ROBERT PIERCE
• Leader & Times
After letters were sent out to many Seward County taxpayers stating this year’s county budget could contain a mill levy increase of as much as 20 mills, county officials have received some criticism regarding that possibility.
Administrator April Warden explained that mill levy was based on a worst case scenario, as intent to exceed the Revenue Neutral Rate had to be given to Seward County Clerk Stacia Long by mid-July, which was the time commissioners hosted the annual budget work session to hear from department heads and outside entities regarding their budgets.
Following the budget work session, commissioners were able to trim spending to a level which would only require an increase of 7.985 mills over the RNR for Fiscal Year 2025, equating in actual dollars to $2,128,904.81.
Warden said Long needed to be notified of the intent to exceed the RNR by July 16, and with that notification, a number was also required to know by how many mills the county intended to exceed the rate.
“At that time, the budget proposal submitted by departments and outside entities would have increased our mill levy by 22 to 24 mills,” Warden said. “Therefore, we notified the county clerk it was a possibility our mill levy would increase by 20 mills.”
Warden said at the time Long was notified, this was the worst case scenario.
“We still needed the whole budget work sessions to work through the submitted information,” Warden said.
However, commissioners were able to cut the mill increase back to less than eight mills. Warden, though, said because leaders did not have enough time to research what money was needed for the upcoming fiscal year before Long had to be notified of the intent to exceed the RNR, the worst case scenario was given on the notice, but she emphasized just because the initial number is given at time of notification, this does not mean that will be the final number, adding the county does not intend to exceed the RNR by the initial rate.
Warden said the process leading up to the work session starts long before July.
“In the May/June timeframe, department heads and outside entities begin to prepare their budget request they will present to the Board of County Commissioners during the budget work sessions that are always in July,” she said. “Each department head and entity receives a budget preparation memo from myself, the county administrator, along with a budget worksheet and a capital expenditure form.”
Warden said the memo provides direction for department heads and outside entities to complete their budget proposal.
“A deadline is then given to those department heads and to the entities so the county administrator, myself, the financial consultant, which is Hay Rice & Associates, and the Board of County Commissioners can review that proposal and have time to be able to research and ask questions if there’s additional information that needs to be had,” she said.
All of this, Warden said, is completed before the work session, where department heads and entities are given 15 to 20 minutes to present their budget requests.
“They’ve already reviewed that budget, asked for additional information or done research or questioned stuff,” she said. “They’re going over that final proposal with them.”
Warden said budget work sheets allow commissioners to see exactly what was spent in the prior year.
“When we’re preparing the 2025 budget, they will look at what was actually spent in 2023, what the budget was, the budget allocation for 2024,” she said. “Then there’s a column where they tell them what they feel they’re going to spend or estimate in 2024 and what they’re requesting in 2025.”
Warden said department heads and outside entities are asked to itemize the money spent by line item to provide the best overall picture for commissioners.
“The worksheet also includes resources the department or entity receives as well – public support, which means taxes that are levied to support that budget, reimbursements, any carryover they’ve had from the previous years and total resources received for that department,” she said.
Warden said capital approvement worksheets allow commissioners to see a five-year picture of what is needed in a department or entity.
“It is requested either out of the county building fund if it’s for a county building or the equipment reserve funds if it’s for equipment,” she said. “It is itemized by department – the item, the amount it’s going to cost, if it’s replacing something or if it’s something new and the year it is being budgeted for over a five-year period. They also put the urgency of it. Is it high, is it moderate, or is it a low need we have?”
Warden said there is also a timeline or budget calendar county governments must follow to meet deadlines, and this includes items such as a notice to exceed the Revenue Neutral Rate, budget preparation reviews, public hearings, adoption of budgets and certification to the county clerk.
“Each year, budget preparations always brings with it some type of challenge,” she said. “You’re always going to have challenges with budgeting, but cooperative behavior and respect for one another helps us face those challenges and pull through them.”
Warden said this is what county officials are working through at this time as people have been hearing about the possible budget increase and are receiving notices about the intent to exceed the Revenue Neutral Rate.
Warden too explained the budget conveys organizational direction, priorities and commitments of community resources.
“We are having to evaluate our current services, recognize the needs the citizens are identifying and balancing those needs against the tax and revenue burdens that are required to be able to finance those,” she said. “The budget guides and plans what the Board of County Commissioners are asked to accomplish, along with the human capital and financial means to do so.”
With circumstances seemingly in constant change, Warden said a shift in priorities can likewise be seen, and this also can change along with leadership.
“We’re going through an election process, so that priority can shift,” she said. “There are changes in the financial environment, and there’s always unforeseen events.”
Warden said preparation of an annual budget is one of the most important processes county commissioners do.
“The commissioners have been hosting strategic planning sessions and quarterly town hall meetings,” she said. “They’ve been very pleased with the turnout at the town hall meetings. They are listening to what the constituents are saying about their expectations and the needs they have as far as county services.”
In an effort to sustain operations, Warden said commissioners are rethinking the way the county budgets.
“They’re looking at the county operations as a whole,” she said. “They’re evaluating what we do, why we’re doing it and how we’re doing it, what is the best way to provide outcomes people desire. We are trying to do that through a more formal feedback process.”
At the most recent strategic planning session, Warden said commissioners discussed the possibility of developing a budget team for the county.
“They are setting measures,” she said. “They are going to monitor the process and evaluate results from the vision, direction and goals they’ve set at their strategic planning sessions.”
From town hall meetings, Warden said commissioners have heard loud and clear from constituents about the need to improve the quality of life in the county.
“Roads and our transportation system have been a big one – safer communities, taking care of the deferred maintenance and the facilities we already have, having a plan for economic development,” she said.
Warden said there is currently a gap created between the services local residents need and the available resources they want.
“What are they willing to pay for that, or what does it take from a budget to be able to provide that?” she said.
Warden said commissioners currently meet with department heads on a quarterly basis to make adjustments, identify and explain variances in budgets and communicate with the general public. She did say, however, those meetings could be switched to a monthly basis.
“Another option is some counties have a finance department within administration or an assistant county administrator who serves as a finance officer as part of their duties in that position,” she said. “While this would be an additional position and a cost, it is another consideration they’re looking at.”
Some people compared the items department heads and entities request in the budget work session to a wish list, but Warden said the county has amazing staff, many of whom are experts in the areas they oversee.
“They are the ones working in their departments day in and day out, boots on the ground, and they know what the needs are in their departments to provide the services, have the facilities, the staff, the equipment, etc. to get the job done,” she said.
Without this expertise, Warden said county leaders would not have a clear understanding of the needs of local residents.
“There are cuts made every year, and at this point, there’s not a whole lot of cushion to remove much more out of their budgets,” she said. “They have been responsible, and they have done what’s been asked of them. It’s not really a wish list. It’s the cost of doing business, and while there are things that can be cut and were cut from what they identified the need is, we try to determine what they can do without, and they live with that, and they live within that. There are consequences if they go over budget.”
In the past, county budget work sessions have normally taken two days to complete, but this year’s session was extended to three days, as Warden said many more challenges were faced for Fiscal Year 2025.
“There was much more consideration, research and further action to propose a budget structure that met the needs that mattered most to the public, met our mandatory obligations,” she said.
Warden too said it is important to not let cash balances erode and let the county’s debt to cash ratio rise and its fiscal strength decrease.
“We have to considered unfunded mandates, inflation, return on our investments, fee structures, insurance premiums, infrastructure, equipment and other capital expenditures,” she said.
Warden said there is much more to a budget than filling out forms to comply with state laws determining property tax levels.
“It is a huge process, and this year, we needed more than those two days we can normally get it done in,” she said.
Kansas lawmakers created the Revenue Neutral Rate in 2021, and the rate is simply a mill levy rate that generates the same amount of property tax revenue as the previous year. This, Warden said, is done through total assessed valuation.
Since 2006, Warden said county valuation has remained stagnant, adding the county has budgeted by mill levy for years and not by need.
“You’ve not raised the mill levy according to the need for years and you’ve squeezed the budgets to the bare minimums over the years, you have aging equipment and infrastructure,” she said. “You have the inflationary challenges each household is facing, but we’re facing it on a much larger scale.”
Warden said this means there comes a time when leaders are left with no choice but to look at an increase to the mill levy.
“No one set out with the intention of wanting to raise the mill levy,” she said. “No one wants to see an increase in taxes, but there is a cost of doing business and providing services that keep our county going, and that’s what we’re faced with this year.”
Warden said the proposed increase to this year’s mill levy was simply done because the county could not provide its essential services with the same amount of property tax dollars it did in FY 2024.
“We are facing significant challenges with our roads,” she said. “We did have an increase in our insurance policy I believe all individuals have faced. There’s an increase in fuel and parts, the cost of labor if our mechanics cannot repair it and if it has to go out to the manufacturer. Pretty much all of our commodities have increased. Our utilities have increased, and we still have the outstanding ethanol tax appeal that’s hanging over this. We have to put money aside for that settlement. We’re just estimating at this point, but we have to set that aside.”
Warden said how much the proposed increase would affect each property owner is hard to determine because each property’s valuation is different.
“Property valuations are a reflection of property sales in the local real estate market and/or changes made to an individual property,” she said. “When property value increases, it does not necessarily mean there’s more property taxes that will be assessed. In essence, the valuation of property determines each owner’s slice of the pie, but not the size of the pie.”
Warden said property taxes are determined by all taxing entities such as local cities and counties, as well as school districts, colleges, libraries, townships and fire districts.
“It’s very hard for me to be able to give you what it’s going to be,” she said. “I can tell you when this notice went out as an example, the property owner’s current year appraised value was $129,680. They would have a tax increase of $299.10 a year or $24.93 a month, but that was at the 20 mill increase.”
A public hearing on the county’s proposed budget is scheduled for 5:30 p.m. Sept. 3 in the commission chambers in the Seward County Administration Building. Warden said county leaders are already receiving phone calls and visits about the RNR notices mailed out.
“I would ask constituents to call or come in if they have questions regarding the notices so we can explain it to them,” she said.
