Memorandum

City of Lawrence

City Manager’s Office

DATE:	July 22, 2014
TO:	David L. Corliss, City Manager
FROM:	Casey Toomay, Assistant City Manager
CC:	Diane Stoddard, Assistant City Manager Brandon McGuire, Assistant to the City Manager
RE:	2015 Budget Hearing

Please place the following item on the agenda for consideration of the City Commission at their meeting on July 22, 2014:

Staff requests the City Commission authorize publication of the notice of budget hearing establishing the maximum expenditure level for the 2015 budget and setting the public hearing date for August 5, 2014.

Background

Under K.S.A 79-1801, the governing body shall certify the amount of ad valorem tax to be levied on or before August 25. K.S.A. 79-2929 states that prior to filing the adopted budget, a public hearing must be held and that notice of the hearing must be given at least 10 days prior to the hearing. Pursuant to K.S.A. 79-2933, the hearing required to be held on the annual budget “shall be held not less than ten (10) days prior to the date on which they shall certify their annual levies to the county clerk as required by law.”

The required budget summary/notice of public hearing document sets the upper limits of the 2015 budget and the mill levy. Once the summary is published, the budgeted expenditure amount and the mill levy can be reduced but cannot be increased.

2015 Notice of Budget Hearing

The attached notice sets the public hearing for August 5, 2014 and establishes a maximum expenditure level for 2015 of $188,436,926.  The budget includes a mill levy increase of 1.897 mills.

While the recommended budget includes expenditures for City utilities, it does not establish utility rates for 2015. The City Commission previously adopted Ordinance 9008, setting the rates for the Water and Wastewater utility for 2015.  The Commission will consider the ordinance establishing solid waste rates for 2015 on August 5, 2014.  Should the City Commission decide to set rates at a level below those assumed in the recommended budget, expenditures in these funds will be reduced accordingly.

Changes from the City Manager’s Recommended Budget

The expenditure total of $188,436,926 is an increase of $40,000 over the City Manager’s Recommended Budget.  The increase is in response to direction provided by the Commission at the study session on July 8, 2014.

• ReINVENT Retirement.  The majority of Commissioners indicated support for Douglas County Senior Services for their “Reinvent Retirement” marketing campaign.  After meeting with staff, a revised funding request was submitted.  An additional mill levy increase of 0.047 mill is recommended in order to provide $40,000 annually for this new economic development program.
• Social Service Funding.  While it does not change the total expenditures budgeted for 2015, the Commission directed staff to eliminate the recommended $17,500 for Harvesters and to reallocate it as follows:
• $10,000 to the Douglas County Dental Clinic; and
• $7,500 to the Douglas County Child Development Association for the Healthy Sprouts program.
• Peaslee Technical Training Center.  The Commission indicated support for this new endeavor and requested clarification on the amount of the request and if it was on-going or a one-time request.  After follow up discussions with the Chamber, it is recommended that the mill levy increase of 0.12 mill remain to provide $100,000 for the Center as it is anticipated that some level of funding from the City will be required on an on-going basis. 
• Christmas Parade.  The 2015 budget now includes an additional $2,000 for support of the Lawrence Old-Fashioned Christmas Parade from the City’s Guest Tax Fund.

2015 General Fund Summary

As shown on the attached fund summary, even with the recommended increase of 1.897 mills, the budgeted General Fund expenditures exceed revenues by $812,967.  However, we will continue to monitor expenditures and adjustment will be needed in order to finish the year balanced to revenues collected in 2015.

A fund summary is also attached that shows General Fund expenditures would exceed revenues by $2.2 Million without the recommended mill levy increase. 

Action Item

Staff requests the City Commission authorize publication of the notice of budget hearing establishing the maximum expenditure level for the 2015 budget and setting the public hearing date for August 5, 2014.