Memorandum

City of Lawrence

City Manager’s Office

DATE:	6/17/13
TO:	David L. 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:	2014 Budget – Mill Levy Impact of additional expenditures

Pursuant to your request, information on an optional increase to the general operating fund mill levy to provide increased resources for additional expenditures in the 2014 budget is provided below.

Background

The City’s total mill levy is currently 29.534 mills. The breakdown by fund is as follows:

General Operating Fund	17.560
Debt Service Fund	8.511
Library Fund	3.463
Total	29.534

For purposes of building the 2014 budget, it is assumed that the assessed valuation will be the same as the assessed valuation used to build the 2013 budget. This means that one mill is equivalent to approximately $831,000. When budgeting revenues from property tax, the City only assumes that we will receive ninety-seven percent of the revenue generated by the mill rate. The difference can be attributed to property tax appeals and late tax payments.

The City Manager’s Recommended Budget for 2014 is likely to include a mill levy increase of 0.3 mill in order to fund the request for four additional dispatch positions in Emergency Communications as well as increased police overtime costs and increased equipment replacement in public works.

Without a reduction in existing services or an increase in revenue to support them, the following requests for additional expenditures are likely to remain unfunded for 2014:

Description of Request	Annual Cost	Mill Levy Required
Security Improvement at City Hall, Municipal Court	$200,000	0.241
Security Improvements at Public Health Building	$60,000	0.072
Loan to Lawrence Community Shelter	$500,000	0.602
Retiree Marketing Campaign	$30,000	0.036
Health Department Funding Increase for STD and HIV Testing	$14,000	0.017
Arts Center Request for Capital Improvements	$39,000	0.047
Arts Center Request for Increased Staffing Support	$51,000	0.061
Full Funding for Increased Arts Center Scholarships	$20,000	0.024
Full Funding for Library Request	$75,000	0.090
Full Funding for Humane Society Request	$59,700	0.072

Additional information is provided below.

Unfunded Requests

A description of the request, as well as the mill levy increase necessary to fund each is provided below.

Security Improvements at City Hall and Municipal Court. As previously discussed, recent legislative changes regarding concealed weapons in public buildings has raised a concern over safety at city facilities, particularly City Hall and Municipal Court. An option to improve safety at these facilities would be installation of a metal detector to be staffed by police ($200,000.) Mill Levy impact = 0.241 mill.

Security Improvement at the Public Health Building. Similarly, concerns about the security at the Public Health Building has also been raised. The facility, which is jointly owned and operated by the City and County, is home to the Health Department, Bert Nash, and the Visiting Nurses Association. The City’s share of the estimated cost of the improvements and personnel would be $60,000 annually. Mill Levy Impact = 0.072 mill.

Loan to Lawrence Community Shelter. The Lawrence Community Shelter has requested a loan from the City to pay the remaining balance of its construction expenses and for repairs to the roof of their new facility. LCS would repay the $500,000 plus interest over a period of 30 years. Whether the City could issue debt for this loan is also being explored. Mill Levy Impact = .602 mill.

Retiree Marketing Campaign. The Retiree Attraction and Retention Task Force Final Report included a marketing campaign to assist in bringing new residents to Lawrence and Douglas County. The City’s share of the continuing marketing campaign would be $30,000 annually. Mill Levy Impact = 0.036 mill.

Health Department Funding Increase for STD and HIV Testing. The Health Department has requested an increase of $14,000 in annual funding for their operations to replace funding cuts from the State for HIV and STD testing. Mill Levy Impact = 0.017 mill.

Arts Center Request for Capital Improvements. The Arts Center also requested funding for improvements to their kitchen in order to be able to accommodate more events and rental opportunities as well as replacement of their phone system. Mill Levy Impact = .047 mill.

Arts Center Request for Increased Staffing Support. The Lawrence Arts Center requested an increase of $51,000 in annual funding for operations to pay for increased custodial and technical staff. However, without an increase in revenue, the City Manager’s recommended budget is likely to maintain funding for City support of Lawrence Arts Center operations at 2013 levels. Mill Levy Impact = 0.061 mill.

Full Funding For Increased Arts Center Scholarships. The Arts Center also requested an increase of $25,000 in funding for scholarships for their programs. The City Manager is likely to recommend an increase of $5,000 but would not recommend any additional increase without a revenue source to support the ongoing expense. Mill Levy Impact = 0.024 mill.

Full Funding for Library Request. The City Manager is likely to recommend spending down fund balance in order to provide an increase of $100,000, or 3.1% for the Lawrence Public Library for 2014. The Lawrence Public Library requested an increase of 5.3%, or $173,628 for 2014 however, the City Manager is not likely to recommend any further increase without an increase in the mill levy to support this ongoing expense. Mill Levy Impact = 0.090 mill

Full Funding for Humane Society Request. The Lawrence Humane Society has requested an increase of $79,700 for 2014 in order to recover their cost of providing animal shelter services for the City in lieu of a City’s operated animal shelter. The City Manager is likely to recommend an increase of $20,000 for 2014, however, any additional increase should be accompanied by a revenue increase. Mill Levy Impact = 0.072 mill.

Other Items. If there are additional City departmental or outside agency funding requests that need to be analyzed to determine mill levy impact, City Commission direction would be appropriate.

Conclusion

The City Manager’s Recommended Budget is likely to include a mill levy increase of 0.3 mill in order to provide four additional dispatchers for emergency communications, increased police overtime costs, and equipment replacement in public works. Despite the mill levy increase, a number of unfunded requests remain. Any additional ongoing expenditures should not be added to the City budget without an ongoing revenue source to support them.