Memorandum                    

City of Lawrence

City Manager’s Office

TO:	City Commission
FROM:	Diane Stoddard, Interim City Manager
DATE: CC:	July 9, 2015 Casey Toomay, Assistant City Manager Bryan Kidney, Director of Finance
RE:	Follow Information re the Lawrence Community Shelter Emergency Funding Request

At the July 7, 2015 City Commission meeting, the Commission requested that staff prepare options for funding the emergency assistance requested by the Lawrence Community Shelter (LCS).  Specifically, staff was requested to prepare options relating to a $50,000 and a $100,000 emergency funding request.  LCS staff were to prepare an operating projection based upon a $50,000 emergency funding infusion.  The City Commission already received the LCS operating projections based upon a $0 and a $100,000 funding infusion.

County Funding Decision:

Craig Weinaug, Douglas County Administrator, has informed me that the Douglas County Commission approved on July 8, a $50,000 infusion now for LCS, but did not add additional funds to the budget for 2016.  County funding was also conditioned on some funding from the City.  Additionally, staff understands that Mr. Weinaug will be joining the LCS board in an ex-officio capacity in order to provide some financial management expertise.

Funding Options for City:

Staff believes that there are a few options for funding an emergency un-budgeted infusion to the agency of either $50,000 or $100,000 in 2015: 

· General Fund

· Special Alcohol Fund

· Housing Trust Fund

The above funding sources could be used either singly or in combination.  If the City Commission wishes to fund the emergency request, staff suggests one-time funding in the amount of $50,000 from the Special Alcohol Fund.  The City Commission had also suggested the amount be contingent on a match amount from private sources.  It should also be noted that the $50,000 emergency infusion is essentially a one-time funding option for the Special Alcohol Fund and reduces the balance in that fund to approximately $130,000.  Ongoing expenses would not be sustainable and staff does not believe that reducing the fund balance in this fund further would be wise.  The funding source for the Special Alcohol Fund is the local share of liquor tax, which may be a vulnerable revenue in the future should the State of Kansas look at that source of funds as a revenue source for the State budget, as was proposed several years ago. The 2016 recommended budget includes a flat amount of funding for LCS for 2016.  Staff does not recommend adding any additional funding for 2016 in order to monitor the financial status of the agency. 

Cash balance in both the General Fund and the Housing Trust Fund could also be utilized as funding sources. Staff understands that the City Commission was interested in funding an affordable housing pilot from the Housing Trust Fund, which is why that source was not recommended.  There is slightly more than a $100,000 in that fund.  Staff recommends that the General Fund not be the funding source in order to protect fund balance in that fund, which directly relates to our bond rating.