Memorandum

City of Lawrence

City Manager’s Office

 

TO:

Diane Stoddard, Interim City Manager

CC:

Brandon McGuire, Assistant to the City Manager

FROM:

Casey Toomay, Assistant City Manager

DATE:

July 16, 2015

RE:

2016 Budget hearing

 

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 2016 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.

 

2016 Notice of Budget Hearing

The attached notice sets the public hearing for August 4, 2015 and establishes a maximum expenditure level for 2016 of $206,720,019.  No increase in the mill levy is recommended.

 

While the recommended budget includes expenditures for City utilities, it does not establish utility rates. The City Commission will consider adopting an ordinance setting the rates for the Water and Wastewater utility for 2016 and 2017 on August 4, 2015.  No changes are recommended for the solid waste rates for 2016 so no ordinance will be necessary.  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 $206,720,019 is $585,085 less than the 2016 Recommended Budget.  The changes below were made in response to direction provided by the Commission at the study sessions on July 7 and July 14:

 

·         General Operating Fund

o   General Fund revenues were reduced by $671,045:

§  Property tax revenues were reduced by $921,045 as a result of not increasing the mill levy rate as was initially recommended;

§  Licenses and permits revenues were increased $250,000 to better reflect the expanded rental registration program. 

o   Total General Fund expenditures were reduced by $585,085:

§  The Planning budget was reduced by $25,000.  These funds were budgeted for various studies in 2016;

§  The General Overhead budget was reduced by $428,670 due to moving funding for the WRAP program to the Special Alcohol Fund, adjusting the unemployment rate used in payroll projections; and providing additional funding for the Douglas County Dental Clinic;

§  The transfer to the Sales Tax Reserve Fund was reduced by $150,000, the amount of the debt service for Sports Pavilion Lawrence that will be paid from the Guest Tax Fund beginning in 2016;

§  The Police Department overtime budget was decreased but the cost of three school resource officers was added back to the General Fund.  The net result was an increase to the Police Department budget of $108,585;

§  The Fire Medical budget was reduced by $4,000; and

§  The Street Maintenance Division budget for road salt was reduced by $86,000.

o   The GIS Analyst Position in Information Technology as well as the Administrative Support position for the Prosecutor’s Office originally recommended for 2016 remain in the revised recommended budget. 

·         Guest Tax Fund

o   While the total expenditures budgeted for 2016 was not changed from the recommended budget, the following changes were made:

§  $150,000 will be used to pay for approximately 1% of the debt service payment for Sports Pavilion Lawrence;

§  Destination Management Inc. will receive an additional $30,000; and

§  Downtown Lawrence Inc. will receive an additional $6,500.

 

2016 General Fund Summary

As shown in the 2016 projected column on the attached fund summary, General Fund expenditures (excluding future projects) exceed revenues by $894,378.  However, we will continue to monitor expenditures and balance the budget at the end of 2016.

 

Action Item

Staff requests the City Commission authorize publication of the notice of budget hearing establishing the maximum expenditure level for the 2016 budget and setting the public hearing date for August 4, 2015.