Pittsburg City Commissioners will soon take up the issue of whether a half-cent sales tax should go before city voters this fall to pay for police staff and fire equipment.
Pittsburg City Manager Daron Hall passed along the recommendation from a 20-member committee that decided the half-cent sales tax would be the best option to deal with the shortages in officers and the outdated fire equipment. The sales tax would generate roughly $1.2 million a year and would sunset after 10 years.
Last month, Pittsburg Police Chief Mendy Hulvey presented before the Pittsburg City Commission that her department is understaffed.
According to her presentation, the PPD spent 37 percent of all shifts at the minimum of one supervisor, three on-duty officers, and one dispatcher available. Hulvey said the PPD is eight officers under the national average for a town of this size.
Pittsburg City Commissioners told City Manager Daron Hall to put together some financing options to address the issue. Hall put together a 20-person committee — “a cross-section of the community” — earlier this month to first hear the problems facing the city, then to offer a course of action.
“As far as the state crime index, we’re in the top four every year,” Hall said, recounting Hulvey’s words to first the commissioners and then the committee. “That stands out the most. The [state] Attorney General said that 80 percent of the meth labs are in Southeast Kansas. That’s a big number, and it’s not going away.”
In addition to Hulvey, Pittsburg Fire Chief Mike Simons spoke about the 23-year-old frontline pumper, and the reserves for that pumper that are 27 and 29 years old. Further, bunker gear and SCBA (breathing devices) are getting closer to a needed replacement, and Simons would prefer to place them on a more affordable rotation, so new gear is replenished every year.
This all adds up to about $1.2 million in costs needed in the coming years, and the city’s budget is only $30 million (about half of which is utility funds, he said). Hall told commissioners that property tax receipts are declining, and property valuation has declined or been stagnant for several years. Sales tax growth has been steady, but minimal at about 2 percent a year.
“If we’re not growing, it’s hard to keep up with services,” Hall said. “We’re using reserves to maintain basic services. In the end, we have to provide services. Of those, police and fire, water and taking sewer water away are the biggest four.”
Hall also described that unfunded mandates, often a bugaboo of municipalities, have a direct impact, including a state-mandated $150,000 hit to fund retirement accounts in 2014. Further, two police officer positions funded by grant programs will soon see those grant programs run out next year.
Page 2 of 4 - Proposal
Hall said that this all adds up to $1,000,050 for police positions and $200,000 for fire equipment each year.
“That’s $1.2 million out of the general fund. I don’t have that calculator button. It can’t be done,” Hall said.
Hall said the 20-person committee looked at four options for the problem: property tax increase, sales tax increase, reallocation of existing resources or doing nothing. Some of the committee members said that doing nothing was not an option.
Hall said that if he could find $1.2 million out of the general fund, he would, but it was not available.
“On the general fund side, there are no bodies there. There’s the small finance team and the city manager. There’s IT. Most people in there are police and fire. It’s good to think about reserves, and they’re there for emergencies, like major recessions. But when they’re over, you want to turn it around,” Hall said.
The remaining options were not any more appealing. A one-mill property tax increase would raise about $117,000, Hall said. Although the city’s mill rate hasn’t been raised of any note in several years, Hall said that a 10.6-mill increase in one year was not something that anyone would be excited about.
“[The committee] decided the best solution to consider was a sales tax increase. They didn’t feel a property tax was a reasonable solution.”
The proposal would be to put the issue of a half-cent sales tax for 10 years up for a vote in the fall. For a purchase of $100, this would mean a tax increase of 50 cents. Commissioners will consider the formal proposal likely at the next meeting on July 9.
However, city staff noted that residents and visitors might not feel the pain of the entire half-cent. The state sales tax is scheduled to drop 0.15 percent in July, meaning the total sales tax would only be 0.35 percent higher than now. Further, the half-cent sales tax that funded the construction of the Law Enforcement Center and the fire station on West Fourth Street will come off the books a year early in 2017, dropping the total sales tax to 0.15 percent less than it is now for the remaining seven years of the proposal.
“This is a critical need impacting our community. We need to have the conversation. We had a lot of input. Now it’s down to this,” Hall said. “...You hired me to come here not to pull any punches. I believe we’re going to be a great city. I believe we are a great city. It’s time to look at this problem. It’s up to the five of you to determine the course.”
Commissioners took up the issue immediately. First up was Patrick O’Bryan, who is the longest-serving commissioner.
Page 3 of 4 - “As long as I have sat on this commission, it has been one of our big agendas,” O’Bryan said. “It isn’t something that just came up. We’ve talked about the lack of police and fire protection for a long time...I don’t like taxes any more than anyone else. But as a retailer, if I have one person say something about how high the sales tax is in a month, that’s a high month. It’s more palatable. That’s a big reason I’m in favor of this. Fifty cents on a $100 purchase is pretty nominal. A lot of people are coming to Pittsburg to shop. Not only using merchants, they’re using our streets, the water system, facilities, and the use of our police and fire protection.”
Commissioner John Ketterman asked if the sales tax would sunset, and was told that it would sunset by statute in 10 years.
Other commissioners took up the issue, like Chuck Munsell.
“We have an obligation as a city commission to provide protection to the city of Pittsburg. Nobody likes to raise the sales tax, but it’s logical. It’s for police and fire protection,” Munsell said. “To not have the equipment to do the job is unacceptable. We need to get back with the staff and equipment they need. Sales tax would be a way for everybody who pays for the services.”
Mayor Michael Gray was a bit more cautious, saying that he has always been a big supporter of police and fire. He said that nobody — commission or members of the public — who has heard the issues would deny the need.
“But one of the things I said when I campaigned is that I’m not a huge supporter of taxes. Patrick says no one is, and that’s true. But I said that in order to confirm a tax increase, I had to be able to confirm we were using all our money efficiently,” Gray said. “I understand there is no way we can fund $1.2 million by cutting back on staples. I understand that’s not the only way we can come up with the funds.”
Gray suggested that Hall and city staff take a look at working with the county on potentially sharing in the cost of equipment, or at least to see if that was a viable option.
“I said I’d only [raise taxes] if I knew that we were spending efficiently. We’re improving every day. But it has to be part of the discussion at the same time. I don’t want to go to the citizens for $1.2 million if there’s something we can do to be more efficient,” Gray said.
Commissioner Monica Murnan, who was participating in the meeting by conference call, said that she understood, but that could not wait any longer.
Page 4 of 4 - “We’ve done a pretty good job knowing where the money is going through the budget process,” Murnan said. “I’m a lot more comfortable now than I did five or six months ago. But I think we can do both simultaneously.”
Commissioners did not take any action Tuesday, but gave Hall the go-ahead to produce a resolution to put the issue in front of Pittsburg voters, likely in September.
One commissioner asked about possible next steps if the voters decided against the plan.
“We’ve been voted down once, the building you’re sitting in. But we brought it back again and presented it better and it passed. That’s one option,” O’Bryan said. “The five of us up here could impose this sales tax without a vote. I’d just as soon not do that. I’d much rather put it to a vote.”