Streetcar funding tops list of city budget concerns

Northeast News
February 27, 2013

Streetcar funding topped the list of concerns for Kansas City residents during the city’s Feb. 6 budget hearing.

A number of Kansas City residents said they disagree with the city using monies from the Public Mass Transportation Fund to help fund streetcar operations.

Originally, the city said streetcar operations would be fully funded through property and parking assessments for properties located within the Transportation Development District (TDD) and through a one-cent sales tax on taxable sales within the TDD, said Ron McLinden, co-founder of the grassroots advocacy group Transit Action Network.

“Now just two months after the votes were counted (to establish the TDD), we’re seeing that your budget proposes to take $2 million away from the bus system for operation of the streetcar,” McLinden said. “That’s a real concern. It calls into question the credibility of the city council.”

Transferring monies out of the Public Mass Transportation Fund to fund the streetcar would deplete the Kansas City Area Transportation Authority’s (ATA) reserve fund over time and eventually begin to reduce bus routes, he said.

“We don’t want to see the streetcar system nibble away at the bus system,” he said.

Not everyone can afford a car or car insurance, said Jonathan Walker, president/business agent of Local 1287 Amalgamated Transit Union. For that population, public transportation is crucial for traveling to and from work, he said. Public transportation allows people not only to work, but to support the local economy and contribute to the city’s Earnings Tax revenue. Instead of looking at public transportation as a liability, the city should view it as an investment that increases the city’s coffers, Walker said.

“I don’t want to see a fight between downtown projects and the busses,” one resident said. “I am dependent, period, on the busses. I don’t have a driver’s license. I can’t have a driver’s license (due to medical reasons).”

The resident urged the city to continue adequately funding the ATA, so services won’t be cut.

“Nothing in this budget would reduce a single trip of transit service this year,” said City Council member Dick Davis.

The “biggest problem” with the ATA is that the city is paying 90 percent of operation costs and that a regional tax to fund ATA services has not been passed, Davis said.

“Why is Kansas City, Mo., the only city in the metro area with a major transit funding commitment?” Davis said.

City Council member Russ Johnson said even if the city increased the tax revenue dedicated to ATA, the service would still be unsustainable in the long-term.

“Change in the ATA operations, regardless of how much we give it, is inevitable,” Johnson said. “The bill will eventually come due… The long-term view is important because the only way to solve these problems in the long view is to create jobs and have people paying taxes.”

Kansas City needs “to bring smart people into town” who know how to create jobs, he said. That’s one of the reasons Kansas City is pursuing a streetcar system, Johnson said. A streetcar will spur economic development and create wealth, he said.

In terms of funding ATA and other needed city services, Johnson said, “If your house is too big, either you’ve got to get a better job or a smaller house.”

City Council member Melba Curls said state funding for ATA services continues to dwindle.

“I don’t know if the state gives ATA much of anything anymore,” Curls said. “It’s a challenge, but we’re with you and we’ll all try to help (sustain ATA service).”

City Council member Ed Ford added that the council should continue discussing how to finance the city’s $2 million contribution to the streetcar.

“The streetcar is a game changer, but we need to discuss out of what funds we pay for this $2 million,” Ford said. “Personally, I don’t think most of it should come out of the transit tax.”

Budget Breakdown

Kansas City’s proposed $1.38 billion budget marks a 5.1 percent increase, or $67,302,980, over last year’s budget. In his budget letter submitted to the mayor, City Manager Troy Schulte said the increase is a result of several factors. Those factors include a gross sales tax increase of $39.7 million, which includes a ½ cent parks sales tax; gross use tax increase of $9.2 million; and gross earnings tax increase of $8.8 million.

Wages and benefits for city employees is increasing by $25.4 million, or a 6.3 percent increase. To accommodate the wage increases, several steps are being taken and include eliminating 116 vacant positions from non-public safety departments; the police department holding enough vacant civilian positions to save $3.2 million in salaries or the department may choose to permanently eliminate positions; and the fire department eliminating 9 vacant positions and reducing overtime. In addition, to create greater efficiency and generate approximately $3 million in savings, several departments will be consolidated. Schulte recommends “right-sizing” in the following departments: Police Department ($2 million); General Services ($650,000); Public Works ($200,000); and City Manager ($200,000). Also, $1 million in salaries and benefits will be eliminated from the Public Works Department by natural position turnover.

Public Safety: Public safety comprises 69 percent of the General Fund and “continues to encroach on other city services,” Schulte wrote in his budget letter. The highest funded department is the police department, which makes up 46 percent of the General Fund. Wages and benefits account for 90 percent of the police department’s General Fund budget.

Street Maintenance: Thanks to Kansas City voters approving a ½ cent sales tax last August,  the city expanded its street maintenance fund and will add an additional $14.2 million for street preservation and an additional $4.7 million for street maintenance. Overall, street resurfacing and preservation will receive $19.4 million and street maintenance operations will receive $14.1 million. Last year’s street resurfacing budget was at a record low and was enough to repave a city street once every 200 years, Johnson said. Now, funding will allow Kansas City to repave streets once every 30 to 40 years, he said.

Parks and Recreation: The Parks and Recreation Department will also benefit from the newly established ½ cent sales tax and will receive a $10 million increase. This additional funding will allow the department to add approximately 20 positions, expand hours at community centers, offer improved park maintenance and increased tree trimming, planting and tending of flower beds. Funding will be restored for two positions within the athletics program and summer youth activities will receive an additional $200,000. More than 20,000 city street trees and several thousand private trees are susceptible to the Emerald Ash Bore disease, and to address this issue, the city will utilize $1.5 million to manage the disease.

Kansas City Land Bank: Established in September of 2012, the Kansas City Land Bank aims to place abandoned, vacant and foreclosed properties back on the tax rolls. To date, approximately 4,500 Jackson County Land Trust properties have been transferred to the Kansas City Land Bank. The land bank will be responsible for the properties, selling and transferring the tax delinquent properties to return them to productive use. A total of $2.4 million is budgeted for the land bank and will be used to demolish, clean, mow and weed eat properties.

Mayor and city manager remarks

Although the proposed budget calls for a 5.1 percent increased compared to last year’s budget, it doesn’t mean the city is better off, Kansas City Mayor Sly James said.

Personnel costs, like health insurance, salaries and pension, absorbed that increase “right off the bat,” James said.

“Now, we’re in a worse situation than before the increase,” James said.

According to Schulte, the proposed budget is “structurally unbalanced.”

Expenditures in the government activities category, which includes public safety, health and medical care, public works, among others, will outpace projected revenues. It’s been a regular trend for at least 10 years, Schulte said.

“The submitted budget for FY 2013-14 fails to provide funding to fully address long-term liabilities (e.g. pension, other post-employment benefits, etc.) and critical equipment replacement and facility maintenance needs of the non-public safety operations of the city,” Schulte wrote.

Despite the challenges, James said Kansas City is in “substantially better shape” than 80 percent of cities across the U.S. Unlike other cities, Kansas City hasn’t laid off employees or resorted to a defined contribution plan for pensions, he said.

“This city functions better than so many other cities, and we shouldn’t forget that,” James said. “While we all have things we can tweak, let’s remember how good we’ve got it. Compared to other places, we’re kicking tail.”




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