Memorandum

City of Lawrence

Finance Department

TO:	Dave Corliss, Interim City Manager
FROM:	Ed Mullins, Finance Director
CC:
Date:	June 23, 2006
RE:	Revised Assessed Values of Western Resources, ICL

The Douglas County Appraiser’s Office was requested to provide only the 2006 assessed values of Western Resources and ICL Performance Products (formerly Astaris) that were not located within the city limits of Lawrence. While the valuation of ICL did not change, there was a total of $10,486,660 in personal property that was located in Lawrence. The amounts have been further reduced by $7.1 million due to some changes in state assessed values for Western Resources that resulted from the actions of the state legislature. The following table has been updated to include the revisions.

Company	Real Property	Personal Property	Total
Western Resources	5,288,763	40,209,164	45,497,927
ICL	559,755	3,089,425	3,649,180

If the City’s current mill levy of 26.375 was applied to the above properties it would generate a total of $1,296,255 in property taxes. Of this amount, $758,810 would be credited to the General Fund. Based upon an estimated 2006 total city assessed valuation of $830,000,000, the annexation of the above properties would allow a mill levy reduction of approximately 1.56 mills to generate the same amount of property taxes.

In addition, the City would also receive franchise fee revenue from electricity, natural gas, and telephone expenses from the two businesses. With the new state law exempting new business equipment and the rapid depreciation of existing equipment, it is likely that the personal property totals listed above would be reduced over time. However, if the state offsets this loss with a future transfer payment the loss in total revenue may not be significant.

Because of the financial impact an annexation would have on the two properties, it may be desirable to grant a scheduled rebate of property taxes over a transition period.