Council discusses budget, faces $4M shortfall

The Olathe City Council’s budget retreats historically have allowed councilmembers to haggle over what programs or positions the city would add as a result of growth and rising sales and property tax revenue.

Saturday’s retreat presented different dilemmas.

With declining tax growth in the last year, City Manager Michael Wilkes said the city was adjusting to “the new normal” in the way it operates in current and future economic conditions. Councilmembers fought for what they could save while addressing 2009’s $4 million shortfall in the city’s operating fund.

The council disagreed with a proposal to eliminate the city’s sidewalk-replacement program, which would save $120,000 next year. Rick Biery, the city’s public works director, said that the city didn’t want to ask homeowners to fix their sidewalks, but that residents are responsible for sidewalk maintenance — including repairs — according to city ordinance.

“I would hate for this council to tell the community you’re responsible for sidewalks,” Mayor Mike Copeland said.

Councilmember Jim Randall agreed, saying sidewalk and curb repairs should remain the city’s responsibility.

“We’ll figure something out,” Wilkes said.

The city has begun to take measures to save money in anticipation of the shortfall. Those measures included eliminating vacant positions and reorganizing some departments, creating an annual savings of about $890,000.

Last week, the city eliminated 12 full-time and nine part-time positions. Next year, another 19.5 full-time-equivalent positions will be eliminated, but those positions are now vacant or will become vacant when employees retire. Other program cuts and department reorganizations are planned. Councilmembers were receptive to many of the solutions identified by city staff to address the shortfall, but they opposed some ideas.

City staff members separated “budget strategy alternatives” into four categories: service delivery adjustment, cost allocation, cost recovery and operational efficiencies. Simple measures taken in the operational-efficiencies category included extending the lives of city computers and police vehicles from three to four years. The cost-recovery category included adding or increasing city fees.

Councilmembers were most concerned with a program to bill insurance companies for time the Olathe Fire Department spent cleaning up traffic wrecks that would generate $150,000. Councilmember John Bacon was concerned insurance companies would raise rates to offset costs to cities. Purchasing parking booths to encourage downtown parking violators to pay outstanding fines was well-received by councilmembers.

Despite raising or adding some fees, Biery said Olathe still ranked at the lower end of its peer cities.

The cost-allocation category entails moving the costs of some programs to other funds or sources of revenue. For instance, five positions within the city will be paid by federally approved programs next year, but they will be evaluated annually because the salaries are paid for by federal money.

The last category, service delivery adjustment, involve the elimination or reduction of programs and the 19.5 full-time positions that will eliminated through attrition. Those include eight positions that paid more than $80,000 annually and four positions that paid more than $100,000.

The next budget workshop, which will address utility-fee increases and the capital improvements program, will be July 8. Residents will be able to formally comment on the budget Aug. 5.

Residents who want to weigh in on the budget before that can send comments to budgetcomments@olatheks.org.

The budget must be submitted to the county by Aug. 25. The council will approve it Aug. 19