The city won’t be able to hire additional police officers next year.
City officials hoped to refinance the Walmart TIF and use the approximate $150,000 in added revenues in 2012 for three new police officers.
However, officials learned TIF refinancing funds can’t be used to bolster the general fund, and the police department will remain leaner than Chief Ken Francis would like next year.
City finance director Laura Gourley said Walmart and the city were ready to sign papers on a refinancing agreement.
Under the proposed refinancing, the city would’ve collected $150,000 per year from Walmart in sales tax for the next four years, and the length of the TIF would be extended.
“It was not Walmart’s fault. They were completely agreeable and they were very happy to do it,” Gourley said. “It’s just that you can’t refinance a TIF for our purposes.”
State law allows TIFs to be refinanced if the cash influx is used for improvements in the TIF district, but that wasn’t the city’s reason for seeking a change in the agreement between Walmart and the city.
“Our point was we needed cash to make things easier,” Gourley said. “We needed to smooth out the rough edges, and you can’t do that.”
When the store was built, Walmart paid for infrastructure like roads and sewer extensions related to the project. Typically the city pays for infrastructure upgrades related to new developments, so city officials are using what Gourley called“pay-as-you-go” TIF financing to repay Walmart for the infrastructure.
Under the original agreement, the store keeps sales tax proceeds that would go to the city — with the exception of the half-cent park and pool tax — and its property taxes as a way for the city to essentially pay the store back. The city is paying 6 percent interest on the principle.
Chief Francis requested additional officers in June, and council members anticipated using the TIF refinancing to fund new staff.
Francis told council members the city’s number of officers per 1,000 residents declined this year following the merger of the fire department. Nine cross-trained officers left the department to work for Johnson County Fire District No. 1 as part of the deal.
The departures left the city with 1.35 officers per 1,000 residents. The average is 1.8 to 2.2 officers.
Council member Chris Morrow would like to see the council find funds for at least one additional officer, but the 2012 budget must be submitted to the state for certification by Aug. 25.
“We had come to a consensus about the new officers, but they were overtaken by budget constrictions,” Morrow explained. “With the TIF money going away, there are some things we can’t do. Police is one of them.”
The city will continue to be a safe place to live even without even without additional officers, Francis said.
“I think it will probably result in some increased overtime usage, but I think our job is to keep the community safe whatever it takes,” Francis said.
Gourley said although the 2012 budget is $150,000 less than officials anticipated, it won’t create too much of a hardship since the additional police officers were taken out of the budget.
“We’re no worse off than we were before,” Gourley said. “Had we added the cops and then this happened, it would’ve been worse. For now, we’ll hold off on the cops.”
In the meantime, she said there are a few bright signs in the city’s fiscal picture. For the first six months of 2011, the city’s sales tax revenues are coming in far higher than anticipated. For example, right now the city has collected 4.4 percent more in sales taxes than they had in 2010. The city use tax — another sales tax — is 17 percent above where it was last year at this time.
But, Gourley said, it would be irresponsible to assume those figures will hold through the end of the year and budget accordingly.
“We’re not making budget changes on that information. It’s just something to note right now. At the end of the year, we’ll see what happens,” Gourley said.
TIF plan falls through, city unable to hire 3 new officers