Memorandum

City of Lawrence

City Manager’s Office

Date:	August 2, 2012
To:	David Corliss, City Manager
From:	Casey Toomay, Budget Manager
CC:	Cynthia Wagner, Assistant City Manager Diane Stoddard, Assistant City Manager Jonathan Douglass, Assistant to the City Manager / City Clerk
RE:	City Commission Items Related to Adoption of the 2013 Budget

Please place the following items on the City Commission agenda for consideration at their August 7, 2012 meeting:

Public Hearing for Proposed 2013 Budget

Per action taken at the July 10, 2012 City Commission meeting, notice of a public hearing to be conducted on August 7, 2012 was published on July 21, 2012 in the Lawrence Journal World. The purpose of the hearing is to answer and hear questions of taxpayers relating to the City Manager’s recommended budget. The publication of the notice of budget hearing and the accompanying budget summary establish the maximum limits of the 2013 budget. Therefore, the City Commission may make changes, as appropriate, subsequent to the public hearing that would involve lowering, but not raising the expenditure levels of the published budget summary.

Per direction of the City Commission, the following adjustments have been made to the City Manager’s recommended Operating and Capital Improvement Budget.

General Operating Fund.  The City Commission directed staff to increase the proposed mill levy for the general fund by an additional 0.05 mill.  This is in addition to the City Manager’s original recommendation of an increase of .87 mill.  Additional information on the 0.92 mill levy increase is attached. 

Special Recreation Fund.  A funding request was made by the Lawrence Children’s Choir, asking for an annual allocation of $14,000 to fund scholarships.  This request was not included in the City Manager’s budget however, Commissioner Carter has proposed funding a one-time allocation of $10,000.  Staff recommends funding the request from the Special Recreation Fund as there is sufficient budget authority and fund balance available. 

The remainder of the 2013 budget will be as previously posted.  While the adopted budget for the general fund assumes expenditures will exceed revenues, the budget includes a transfer to the Capital Improvement Reserve Fund in the amount of $5,909,696 that will only be made if revenues exceed expenditures in 2013.  As shown on the attached projection, the budget will be balanced at the end of 2013 if departments spend 97.25% of their budgets.

Commission Action: Conduct public hearing for 2013 proposed budget. Adopt on first reading, Ordinance No. 8776 approving and appropriating the 2013 City of Lawrence Operating and Capital Improvement Budget, if appropriate.

Multi-year Capital Improvement Plan

As discussed at earlier study sessions, staff has prepared a multi-year plan for capital improvements.  The plan identifies the projects for which the City will issue debt over the next four years.  Many of the projects identified will also require funding from City reserve and/or operating funds. 

Commission Action:  Consider and approve the multi-year capital improvement plan, if appropriate.

Property Tax Ordinance

Following the provisions of KSA 79-2925b, staff recommends the adoption of an ordinance noting that in order to maintain essential city services, it will be necessary to utilize property tax revenues in an amount which exceeds the revenues budgeted in the previous year.

Commission Action: Adopt on first reading, Ordinance No. 8777, attesting to the increase in property taxes levied for 2013, if appropriate.

Debt Guidelines

Pursuant to City Commission direction, the Finance Director has reviewed the City’s existing Debt Guidelines and is recommending updates.  The updates, as explained in the attached memo, are based on an approximation of the averages of Aaa rated cities in Kansas.

As shown on the attached projection, the city will be at or below the proposed ratios at the end of 2014 even with the issuance of debt for the library, farmland and recreation center infrastructure, downtown parking, fire apparatus, and $5 million of other capital improvement projects included in the annual capital improvement budget. 

Commission Action:  Adopt City’s Debt Guidelines, if appropriate. 

Budget Calendar

The remaining dates related to adoption of the 2013 budget are shown below.

Tuesday, August 14	Budget ordinance second reading
Wednesday, August 15	Budget ordinance sent to LJW for publication
Thursday, August 25	Deadline to file budget with County Clerk
Thursday, December 1	County submits budget to State of Kansas