City Manager weighs in on Hotel Topeka, $15 million deficit ahead of budget meeting

TOPEKA (KSNT) - Ahead of Tuesday's major budget hearing, Topeka City Manager Robert Perez is giving incite into where things stand with addressing the $15 million deficit, fields questions about millions of dollars invested into Hotel Topeka, and the search to fill high-paying positions.

27 News Anchor, Rebekah Chung, sat down with Perez in a one-on-one interview to get answers on some of the most pressing questions facing city leaders.

HOTEL TOPEKA

City councilmembers will meet Tuesday, for the final time, to get people's input on the budget for fiscal year 2025. It's raising questions about where the money is going, including investments made toward Hotel Topeka.

"We and our partners need to ensure that investments are made to it, so we can attract conferences or visitors to the city," Perez said, after being asked about the millions of dollars invested into acquiring the hotel, and whether he agrees with his predecessor's position to take on the project.

However, can the city afford their investment?

Hotel Topeka is a long-standing hotel that the city's trying to turn into the next go-to spot to stay, if you're visiting town or hosting conferences. However, more money is being allocated toward upkeep as they look for a possible buyer.

"I think some people would question why we're spending money on the hotel, instead of maybe other areas that may need some help, when it comes to infrastructure, roads... What would you say to those people that may have those concerns?" Chung asked.

"Whether it be some of the HVAC or some of the other infrastructure-related improvements that the hotel needs, we have to do those, so that way we keep the A-C running and we keep the heater running in the Winter," Perez said. "So, if we don't make those investments, then nobody's going to stay there, or we could see our bookings continue to drop and then the City would have to make up that deficit."

Chung posed a follow-up question to Perez, regarding whether the money being invested could be allocated toward other areas.

"In having bought Hotel Topeka, we now have to put more money into taking care of it, which now takes away from other projects, you would say?" Chung responded.

"I would say that. Instead of making those investments into our streets or something, we're continuing to make those investments into the hotel," Perez said.

"But now, it's something you have to upkeep, because the city has it," Chung said.

"That's correct," Perez replied.

Perez said the city has been in the process of soliciting brokerage services to help find a buyer.

"What we are trying to solicit services for is brokerage, brokerage services," Perez said. "That way we can have somebody trying to be active in trying to find the right partner for us."

"BUILT FOR ZERO": ADDRESSING HOMELESSNESS

27 News also asked about the city's homelessness program. Topeka, like other cities in the state and nationwide, has struggled with the issue.

Perez said they've stopped working with "Sylver Consulting," so no money's going toward that agency. However, the group's feedback will "roll over" to their next project, which is establishing the "Built for Zero" model to help with housing.

"We're in the early stages of trying to develop our next steps," he said. "I met with the leadership from Topeka Rescue Mission last week, and we essentially asked that team... What is the vision or role of the city and county as far of those next steps."

Perez said they're still waiting to hear back on the proposal, so right now, there's no word on how much that will cost.

$15 MILLION DEFICIT

In the first part of the interview, which aired Sunday night, Perez spoke about addressing the $15 million deficit that the city's facing.

"We're definitely going to have to be creative with how we address that," he said.

Perez is already facing some tough decisions only a few months into the job. He said overall the 2025 budget is balanced, however, they're looking into "one-time reserve" funds to possibly fill the gap.

He said the shortage is being caused by lower revenue in sales tax and franchise fees. Franchise fees are usually tacked on to utilities, but were lowered this year by 5%. In addition, Perez said the rising cost of government is also to blame.

"Just the cost of service, our material increases, the fact that we're having challenges recruiting our engineers," he said. "We've had a number of our union negotiation contracts that have come in higher this year. We approved a 17% increase for our police department, so we can maintain competitive with pay, so hopefully that will help us with recruitment and retention."

HIRING POLICE CHIEF, HIGH-PAYING JOBS

The search is also on for the next police chief. With the former police chief wrapped in a discrimination lawsuit, and the turnover at the department, 27 News asked whether the city is looking at options outside of the city.

"As far as the candidate, I'm really open at this point to somebody from the outside or somebody within the TPD ranks, but ultimately what I'm hoping to get is the best candidate for our community," Perez said.

Perez is already getting to work, hiring his right-hand men. First, an Assistant City Manager role was filled, and now they're looking at hiring a Deputy City Manager. Both positions would rake in about $200,000 a year each.

"It seems like this would bring Topeka in line with other communities we've seen, but can we afford it?," Chung asked.

"Adding the Assistant City Manager position... we reclassified it, so that we didn't add a new position, we essentially just changed the job title of that position, and then we added the incremental funds that were needed to fully fund that position," Perez said. "The Deputy City Manager position was already an existing position that was already budgeted and just hadn't been filled in, in a long time." 

In a follow-up question, Chung asked Perez how each role would contribute to the city. Perez said both positions would help streamline the process.

"The way that I found the organization, everybody, all department heads were reporting directly to the City Manager," Perez replied.

"At least the way that we're setting it up right now, the Deputy City Manager will oversee our public safety; our police, our fire, our municipal courts teams," he continued. "Our newly appointed Assistant City Manager, Braxton Copley, he is now our point for all things utilities, all things public works, all things development."

Topeka City leaders will have to weigh a slew of options come Tuesday. The final budget hearing kicks off at the Holliday Building in downtown Topeka at 6 p.m.