Memorandum
City of Lawrence
City Manager’s Office
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TO: |
Diane Stoddard, Interim City Manager |
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FROM: |
Casey Toomay, Assistant City Manager |
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DATE: |
June 30, 2015 |
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RE: |
City Commission Q&A Memorandum |
The following memo provides responses to requests for information from City Commissioners related to the 2016 Budget. Additional information will be added as questions are raised.
Q: Mayor Farmer requested sales tax and guest tax rates from other cities in Kansas.
A: The rates from several cities in the region are reported in the following table.
|
City |
Tax Rate |
Addition |
Total Sales Tax 7/1/15 |
Transient Guest Tax |
Total Tax |
|
Bonner Springs |
8.900% |
0.35% |
9.250% |
4.00% |
13.25% |
|
Wichita |
7.150% |
0.35% |
7.500% |
6.00% |
13.50% |
|
Baldwin City |
8.400% |
0.35% |
8.750% |
5.70% |
14.45% |
|
Shawnee |
9.000% |
0.35% |
9.350% |
6.00% |
15.35% |
|
Lawrence |
8.700% |
0.35% |
9.050% |
6.00% |
15.05% |
|
Ottawa |
8.750% |
0.35% |
9.100% |
6.00% |
15.10% |
|
Olathe |
8.875% |
0.35% |
9.225% |
6.00% |
15.23% |
|
Merriam |
8.625% |
0.35% |
8.975% |
7.00% |
15.98% |
|
Topeka |
8.800% |
0.35% |
9.150% |
7.00% |
16.15% |
|
Leawood |
8.500% |
0.35% |
8.850% |
8.00% |
16.85% |
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Lenexa |
8.750% |
0.35% |
9.100% |
8.00% |
17.10% |
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KCK |
8.775% |
0.35% |
9.125% |
8.00% |
17.13% |
|
Leavenworth |
9.150% |
0.35% |
9.500% |
8.00% |
17.50% |
|
Overland Park |
8.500% |
0.35% |
8.850% |
9.00% |
17.85% |
|
Roeland Park |
8.625% |
0.35% |
8.975% |
9.00% |
17.98% |
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Mission |
9.000% |
0.35% |
9.350% |
9.00% |
18.35% |
Q: The Commission requested information on the level of actual Service Charges collected in the General Fund in 2014 compared to budgeted charges.
A: Revenue from the Service Charges category was budgeted at $753,300 in 2014 but the City collected $461,222 in that year, a $292,078 difference.
Ø In 2014, payments made to the City from Douglas County for Planning operations were budgeted in the Service Charges category but the actual revenue was recorded in the Miscellaneous Revenue category. That amount totals $189,200 in 2014.
Ø Beginning in 2014, charges received for the Youth Sports Complex were deposited in the Recreation Fund because YSI expenditures are recorded in that fund. The decision to reallocate the YSI revenues was made after the 2014 budget was adopted. That amount totals $81,600.
Ø The 2014 budget included $100,000 in reimbursements received by Public Works. The reimbursements come from KDOT for actual expenses incurred by the City. The revenue significantly fluctuates year-to-year, and is challenging to forecast, due to the timing of the projects and when those reimbursements will be received. For example, the 2011 reimbursement was budgeted at $21,000 but the City received $171,000 and the 2010 reimbursement was budgeted at $20,000 although the City received $147,000.
Q: The Commission requested additional information on the utilization of downtown parking inventory.
A: Staff is developing a report to provide an analysis on the utilization of downtown parking lots and recommendations that may result in shifting parking activity to currently underutilized long-term spaces.
Q: Commissioner Boley requested information about the cost to operate Sports Pavilion Lawrence (SPL).
A: In response to Commissioner Boley’s request, Parks and Recreation provided the attached report detailing the cost to operate the SPL facility and staff events and tournaments. Additionally, Finance provided the attached financial statement that details the revenues and expenditures related to management of SPL.
Q: Commissioners asked about the impact on local sales tax collections resulting from the sales tax increase recently enacted by the State of Kansas.
A: Staff will monitor the future impact of the State’s sales tax increase on the City’s collections and will report on any changes resulting from the State increase.
The 2015 change to the Kansas retailers’ sales tax rate is the sixth change since the tax was enacted in 1937. The most recent sales tax rates are reported below.
|
Year |
Kansas Sales Tax Rate |
|
1992 |
4.90% |
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2002 |
5.30% |
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2010 |
6.30% |
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2013 |
6.15% |
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2015 |
6.50% |
Over time, the City’s sales tax collections have grown at a steady pace. The most significant downward trend in collections was recorded between 2009 and 2011, resulting from the Great Recession. The State raised its sales tax rate from 5.30% to 6.30% in 2010.
Prior to 2009, the City collected a 1.0% retailers’ sales tax. In 2009, that rate was increased to 1.55% by voters in a general election. The City’s sales tax collections by industry, which demonstrates the mix of sales tax generating industries in the city, are depicted in the attached graph. More information on the City’s sales tax is provided on the City’s Sales Tax webpage.
The following graph depicts the collection trend in the City’s 1.0% city retailers’ sales tax since 2000.
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Q: Commissioner Boley requested details about the City’s expenses incurred in the Guest Tax Reserve Fund to support special events for 2014 and 2015 year-to-date.
A: At the May 19, 2015 City Commission study session, the Commissioner received the attached report on activities in the Guest Tax Fund and Guest Tax Reserve Fund. This report prompted a question about the City’s costs incurred for special events. The following table details the $135,688 incurred in the Guest Tax Reserve Fund for 2014 special events.
The City’s costs for supporting special events are primarily limited to staffing and some public works equipment. Fire Medical and Police incur staff costs (overtime) to staff events. Public Works incurs staff costs in preparation and cleanup for events, as well as some staffing during events when needed. Materials and supplies costs are also incurred by Public Works in support of events. For example, the barricades and sand for the downtown shot put event are reflected in the costs below. The City Manager’s Office incurs costs related to special events through the Communication’s Office. Communications promotes, advertises and supports special events and the personnel costs below reflect a portion of the work/responsibilities performed by the Communications Director and communications interns.
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2014 Special Event Expenditures Recorded in the Guest Tax Reserve Fund (207) |
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|
Department |
Expenditure Category |
2014 Actual Expenditures |
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Fire Medical |
Overtime Salaries |
18,686.00 |
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Police |
Overtime Salaries |
60,215.00 |
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PW Street Maintenance |
Overtime Salaries |
8,028.00 |
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City Manager's Office |
Regular Salaries |
20,000.00 |
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City Manager's Office |
Part-time Salaries |
18,000.00 |
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PW Street Maintenance |
Motor Vehicle Supplies |
8,670.00 |
|
PW Street Maintenance |
Construction Materials / Sand |
2,089.00 |
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Total |
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$135,688.00 |
Q: Commissioners requested information on the number of Lawrence Transit bus passes provided to social service agencies.
A: The City Manager’s 2016 Recommended Budget includes requests from two external agencies for funding to purchase bus passes. The passes are purchased for $1.00, which results in a one-to-one match of a bus pass purchased for every dollar allocated. The following table details those requests.
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Willow Domestic Violence Center |
Lawrence Community Shelter |
|
2015 Budget allocation |
$4,000 |
$15,600 |
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2016 Recommended budget allocation |
$3,640 |
$15,600 |
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Number of bus passes to be purchased in 2016 |
3,640 |
15,600 |
|
Fund |
General |
Public Transportation |
Requests from two additional agencies included funding for transportation services, but not specifically for bus passes. Those requests are detailed in the following table.
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Community Village Lawrence (application) |
Douglas County Senior Services (application) |
|
2015 allocation |
$0 |
$0 |
|
2016 Recommended budget allocation |
$2,665 |
$36,800 |
|
Fund |
General |
General |
|
Brief description of request |
Senior transportation coordination through existing transportation agencies and volunteer drivers |
Senior Wheels provides door-to-door transportation service for riders age 60 or older |
Lawrence Transit provides free fare rides and bus passes through multiple partnerships and programs. Those opportunities are detailed in the attached memorandum. Transit’s Contribution of Alternative Fares policy is also attached to this memo. The policy provides the standards for the Department to fairly respond to requests from outside agencies for alternative transit fares.
Q: Commissioners requested information about the tax lid in the context of the 2016 budget.
A: Staff is developing a response to this request and will provide it in a subsequent update to this memo.
Q: Mayor Farmer asked for a comparison of the 2016 baseline budget to the 2016 Recommended Budget.
A: Staff is working on this comparison and will provide the information in the next update to this memo.