuation in the city fire service area and a 77 cents in the rural fire district.
There were other challenges in preparing the budget in the current economic environment, Guilfoyle said. Those included spiraling fuel prices, the housing downturn that contributed to the fall in assessment and contributed to continued slide in development fees and sales tax.
Also of consequence was a mistake in the collection of use tax of a major Johnson County corporation. The money collected will have to be refunded to another state at the cost of more than $9 million to the state, $6.3 million to Johnson County and cost De Soto $14,000 in 2008 and $31,000 in 2009.
But Guilfoyle said the city's financial health was solid overall. He estimated the 2008 general fund will $226,442 under budget.
One positive note was the cost of the city's law enforcement contract with the Johnson County Sheriff's Office. Guilfoyle said he feared it might increase substantially because of the increase in fuel prices, but sheriff's office representatives said it would only increase 1.8 percent for 2009 to $446,542 because of a reduction in criminal activity the first six months of this year.
"Because of the good citizens of De Soto, our crime rate is down," he said. "That is one of the things the sheriff's office looks at when preparing a contract. If the crime rate had been the same as last year, we would be looking at a 8.6 percent increase."
Poor economic conditions were reflected in the budget, particularly the five-year capital improvement plan that relies heavily on development fees.
The council approved reforms to the five-year CIP process last year with the promise not to raise the mill levy to pay for new projects on the list. The process only commits the council to fund the next year's projects - or 2009 projects in the 2009 budget.
The process was designed to give the council flexibility in prioritizing projects and responding to conditions, such as the current economic downturn.
With the decline in development fees, Guilfoyle recommended one project scheduled for 2009 - the $348,000 sidewalk and landscape improvements for downtown - to be postponed.
Planning for the project, which was part of the 2008 CIP budget, will go forward. Last month, the city rewarded a contract with the Omaha, Neb., firm of Marty Shukert, who developed the city's downtown revitalization concept plan, to create the downtown landscape and sidewalk plan.
The city will still make a major commitment to 83rd Street in 2009. The street will be rebuilt from Kill Creek Road to the east city limits for an estimated $821,000. Johnson County's County Assisted Road Network fund is to pay for $417,000 to that project.
The 2009 budget also includes $150,000 of street repaving for elsewhere in the city.
Removed from the 2009 CIP project list were further improvements to City Hall and the Community Center and replacement of the deck on the bridge on 83rd Street that crosses the Sunflower railroad tracks.
The public hearing on the budget will be at the De Soto City Council meeting at 7 p.m. Aug. 7 at City Hall. The budget will be published in The Explorer July 24 and 31.