The uniqueness of this was the reason for its subsequent defeat. Many, including the eventual City Commissioners John Madden and John S. Stevens, opposed it, claiming that revenue bonds were a new and hidden form of taxation. When the split commission finally came to agreement on a new proposal, general obligation bonds were issued to gain the acceptance of Madden and Stevens, and the issue of sewer charges was dropped. A few years later, however, the use of the charges again was brought up, this time to serve as a means for reducing the property tax. Backstrom described the fiscal problems facing Wichita in a July 7, 1959, letter to the City Commissioners in the 1960 annual budget, "The burden of financing the proposed 1960 budget is once again placed, in increasing measure, upon the property owners of the city. Actions taken in recent years to reduce or hold the ad valorem mill levy have exhausted all general operating fund reserves. Furthermore, the additional sources of revenue intended to offset the loss of reserves and alleviate the ad valorem tax structure have not accomplished the purpose. The loss of anticipated revenue from such sources as intangibles taxes, business license taxes, sales tax revenues, and sewer service charges has served to further aggravate the distressing ad valorem tax picture." (1960 Annual Budget). In the next year's annual budget, Backstrom reiterated the problems in a letter dated July 5, 1960, emphasizing the continued reliance on the property tax as well as the decline in economic growth. "The general economic conditions of the Wichita community," he said, "have had a serious effect on the city's financial prospects." (1961 Annual Budget). These pessimistic appraisals prompted renewed actions to find alternative sources of funding. When combined with improved economic conditions, Backstrom was more optimistic in the 1962 annual budget, as shown in a July 11, 1961 letter. Two new sources of revenues were mentioned which would be implemented in the coming year: investment of idle funds, to earn $100,000 in 1962, and a new comprehensive business license program, raising an expected $200,000. "The use of the above new revenue sources," Backstrom claimed, "along with the increased cash balance, makes it possible to finance the city manager's budget with an ad valorem tax levy of 25.967 mills," a 0.35 mill reduction. He went on to recommend a sewer charge to reduce the mill levy further, "The use of a sewer service charge to finance the debt service on sewage treatment works and main sewers, and the operation and maintenance of the sewerage system, could result in a tax levy reduction of one to three mills, depending upon the rate schedule to be adopted." (1962 Annual Budget). Even with the improved conditions, the city hoped to find means of reducing the property tax, on which it continued to rely heavily. In 1961, the City Commission responded to pressures from the community and ordered a study into the kind of alternate sources of revenue available. The commission adopted a policy and a six-point program to reduce the property tax on October 10, 1961, instructing the city manager to make recommendations on its implementation. The second point expressed the commission's intent to "examine all non-property revenue sources that are legally available to the city and which are in common use in other cities as a potential revenue source for Wichita." The two top candidates recommended for use were the business licensing tax and the sewer charge. The licensing tax was officially enacted in February of 1962, helping to lower the levy three-fourths of a mill. The city then considered "the second of its major tax-reduction steps--and a far bigger one," a sewer service charge. (Eagle, 4/30/62). Carl A. Bell,mayor1962-1963. Mayor Carl Bell pushed for the charge, calling on Backstrom and Hess to prepare an ordinance enacting it. It was finally drafted, written by Robert Morton, Wichita's former special water counsel. On May 1, 1962, the City Commission placed it on first reading. The ordinance called for the sewer charge to be based on the average water usage for the three winter months of December, January, and February, in order to reflect the base water use, and subsequent use of the sewers, rather than also considering summer uses like yard watering and swimming pools. In addition, the charge would be added to the water bill, which would be levied monthly instead of quarterly. The main support was based on its attractiveness to businesses through lower property taxes and as a proper way of taxing a service which was similar to water or electricity. A public hearing was set for May 15 to garner public opinion on the proposed charge. Technicians Bob Gile and Dwaine Schuldt review water distribution system maps. The city prepared for the hearing by sending copies of the ordinance to local groups and industries for comments. While some people opposed a new tax, most were in favor of the proposal. Will Price, president of the Chamber of Commerce, revealed the major issue when he informed the commission of the chamber's support of the ordinance if the city would revise the ordinance "to make sure that the money will be used to lower the ad valorem tax." The commission unanimously voted to delay final consideration for one week to make the necessary changes and to insure that property taxes would be reduced, not only in the present, but also in the future. (Eagle, 5/15/62). The City Commission considered the matter again on May 22 and approved an amendment which required that "the ad valorem tax be reduced to the fullest possible amount of the sewerage tax," according to Bell. In essence, the amendment insured that sewer maintenance and treatment expenses could be paid for only by the sewer charge revenues, and not from the property tax, which would allow the new charge to simply raise additional revenues. Following the adoption of the amendment, the commission unanimously approved Ordinance 26-506, which became effective August 5, 1962. When City Manager Russell McClure, who took over in April, 1962, offered the 1963 annual budget, the effect of the sewer charge was noticeable. His letter to the City Commission on August 17, 1962, emphasized the 4.111 reduction in the mill levy. "The principal reason for the property tax reduction," it read, "is the adoption of a sewer service charge, which is estimated to provide $1,581,000 during 1963, and will finance the operation and maintenance of sanitary sewers, sewage treatment, and debt service requirements." (1963 Annual Budget).
The uniqueness of this was the reason for its subsequent defeat. Many, including the eventual City Commissioners John Madden and John S. Stevens, opposed it, claiming that revenue bonds were a new and hidden form of taxation.
When the split commission finally came to agreement on a new proposal, general obligation bonds were issued to gain the acceptance of Madden and Stevens, and the issue of sewer charges was dropped. A few years later, however, the use of the charges again was brought up, this time to serve as a means for reducing the property tax.
Backstrom described the fiscal problems facing Wichita in a July 7, 1959, letter to the City Commissioners in the 1960 annual budget, "The burden of financing the proposed 1960 budget is once again placed, in increasing measure, upon the property owners of the city. Actions taken in recent years to reduce or hold the ad valorem mill levy have exhausted all general operating fund reserves. Furthermore, the additional sources of revenue intended to offset the loss of reserves and alleviate the ad valorem tax structure have not accomplished the purpose. The loss of anticipated revenue from such sources as intangibles taxes, business license taxes, sales tax revenues, and sewer service charges has served to further aggravate the distressing ad valorem tax picture." (1960 Annual Budget).
In the next year's annual budget, Backstrom reiterated the problems in a letter dated July 5, 1960, emphasizing the continued reliance on the property tax as well as the decline in economic growth. "The general economic conditions of the Wichita community," he said, "have had a serious effect on the city's financial prospects." (1961 Annual Budget).
These pessimistic appraisals prompted renewed actions to find alternative sources of funding. When combined with improved economic conditions, Backstrom was more optimistic in the 1962 annual budget, as shown in a July 11, 1961 letter. Two new sources of revenues were mentioned which would be implemented in the coming year: investment of idle funds, to earn $100,000 in 1962, and a new comprehensive business license program, raising an expected $200,000. "The use of the above new revenue sources," Backstrom claimed, "along with the increased cash balance, makes it possible to finance the city manager's budget with an ad valorem tax levy of 25.967 mills," a 0.35 mill reduction. He went on to recommend a sewer charge to reduce the mill levy further, "The use of a sewer service charge to finance the debt service on sewage treatment works and main sewers, and the operation and maintenance of the sewerage system, could result in a tax levy reduction of one to three mills, depending upon the rate schedule to be adopted." (1962 Annual Budget).
Even with the improved conditions, the city hoped to find means of reducing the property tax, on which it continued to rely heavily. In 1961, the City Commission responded to pressures from the community and ordered a study into the kind of alternate sources of revenue available. The commission adopted a policy and a six-point program to reduce the property tax on October 10, 1961, instructing the city manager to make recommendations on its implementation. The second point expressed the commission's intent to "examine all non-property revenue sources that are legally available to the city and which are in common use in other cities as a potential revenue source for Wichita." The two top candidates recommended for use were the business licensing tax and the sewer charge. The licensing tax was officially enacted in February of 1962, helping to lower the levy three-fourths of a mill. The city then considered "the second of its major tax-reduction steps--and a far bigger one," a sewer service charge. (Eagle, 4/30/62).
Carl A. Bell,mayor1962-1963.
Mayor Carl Bell pushed for the charge, calling on Backstrom and Hess to prepare an ordinance enacting it. It was finally drafted, written by Robert Morton, Wichita's former special water counsel. On May 1, 1962, the City Commission placed it on first reading. The ordinance called for the sewer charge to be based on the average water usage for the three winter months of December, January, and February, in order to reflect the base water use, and subsequent use of the sewers, rather than also considering summer uses like yard watering and swimming pools. In addition, the charge would be added to the water bill, which would be levied monthly instead of quarterly. The main support was based on its attractiveness to businesses through lower property taxes and as a proper way of taxing a service which was similar to water or electricity. A public hearing was set for May 15 to garner public opinion on the proposed charge.
Technicians Bob Gile and Dwaine Schuldt review water distribution system maps.
The city prepared for the hearing by sending copies of the ordinance to local groups and industries for comments. While some people opposed a new tax, most were in favor of the proposal. Will Price, president of the Chamber of Commerce, revealed the major issue when he informed the commission of the chamber's support of the ordinance if the city would revise the ordinance "to make sure that the money will be used to lower the ad valorem tax." The commission unanimously voted to delay final consideration for one week to make the necessary changes and to insure that property taxes would be reduced, not only in the present, but also in the future. (Eagle, 5/15/62).
The City Commission considered the matter again on May 22 and approved an amendment which required that "the ad valorem tax be reduced to the fullest possible amount of the sewerage tax," according to Bell. In essence, the amendment insured that sewer maintenance and treatment expenses could be paid for only by the sewer charge revenues, and not from the property tax, which would allow the new charge to simply raise additional revenues. Following the adoption of the amendment, the commission unanimously approved Ordinance 26-506, which became effective August 5, 1962.
When City Manager Russell McClure, who took over in April, 1962, offered the 1963 annual budget, the effect of the sewer charge was noticeable. His letter to the City Commission on August 17, 1962, emphasized the 4.111 reduction in the mill levy. "The principal reason for the property tax reduction," it read, "is the adoption of a sewer service charge, which is estimated to provide $1,581,000 during 1963, and will finance the operation and maintenance of sanitary sewers, sewage treatment, and debt service requirements." (1963 Annual Budget).
Water Utilities City Hall, 8th Floor455 N. MainWichita, KS 67202