The Manhattan City Commission met in City Hall Tuesday to review funding requests from the proposed 2019 budget by the Manhattan Area Chamber of Commerce for economic development, their Military Relations Committee (MRC) and the Convention and Visitors Bureau (CVB) and take a look at the 2019 to 2023 Capital Improvements Program.
Assistant Director of Finance Hillary Badger reviewed the proposed 2019 budget and talked about the 2019 to 2023 Community Improvement Program.
Badger said despite saving a considerable amount from 2017, revenue shortfalls have threatened the city’s ability to reach a $2 million starting balance in the general fund for 2019. The balance is necessary for the city to be able to fund day-to-day operations and salaries.
As a result, she proposed the commission consider a utility reserve loan to shore up the starting balance. The loan would be short-term borrowing from utility funds. The plan she presented commissioners would borrow $1,090,000 from Water funds and $410,000 from Stormwater funds to increase cash reserves to $2.25 million in 2019.
To take the loan, commissioners would need to agree to a payment schedule with an interest percentage. The proposal had a three year repayment plan at 2 percent interest, amounting to yearly payments of $510,000 starting in 2020.
“We think this is getting us somewhere, it’s not getting us all the way there, but it’s a big step in the right direction,” Badger said.
Commissioner Reddi said she doesn’t want to cut from an agency’s funding and not be able to repay it if revenues drop further.
“This is something that’s a […] last resort,” she said. “This is good to have as an option, but there needs to be a lot more discussion before we go this route.”
Mayor Morse was also cautious about the idea, but said it might be something they have to do for the city to reach its starting minimum in the general fund.
Badger also talked about the mill levy impact in the proposed 2019 budget. She said initial mill levy increases calculated from funding requests in the 2019 budget would have raised the mill levy by 7.7 mills. Since then, city staff has worked to reduce spending and reduced the mill increase to 2.288 over 2018’s numbers. This would set the total mill levy impact at 50.645 mills.
Commissioner Jerred McKee expressed a desire to see more reductions in spending to slot the mill levy increase under one mill.
“If I were presented the budget today to vote on with a 2.2 mill increase, I would vote no on it,” McKee said. “Right now under one seems reasonable unless I’m presented further information.”
She also touched on the Community Improvement Program. Badger said that “over the last five years, the CIP has varied greatly from just over $400,000 in 2014 to $375,000 [in asks]for 2019.”
CVB Vice President Karen Hibbard requested funding amounting about $1.23 million for 2019, a slight increase from their 2018 budget of $1.21 million. This is funded directly by transient guest tax revenue, but doesn’t account for all of the $1.84 million projected to be collected this year.
“We take it very seriously that as the Convention and Visitors Bureau, our job is to attract visitors to come to enjoy this community to help drive those transient guest tax dollars, to increase those, and to also increase those sales tax dollars that make our community go round and round,” Hibbard said.
They also gave the commission updates on recent travel numbers and their economic impacts. Through May, hotel occupancy was at 62.3 percent, up 5.2 percent from 2018. Average daily rate was at $97.57 per night, up $3.46 from 2018. Revenue per room, or what the hotel actually takes home, was at $60.76 per room, up $7 from 2018. Total numbers of available rooms were down due to the closure of the Regency Inn and Motel 6, but total revenue through May reached $11,349,858, up $585,220 from 2018.
CVB Advisory Committee member Ben Siegel updated the commission on numbers for sporting events in Manhattan. He said they had 24 sporting events in the second quarter with 6500 participants that accounted for 2500 room nights in local hotels. This brought in $2.8 million.
There were also some events the city did not have facilities to accommodate. The USA Badminton Association needed ten courts to utilize Manhattan, but the city only has six. USA Swimming also wanted to come to Manhattan, but the city has no pools large enough for their needs.
“But they are showing interest, which is a good thing,” said Siegel.
Commissioner Usha Reddi said she wants to see a marketing push for Manhattan’s sporting facilities to attract events the city can already or will soon be able to accommodate when new facilities are completed.
“I want to do an aggressive push for the things that we do have coming our way, because one of the reasons we’re doing it is [an]‘if we build it, they will come mentality,’” Reddi said. “So instead of waiting for it to be built, I would like to have our name out there as aggressively as possible.”
Siegel also said there was an open house for meeting planners to check out the plans for the Manhattan Conference Center expansion and give feedback. He said the expansion plans to add an additional 14,000 square feet to the 16,371 square foot center.
He lastly talked of sales taxes derived from restaurants and eateries.
“In a somewhat flat sales tax year, a bright spot has been that accommodations and food services continues to be one of our strongest sales tax generators.”
Mayor Linda Morse expressed some concerns about the requested amount as it’s drawn from transient guest tax revenue, which were assuaged when Hibbard said they are prepared to do with less if they must if revenues are short.
Chamber of Commerce President Lyle Butler requested $188,000 in funding from the proposed 2019 budget for economic development. Butler said private investment makes up 70 percent of their economic development funds.
“The Chamber Board of Directors has not come and said we need more money from the city,” Butler said. “What we needed was your partnership, your staff, the efforts of the sales tax initiative that the voters passed to provide economic development dollars to focus on helping to attract and retain companies to build a workforce.”
Chamber Vice President of Community Development John Pagen talked about various workforce initiatives they have in place. They included career exploration days for high school students, classroom-to-career partnerships between sponsoring businesses and all fourth grade classes in USD 383, as well as the Soldier For Life program and the Communities to Call Home program.
Military Community Liaison Janet Nichols talked about what the MRC has going on. These included the ADVISE program (starting in September), a partnering program between soldiers transitioning out of the army and have an idea they’d like to stay in Manhattan, the upcoming rodeo, the Veterans’ Day parade, which they are in the process of planning, and the new Kansas Military Alliance. Nichols said the alliance allows her to network with professionals in similar roles to her around the state and build connections between the communities.
Chamber Director of Economic Development Trent Armbrust talked about the various partnerships the Chamber has with businesses and agencies. Armbrust also talked about updates at the Kansas Entrepreneurial Center. The Chamber is investing D Labs in the center, which the occupying business is matching, to increase the quality of the lab space. This includes updated chemical hoods, flooring and more. They’ll also be investing $10,000 to $15,000 in building security updates and $100,000 to $135,000 to update ventilation systems, the roof and more.
Armbrust also updated the commission on the state of the Manhattan Business Park. In addition to the park being uniformly zoned, development of the Kansas Gas property has started interior work and Ultra Electronics has slotted in to Lot 12 following the commission’s approval of an economic incentive package for the firm.
There are also four other lots that have received proposals from firms or are in contract negotiations with the Chamber already. With demand for space in the park so high, Armbrust said they have to start asking where to build next.
“This is the only property we have available that’s shovel ready in Riley County and Manhattan,” he said. “If all of [those negotiations and proposals]go through, our biggest lot is going to be four acres. That’s going to seriously hamper our ability to grow in Manhattan, so we really need to start to address the next business park.”
Armbrust said Pottawatomie County might be the spot for that, but he encouraged commissioners to think on it themselves.
Lastly, Chamber Board Chair Matt Crocker updated the commission about the Greater Manhattan Project, which has rebranded as Region Reimagined.
They contracted with consultant group Market Street Services to evaluate the city’s development and create a plan moving forward. Crocker said as a result of their work with Market Street, they now have a five year “community-based economic development plan to guide the Manhattan area and maximizing the impact of future growth opportunities.”
He said the plan has three goals: targeted economic diversification so the city does not rely too much on K-State and Fort Riley; attracting and retaining skilled, reliable workers; and expand the entrepreneurial ecosystem by attracting innovative businesses.
Crocker said the goals would be worked on by multiple new committees stocked with community members. They would work with an implementation director, who Crocker hopes will be hired in the next 60 days, to achieve the goals. He said they’ll also need to raise revenue to budget for this and other positions in Region Reimagined.
“The ultimate goal will be the creation of good jobs that will create local wealth, create opportunities for all residents, reduce poverty and income inequality, improve quality of life, and provide economic stability for generations to come,” said Crocker.
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