Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
CC:	Diane Stoddard, Assistant City Manager Brandon McGuire, Assistant to the City Manager
FROM:	Casey Toomay, Assistant City Manager
DATE:	July 31, 2014
RE:	2015 Budget – Public Hearing

Please place the following items on the City Commission agenda for consideration at their August 5, 2014 meeting:

Conduct public hearing on the 2014 Budget and consider the following items related to the adoption of the 2015 budget:
Consider adopting on first reading, Ordinance No. 9030, approving and appropriating the 2015 City of Lawrence Operating and Capital Improvement Budget, if appropriate;
Consider adopting on first reading, Ordinance No. 9031, attesting to the increase in property taxes levied for 2015, and authorize publication of the notice of vote, if appropriate; and
Consider adopting on first reading, Ordinance No. 9004, establishing solid waste service rates, effective November 15, 2014, if appropriate.

Public Hearing for Proposed 2015 Budget

Per action taken at the July 22, 2014 City Commission meeting, notice of a public hearing to be conducted on August 5, 2014 was published on July 25, 2014 in the Lawrence Journal World. The purpose of the hearing is to answer and hear questions of taxpayers relating to the 2015 proposed budget. The publication of the notice of budget hearing and the accompanying budget summary establish the maximum limits of the 2015 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.

2015 Proposed Budget

Per direction of the City Commission at the City Commission on July 22, 2014, the following adjustments were made to the 2015 Operating and Capital Improvement Budget.

General Operating Fund. The City Commission directed staff to make the following adjustments to the General Operating Fund:

Description	Cost
Eliminated City Commission salary increases	$20,000
Eliminated 0.5 FTE Budget Manager position from City Manager’s Office	$40,000
Removed funding for conversion of part-time position to full-time position in City Clerk’s Office	$20,000
Eliminated repair to Salt Dome Roof from Street Maintenance Division	$40,000
Removed additional Inspector position from Engineering Division	$55,750
Reduced Commodities in Engineering Division to fund additional Inspector position	$55,750
Eliminated vehicle replacement from Engineering Division	$48,000
Eliminated vehicle replacement from Airport Division	$25,000
Eliminated vehicle purchase for expanded Rental Registration program from Code Enforcement Division	$51,000
General Operating Fund Reductions	$355,500

These reductions brought the total expenditures budgeted in the General Fund for 2015 to $81,680,914 and the proposed General Fund Mill Levy to 19.248 mills.

In addition, the Commission directed staff to spend down fund balance in order to make the following one-time payment:

Agency	Amount
Warm Hearts	$6,000
Van Go	$35,000
Lawrence Alliance	$4,000

Transit Fund. The Commission reduced the budget for the contribution to Johnson County for the K-10 Connector Service for 2015 by $80,000. The total proposed budget in the Transit Fund for 2015 is $5,206,009.

The remainder of the 2015 budget will be as previously posted. The total increase in the City mill levy for the proposed 2015 budget is 1.479 mills.

The adopted budget for the general fund assumes expenditures will exceed revenues by $6,722,663. However, 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 2015.

Commission Action: Conduct public hearing for 2015 proposed budget. Adopt on first reading, Ordinance No. 9030 approving and appropriating the 2015 City of Lawrence Operating and Capital Improvement Budget, 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.

House Bill 2047, passed by the State Legislature in 2014, also requires a “notice” of vote be published if a governing body approves a budget which includes an increase in property taxes levied over the prior year adjusted by the CPI.

Commission Action: Adopt on first reading, Ordinance No. 9031, attesting to the increase in property taxes levied for 2015, and authorize publication of the notice of vote, if appropriate.

Enterprise Fund Rate Ordinances

The 2015 Budget assumes increases in the rates customers pay for city water, sewer, and solid waste services. Separate ordinances for each must be adopted. Water service and sanitary service rates were adopted by the City Commission.

Solid Waste Services. As outlined in the attached memo, an increase for residential customers for implementation of curbside recycling was previously approved by the City Commission and will be effective in October 2014. An increase of two percent (2%) is recommended for commercial solid waste service, effective November 15, 2014.

Commission Action: Adopt on first reading, Ordinance No. 9004, establishing solid waste service rates, effective November 15, 2014, if appropriate.

Budget Calendar

The remaining dates related to adoption of the 2015 budget are shown below.

Tuesday, August 12	Budget ordinance second reading
Wednesday, August 13	Budget ordinances and notice of vote sent to LJW for publication
Monday, August 25	Deadline to file budget with County Clerk
Monday, December 1	County submits budget to State of Kansas