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:	7/30/15 – Revised 08/04/15
RE:	2016 Budget – Public Hearing

Background

Per action taken at the July 21, 2015 City Commission meeting, notice of a public hearing to be conducted on August 4, 2015 was published on July 24, 2015 in the Lawrence Journal World. The purpose of the hearing is to answer and hear questions of taxpayers relating to the 2016 proposed budget. The publication of the notice of budget hearing and the accompanying budget summary establish the maximum limits of the 2016 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.

2016 Proposed Budget

The maximum expenditure level for the 2016 Budget as established by the City Commission is $206,720,019. No increase in the mill levy rate is recommended.

The changes below were made to the 2016 recommended budget in response to direction provided by the Commission at the study sessions on July 7 and July 14:

General Operating Fund

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

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

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

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

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

o 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;

o 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;

o 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;

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

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

· 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

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.

Special Alcohol Fund

While the expenditure total from this fund remains unchanged from the original recommended budget for 2016, the following adjustments were made:

· $350,000 for Bert Nash for the WRAP program was moved to this fund from the General Operating Fund

· $297,000 for three school resources officers were moved from this fund into the General Operating Fund

· Future Projects was reduced from $130,000 to $77,085.

Enterprise Fund Rate Ordinances

The 2016 Budget assumes increases in the rates customers pay for city water and sewer services. No changes to the rates for solid waste service are assumed for 2016. 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.

As outlined in the attached memo, the rates for water service and sanitary service recommended for 2016 and 2017 were developed within the previously identified framework of “total additional costs” over the current five-year Capital Improvement Plan.

Commissioner Question Follow Up

The attached memo contains additional answers to questions from Commissioners related to the 2016 Budget.

Budget Calendar

The remaining dates related to adoption of the 2016 budget are shown below.

Tuesday, August 11	Budget ordinance second reading
Wednesday, August 12	Budget ordinances and notice of vote sent to LJW for publication
Tuesday, August 25	Deadline to file budget with County Clerk

Action Requested

Staff requests the City Commission conduct the public hearing regarding the 2016 Budget and consider the following items related to the adoption of the 2016 Budget:

· Adopt on first reading, Ordinance No. 9146, approving and appropriating the 2016 City of Lawrence Operating and Capital Improvement Budget, if appropriate; and.

· Adopt on first reading, Ordinance No. 9122, establishing a two-year schedule for 2016 and 2017 water and wastewater service rates, effective November 15, 2015 and November 15, 2016, respectively.