On Tuesday, April 25, the City held a joint meeting with the City Council, Parks and Recreation Advisory Board, and the Parks Facilities Steering Committee to discuss the future of recreation facilities in Merriam. City Administrator Chris Engel presented an overview on the topic, including information about the problem as it exists today, the process the City has gone through so far, and the options for moving forward.
Since 2014, the City of Merriam has been extensively studying the current status of our aging Parks and Recreation facilities and exploring what the future holds for recreation in our community. Below are links to all of the posts, articles, and presentations we’ve done on the topic to make it easy for you to get up to speed on this issue.
Problem: Current State of Facilities
- Merriam Parks and Recreation Facilities Issues (Video)
- Maintenance challenges grow as new issues are discovered
- Facilities Maintenance Issues (2/27/2017 City Council Presentation)
Solutions: The Process
- Susan Richards Johnson Study – IBFCC Renovation Study
- Larkin Aquatics Study – Merriam Aquatic Center
- Recreational Facilities Steering Committee
- “Committee formed to assess options for much-needed Parks and Recreation facilities improvements” (Summer 2016 Highlights)
- Parks and Recreation Survey Findings Report
- Survey results bring community needs into focus
- Two key sets of findings from the Parks Facilities Survey
- Process and early concept renderings
- What the community wants and how to fund it
- Community members tour area facilities
- “MAC/IBFCC Master Plan Update” (Fall 2016 Highlights)
- “Shaping the Future of Parks and Rec Facilities” (Winter 2016 Highlights)
- Joint meeting of steering committee/city council helps bring plan closer to completion
- Recap of Dec. 13, 2016 public meeting
- Final Facilities Master Plan – Executive Summary & Full Report
- Council eliminates short-term fix option for addressing issues at the Irene B. French Community Center
Ability: Funding Strategies and Budget Implications
- Budget Implications
- Potential funding strategies
- “The ‘Pull Factor: Leading Kansas in Attracting Retail Business” (Summer 2016 Highlights)
- KS Department of Revenue – Pull Factor Annual Report
- Funding options to consider if the City builds a new community center
- Maintaining a competitive sales tax advantage with a ¼-cent increase
In a recent City Council meeting, staff outlined options available for issuing bonds to build a new Community Center – if that is how the public decides to resolve the serious issues with current recreation facilities.
City Administrator Chris Engel followed up with a presentation to Council on March 27, which demonstrated that if bonds issued to fund a new community center are paid for with a new ¼-cent sales tax, the City will continue to maintain a competitive advantage in the retail marketplace. Essentially, he answered the question, “Will increasing the sales tax rate deter consumers and residents from making purchases in Merriam?”
One way to answer this question is by comparing Merriam’s sales tax rate with those of other Johnson County cities, plus neighboring Kansas City, Kansas. As of April 1, 2017, Merriam’s city sales tax rate is 9.225%. If you look at city sales tax rates from other neighboring cities and compare them, Merriam is right in the middle (see below). With the addition of a new ¼-cent city sales tax, the rate would rise to 9.480 – still lower than rates in nearby Shawnee, Fairway and Mission.
However, many retail centers in the cities with lower city sales tax rates than Merriam charge an extra sales tax at the point-of-sale (POS) — where you actually buy goods and services (hardware store, car dealership, barber shop, etc.). This additional sales tax is usually the result of a CID or TDD, tools used by cities to encourage economic development or fund transportation infrastructure projects.
A CID, or community improvement district, allows retail developments to charge an additional sales tax for a variety of site improvements. A TDD, or transportation development district, is similar to the CID except that the funds from the sales tax increase can only be used on streets and curbs.
For example, Olathe’s slightly lower city sales tax rate is 9.475%, but the consumer must also consider the many CID and TDD retail districts with additional sales taxes that increase rates paid at the point-of-sale (POS) from 10.475% up to 11.475%. Areas of Olathe that charge these sales tax rates include those located in the I-35 and 119th St. area; and the I-35 and 135th St. area. So, despite a lower city sales tax rate, many shopping destinations in Olathe actually charge a higher sales tax rate than Merriam.
Kansas City, Kansas’ sales tax rate is 9.375%. If shopping at the Legends, any place around the race track, and 39th and Rainbow, the rates increase to a range of 9.475% to 11.375% due to the TDD and CID taxes in those areas. These rates are all still higher than Merriam.
The same goes for Roeland Park and Lenexa. Roeland Park’s sales tax rate is 9.225%, but off Roe Avenue, the Lowe’s, Wal-Mart and Price Chopper shopping areas have sales tax rates between 9.72% to 10.225%, as many of these add CID and TDD sales taxes at the POS.
Lenexa’s sales tax rate for areas around Oak Park Mall, 87th and Renner, 87th and Rosehill, and 95th and Quivira all have sales tax rates of 10.350%, due to CID taxes. This is higher than the city rate of 9.35%.
While Overland Park has a comparatively low city sales tax rate of 9.10%, many of their shopping areas, including the 95th St. corridor, the 135th St. corridor, and the 119th St. corridor have rates of 10.10%. The 91st and Metcalf area, which has a CID tax for two car dealerships, also charges a 10.10% tax rate – higher than sales tax charged at any of Merriam’s car dealerships.
Leawood’s city sales tax rate is 9.100%, but prime retail centers at 119th and Roe, 119th and Nall and Town Center Plaza all have CD and TDD taxes, bringing sales tax up to 10.100%.
Prairie Village has two main shopping areas – The Village and Corinth Square. The city sales tax rates in these two shopping areas is 9.975% due to their CID tax, while all other retail areas of town have a 8.975% sales tax rate.
Merriam currently does not have any CID or TDD areas. If voters approved an additional ¼-cent tax to pay for new recreational facilities, consumers would only pay a 9.480% sales tax rate. When looking at city sales tax rates, then taking additional CID and TDD taxes into consideration, this is lower than nearly every comparable retail development in Johnson County cities.
In conclusion, Engel reported that an additional ¼-cent sales tax would NOT put Merriam at a competitive disadvantage with neighbor cities. He further commented that staff would not recommend a sales tax increase if they believed it would harm the City, its residents, or its strong retail economy.
“Most people who pay Merriam’s sales tax come from outside our community. Last thing we want is to have a sales tax increase that gives us a competitive disadvantage,” he said. “It doesn’t matter how strong our sales tax base is if we scare off all the people who come here to spend their hard-earned money; or the people who live here that spend their hard-earned money on the things that we offer in our community.”
The most recent issue of Merriam Highlights and Recreation should be in your mailbox any day now, and right in the center is a special publication dedicated solely to the City’s Recreational Facilities issue. It takes most of the information on this blog and condenses it into a simple, easy-to-read primer about the problems Merriam faces with its community center and aquatic center, and some possible solutions based on what residents have said they want.
As Merriam staff enters the 2018 budget planning season, a preliminary analysis of how the City would fund a new community center with indoor / outdoor aquatics amenities will begin. There are many options to consider when developing a funding strategy for a project of this scale. However, residents will ultimately decide how the City proceeds, as a public vote will be required to build a new recreation facility.
City sales tax collections fund more than half of the general fund operating expenses and capital improvement projects. City sales tax collections increased from $7.6 million in 2013 to $9.9 million in 2016 thanks to new retail and the state of our current economy. According to statistics from the Kansas Department of Revenue, the non-resident contribution to sales tax, also known as the pull factor, is at a rate of more than 4.67. This means that for every $1 a Merriam resident pays in sales tax here, a non-resident pays $4.67.
Residents seem to recognize the significance of Merriam’s sales tax revenue picture as it relates to providing high-quality City services and amenities. A citizen survey completed as part of the Recreational Facilities Master Plan in 2016, indicated that a ¼-cent sales tax would be residents’ most desired funding source if new facilities were built. A new ¼ cent sales tax could generate an estimated $2.05 million per year to pay for the new facility.
Building a new facility is estimated to cost $30 million, and Merriam City staff anticipates issuing bonds to fund up to $25 million of this amount. Annual debt service costs for 10-year or 20-year bonds, based on today’s rates, would be approximately $2.8 million for a 10-year bond, and $1.67 million for a 20-year bond. The 20-year bond would cost $5 million more in debt service over the life of the bond, but offers more affordable annual payments.
Revenue generated through a ¼-cent sales tax would cover the cost of 20-year debt service payments, but would be significantly short of the 10-year debt service payment by approximately $770,000 per year. However, funds from the City’s capital improvement program could be reprogrammed to support the debt service payments.
Lastly, the information used to study potential funding strategies is based on current retail figures, and does not take into consideration potential for new sales tax opportunities down the road, or other factors. Based on available information and these considerations, the City has the capacity to fund a new community center that includes indoor and outdoor aquatic features. Now the question is “should we pursue this endeavor?”
The results of citizen satisfaction surveys consistently state that residents place a high priority on maintaining Merriam’s Parks & Rec facilities. In the 2012 survey, a question asked which Parks and Rec items should receive the most attention from City leaders in the coming years? The top five responses included:
1. Maintenance of parks
4. Park Amenities
5. Fitness Center
This information provided direction for evaluating budget priorities, and during the past 4 ½ years various projects were completed to meet these needs. Staff implemented practices that improved mowing, landscaping and parks maintenance equipment, gutters and downspouts, playground equipment and monument signs, as well as renovations to the Fitness Center.
The current priorities — from an operations and services standpoint — are the Irene B. French Community Center and the Merriam Aquatic Center. When addressing the many structural and systems issues at these facilities, a review of various codes and regulations must be considered. Usually this involves additional costs to remove walls where a series of new problems are exposed. Some of the repairs for these new discoveries cost hundreds of thousands of dollars the City was not planning to spend on facilities maintenance. Yet, this is a reoccurring situation we face when working to keep facilities open and running.
The Fitness Center renovation project at the IBFCC is a fairly recent example of how planned maintenance projects can be restricted due to the age of the building and an inability to comply with building codes. The original plan was to update the space to an open floorplan, but due to fire code restrictions — including no sprinkler system — all doors and walls had to remain.
The same thing happened with updates to the Art Gallery. Circulation is difficult with small rooms and doorways, yet removing walls or widening doorways is not permitted. The hardwood floors are beautiful, but at the end of their useful life which is evident by thinning and breaking boards.
Staff does its best to maintain facilities with available resources, but structural limitations, unknown issues below the surface, cost of repairs, and the inability to meet current building codes prevent us from doing all that needs to be done. Since facility studies were completed in 2014 and 2015 additional issues have arisen. Due to all the needed repairs we know about, unknown problems we frequently encounter, and those recently discovered, there’s a major concern that renovating existing facilities might cost much more than the anticipated $10–$12 million.
At the Feb. 27, 2017 Merriam City Council meeting, Parks and Recreation Director Anna Slocum made a presentation that featured photos of many of the newest problem areas at the IBFCC and the MAC, as well as new photos of some of the known issues. View the presentation below:
The heart of the Irene B. French Community Center (IBFCC) is more than 100 years old. The original stone building was Johnson County’s first K-12 school, then home to a variety of other public institutions. Over the years the original building was either added onto or modified on multiple occasions. In the late 1980s the city purchased the vacant building and made further additions and modifications to create the current community center. Now, 25 years later, the multiple additions and modifications, as well as floods and systems failures, have taken their toll and become very expensive to maintain. The IBFCC’s roof leaks and its basement floods creating hidden mold issues; the temperature is either too hot or too cold; each shift in wind direction is accompanied by a different sewer odor; original ceiling tiles intermittently fall through the existing ceiling tiles; and concrete and mortar crumbles. The city has done everything it can to keep the building in service. However, the facility is at the end of its useful life.
Similarly, the Merriam Aquatic Center (MAC) also faces serious age-related issues. The filter house and pool basins are more than 30 years old and the bathhouse older than 55 years old. Neither the IBFCC or MAC provide adequate access to people with disabilities and neither is fully compliant with modern life-safety or building codes. In short, the IBFCC and MAC require prompt attention and the city cannot continue the current practice of making expensive, unplanned repairs as they arise.
To that end, beginning in 2014 the city began engaging professional consultants to provide comprehensive assessments to determine what it would require to continue operating these facilities, specifically in the areas of mechanical, electrical, plumbing, accessibility, safety, and engineering. Findings of these studies provided detailed scenarios for addressing these issues and clearly determined that extensive, costly repairs are necessary.
Due to the high cost of those solutions, a resident steering committee was formed in late 2015 to investigate the future of recreation facilities in Merriam. As part of that year-long process there were multiple opportunities to solicit public feedback and design a concept around what residents said they want, including amenities residents indicate they would value most in a new facility. At the conclusion of that process the professional consultants presented a facility concept and business plan consistent with information gathered during extensive public engagement activities.
Now, after several years of comprehensive studies, gathering public input, and thoughtful deliberation, the city is confronted with three possible solutions: an option that addresses minimal issues and repairs, an extensive remodel option, and a build-new option. However, as staff considers these solutions and long-term budget implications, it becomes clear the first option is no longer viable and staff would like to eliminate it from future consideration.
Over the past year, as city staff worked with the public to determine an appropriate path forward, it has become very clear that our existing facilities do not meet the community’s current needs. Pursuing an option that only addresses the bare minimum issues, for an estimated combined cost of $4 – $6 million, is not forward-thinking, and does not move the needle toward meeting the community’s needs. By simply addressing our failing systems, the city would not resolve the deficiencies in our ability to offer meaningful programs or the inefficiencies of operating a community center in a 100-year-old school. Simply stated, after spending millions of dollars the current needs of Merriam residents would not be addressed as there would be few noticeable improvements. Not to mention we would continue to operate within building spaces that are still between 30 – 100 years old and remain vulnerable to further age-related failures down the road.
Staff remains committed to facilitating a public discussion about the future of city recreation facilities. Eliminating an option from consideration that is simply a short-term fix clarifies a commitment to ensuring that current and future residents will continue to enjoy the safe, inclusive, high-quality experiences they expect and deserve from Merriam’s recreation facilities.