The city of Hays’ 2017 budget was set by a unanimous vote of the Hays City Commission at its Thursday meeting. There were no comments from residents during a public hearing.

Commissioners praised city staff’s efforts to hold the line on spending, but cautioned cuts — particularly to outside agencies — could be necessary in the future if sales tax revenues continue to decline.

Next year’s budget keeps the mill levy at 25 and does not increase any taxes or service rates. There will be no hiring of additional full-time staff members, and employees will not be given raises during the next fiscal year.

“I think next year, it’s going to be important that we do everything we can to get the raises for the employees,” Vice Mayor Shaun Musil said. “I will be honest with you, I think (outside agencies) is probably going to be where we cut next year if the sales tax (decline) continues.”

That sentiment seemed to be the consensus among commissioners, and a discussion regarding outside agency funding likely will be scheduled before the next budget process begins.

Commissioner Henry Schwaller IV noted city funding never was intended to be an “entitlement,” and said public support should not be guaranteed to any of the outside agencies in the future.

“I think our expectations should be, going into 2017, that there are no guarantees for any outside agency funding in 2018,” Schwaller said. “We start with a fresh slate. It doesn’t matter what they got this year. They have to justify what they want and what they’re going to do with it and what the outcomes are.”

The 2017 budget includes a total of $437,508 for six local agencies and the CARE Council, which distributes its funds to various programs. Downtown Hays Development Corp. specifically has been mentioned by commissioners as an agency that could see reduced support.

“I just don’t understand how DHDC is any different than the Chamber, whom we don’t fund at all, and who does a lot for our community like the DHDC does,” Commissioner Lance Jones said Thursday. “We have to look at outside agencies a little harder next year if it comes down to the same budget crunch that we’re looking at right now.”

The city’s 2017 budget is balanced and calls for nearly $38 million in non-levy funds.

The city’s street maintenance program is fully funded, and the top priority projects — reconstruction of Eighth and Allen streets — will be moved up in the schedule. Work on Eighth Street will begin next year, with Allen Street slated for 2018. Reserve funds allow the city to pay cash for large capital improvement projects, City Manager Toby Dougherty said.

Hays is the only city in Kansas that uses a city-wide sales tax to fund general operating expenses, Mayor Eber Phelps said. As such, city officials have expressed concern with declining sales tax collections during much of 2016.

“We are budgeting a reduction of $250,000 based on what we project off of this year; another $250,000 decline for 2017,” Dougherty said. “We offset that with $300,000 in expenditure cuts. We’re still $50,000 ahead of the game.”

The commission also unanimously approved a resolution that is required by state statute to reflect the city will be collecting more revenue in 2017 due to increased property valuation. The mill levy will remain unchanged at 25.

The city’s mill levy funds are used for special purposes such as public safety and equipment, Hays Public Library operations, airport operations and employee benefits. Those funds will total approximately $8 million next year.

“These are not the core functions of the city, but it does help provide some services,” Schwaller said. “Most people are not paying through their property taxes; they would fund the school district or the county.”

In other business:

• The commission agreed to sign a surface non-disturbance agreement as requested by Hays Medical Center, which is purchasing the former NEW building. The building is located in the city airport industrial park, for which the city has mineral rights.

• Commissioners decided against entering a contract for supplemental diamond grinding on sections of 27th and Canterbury streets. For more information about street grinding, see Sunday’s Hays Daily News or watch online at hdnews.net.