Defund police? Privatize Century II? Wichita braces for $50 million city budget hole

Wichita’s city leaders are bracing for massive cuts — $50 million — to make up for the revenue shortfall expected through 2022.

The city’s budget is taking a hit because of layoffs at some of Wichita’s largest companies and other economic fallout of the COVID-19 global recession.

The airlines industry, which is closely tied to Wichita’s aviation-dependent economy, has taken one of the biggest hits. Wichita’s aviation companies and largest employers, Spirit AeroSystems and Textron Aviation, have announced mass furloughs and layoffs.

With widespread layoffs, canceled events and lost wages, the city is bracing to miss out on sales taxes, user fees, interest earnings and other revenues until at least 2022.

Projected losses for the general fund are $11.5 million this year, $16.9 million in 2021 and $21.6 million in 2022. The general fund — which pays for city services such as police, fire, parks, transit and roads — was $250.5 million in 2019.

Wichita City Manager Robert Layton said raising taxes is not a responsible option, so the city has to make tough decisions.

“What we’re doing is we’re trying to prioritize our expenses,” Layton said. “We recognize because our residents and our businesses are in such difficult situations that we can’t grow our way out of this by taxes or additional fees. There may be a few user fees where it makes sense to tweak those, but we’re not going to balance the budget by increasing the revenue in that regard. So it has to be done more on the expenditure side and by finding savings through innovations and change of business practices.”

To cut costs, the city has instituted a hiring freeze, closed pools for the year and plans to privatize some services such as operation of Century II, its warrant office and the animal shelter.

The pandemic recession has also forced the city to adjust its expectations for some of its more ambitious plans for downtown Wichita and change its spending priorities.

City leaders are asking residents to go to wichita.budgetsimulator.com/ and fill out an online budget simulator to help decide what cuts to make on a limited number of city expenditures, which does not include many of the city’s more controversial economic development projects.

Some of the city’s largest economic development initiatives have quickly become liabilities and others have been put on hold during the coronavirus pandemic.

Riverfront Stadium, a publicly-funded $75 million ballpark built on the west bank of the Arkansas River in Delano to attract a Triple-A minor league baseball team, has yet to host an event. The project was funded using a mix of subsidies and incentives that depend on ticket sales, new development and increased commercial activity around the ballpark to pay down the city’s debt.

Layton said the city has not yet had to make any major adjustments to pay for the stadium. He said he hasn’t heard of any plans by developers to scale back or delay planned shops, restaurants, hotels and bars near the stadium that would help pay for the project with added sales tax and additional property tax that’s dedicated to the ballpark.

If the project flops or doesn’t start bringing new money into the project area, the stadium could drain other city funds.

Across the river from the stadium in downtown Wichita, the Riverfront Legacy Master Plan has been shelved for the time being.

The $1 billion public-private plan would have completely re-developed the east bank of the Arkansas River downtown. It called for tearing down Century II Performing Arts and Convention Center and building new, separate centers for convention and performing arts.

The city is moving forward with its plans to grow its police department, but the growth won’t come as fast as was previously planned, Layton said.

“Our situation is identical to what our residents and our businesses are going through,” Layton said. “We all have experienced significant reductions in the money coming into our households or into our businesses, and we have to adjust quickly in order to be able to move forward.”

Will Wichita defund police?

As Wichita faces a budget crisis, protesters across the country are calling for municipalities to defund large police departments and put that money into other types of social services.

That’s happening at the same time the city is trying to grow its police force as part of a three phase plan that started in 2018, adding millions more dollars to the police budget.

A 2017 staffing study called for adding 70 positions, including officers and support staff, over several years. The city approved funding an additional 32 positions in 2018 and 26 in the 2020 budget. The third hiring wave is likely to be postponed, Layton said.

“Recognizing the validity to those arguments, you have to have a much more holistic approach to dealing with public safety than we’ve done in the past,” Layton said. “I think you’ll find that the chief and mayor and council would find that to be of very high priority for us.”

The Wichita Police Department budget has more than doubled in the past two decades. In 2000, police received $46.2 million from the general fund, which comes from property taxes, motor vehicle taxes, franchise fees, sales tax revenues, intergovernmental aid and user fees.

Now, the police budget has ballooned to $93.8 million. On top of that, the department annually receives several hundred thousand dollars in federal grants.

In 2020, Wichita City Council approved spending more than a third of the city’s $254.6 million general fund on the police department.

Police spending has outpaced the rest of the city’s general fund, which has increased 57% since 2000.

Wichita will not make major cuts its police budget over the next two years, Layton said, “but it will contribute towards the deficit reduction.”

Since the COVID-19 outbreak, the city has reduced police spending by about 2% compared to the approved budget. Additional cuts in the next two years will come from not filling open support-staff positions and outsourcing the city’s warrant office.

Layton said national calls to reform police are on-par with the city’s plans. But he said “defunding police” is not a good way to describe what the city plans for its department.

“I don’t think that’s the right term to use,” Layton said.

“We ought to focus on the concept and not the term,” Layton said. “And the reason is because the purpose and goals (of defunding police) are in alignment with what the chief has been trying to accomplish in the four-plus years he’s been here. And that is to recognize that we need a more holistic approach to policing. That includes even more emphasis on community policing.”

Layton said one model that has been successful is the ICT-1 program, which partners a law enforcement officer with a mental health professional and a paramedic to respond to mental-health related 911 calls.

“When you talk about the issues that are being raised under defunding, it’s how do we provide the police the professional support they need so they do well what they do. But then we can have mental health professionals, domestic violence professionals and others who are backfilling or supporting them. I think what we’re going to do is have ongoing discussions about our comprehensive model that will address the core issues that we have in the community.

“There are important things that the police department has to work on: gun violence, violent crime, property crimes, you know, traditional things,” Layton said. “But when we deal with folks who are struggling because of current problems with our mental health systems, that’s why we implemented ICT-1, and that has turned out to be a great success.”

It’s unclear what other ways policing in Wichita could change in the immediate future, but the city’s on the right path, Layton said.

“We are much closer to 21st Century policing in this department than many other departments around the country. The way that we employ de-escalation tactics, you could go through a laundry list of items, in terms of either reforms that have been made or reforms that are in the works right now where we’ve shown the importance of addressing the community needs and being more responsive.”

Riverfront Legacy Master Plan paused

The coronavirus pandemic appears to have saved Century II — for now.

Instead of tearing it down, the city is now considering leasing it to a private operator in a similar arrangement to Sedgwick County’s agreement with ASM Global at Intrust Bank Arena.

Wichita would continue to own and maintain Century II, but a private company would manage events and collect earnings. Depending on the profit-share agreement with the operator, the move could save the city more than $2.5 million a year, Layton said.

“We know that Century II has significant facility issues that we have to address,” Layton said. “But I’m going to recommend that we pause before we go forward with any discussion about the expansion of convention space or remodeling space because I don’t know what the model is going to be.”

The Riverfront Legacy Master Plan, a massive development initiative driven by downtown booster organizations, has already cost the city $100,000. Planners called for tearing down Century II and investing $1 billion in public and private funds to grow the city’s convention, tourism and performing arts business.

All of the growth projections in those industries have been shattered by the COVID-19 pandemic. Travel restrictions, digital meetings and fewer dollars for leisure activities could change the convention industry for years to come.

“I really don’t know what the base level of demand will be for conventions and banquets and meeting spaces,” Layton said. “When the dust settles, I think we can make better decisions about the physical facility as well as how we staff that. I also think we may be better served by a model that involves the private sector and possible use of a private operator.”

No baseball at Riverfront Stadium

The Wichita Wind Surge have yet to play a game in the Riverfront Stadium.

The team negotiated to relocate from New Orleans after Wichita’s City Council agreed to build a new stadium and sell riverfront property around the stadium to the team’s owners for $1 an acre.

The land sale was expected to spur development by the team’s owner. The added sales tax and additional property taxes at the development were supposed to help pay off the stadium. But the team is not bound to provide any of the money for the stadium, beyond a $350,000-a-year management fee, or to develop the property.

The team has been granted an extension on its first payment because of the coronavirus pandemic. If owner Lou Schwechheimer decides not to develop the four acres, the land goes back to the city.

The stadium is also the anchor for a mammoth development immediately north of the stadium that’s expected to include a variety of uses, including a flagship hotel, apartments, shops, restaurants, office space and public plazas at the current site of the Metropolitan Baptist Church. The city agreed earlier this year to provide tens of millions in public subsidies for the project.

That project does not have any firm timeline for developers to complete work and they have indicated that they will develop only as market conditions allow. The city’s incentives don’t kick in until development is completed.

Layton said he’s optimistic that the two development projects will still happen and that the stadium won’t drain the city’s resources. Most of the larger payments on the bonds for the stadium don’t kick in for several years.

“The comfort I have is that the local developers for the property immediately adjacent to the stadium. ... They have not asked for any changes on that. I know that there are ongoing discussions regarding the first phase, and I wouldn’t be surprised to hear an announcement in 2020 about the next phase.

“I could be wrong about that, but no one has come to me and said, ‘Oh, man, we really need to re-calibrate and talk about a change,’” Layton said.

This story was originally published June 24, 2020 at 1:40 PM.