Memorandum

City of Lawrence

City Manager’s Office

DATE:	5/30/2013
TO:	David L. Corliss, City Manager
FROM:	Casey Toomay, Budget Manager
CC:	Cynthia Wagner, Assistant City Manager Diane Stoddard, Assistant City Manager Jonathan Douglass, Assistant to the City Manager / City Clerk
RE:	Legislative Impacts on 2014 Budget

A summary of state and federal legislation that may impact the city’s budget is provided below. 

Federal Legislation

The most significant federal legislation is the Patient Protection and Affordable Care Act (PPACA.)  The attached memo outlines the changes that will result in an increase to the City’s healthcare plan of $137,200 beginning in 2014. 

State Legislation

The state legislature hasn’t concluded for the year, however, there are several bills that have already been adopted that have potential cost impact on the City budget.

· Firearms in Public Buildings.  As outlined in the attached memo, this legislation allows those with concealed carry permits to carry their firearms into public building unless the building have adequate security at the building to ensure no weapons are allowed into the building.  2014 Potential Cost: Between $48,000 and $76,000 per city facility.

· Unemployment.  This legislation changes the contribution rates for unemployment insurance.  Currently, unemployment taxes are based on the first $8,000 of employee’s wages.  Starting in 2015, taxes will be based on the first $12,000, in 2016 it will be the first $14,000.  2014 Potential Cost: None.  2015 Cost: Being determined. 

· KPERS.  Benefit Election for Tier 1 employees continues to await approval from the IRS.  Without that approval, this legislation increases Tier 1 employee’s contributions to the Kansas Public Employers Retirement System (KPERS) from 4% in 2013 to 5% in 2014 and then 6% in 2015.  The Statutory cap on employer contributions is increased as well.  In 2014 it will increase from 0.6% to 0.9%, then in 2015, the increase will be capped at 1.00%.  The legislation also decreases participating employers’ contribution rate to 0.85 percent from July 1, 2013, to June 30, 2015.The rate will return to 1.0 percent on July 1, 2015, for the Death and Long Term Disability Benefits Plan administered. 

· KP&F.  This legislation changes all employee contributions to the Kansas Police and Firemen's Retirement System (KP&F) from 7.0% to 7.15%.  It also allows members of KP&F to retire with 90 percent of their average ending salary if they reach 36 years of service.  Currently, members retire with a maximum of 80 percent of their average ending salary when they reach 32 years of service.

·  Other Collateral Impacts.  There is other state legislation that may have collateral impacts on the City.  For example, the Health Department is requesting an increase in City funding due to a reduction in state funding for HIV and STD testing.  The Lawrence Children’s Choir is requesting City funding due to reduced state funding for the arts.  The state sales tax rate was scheduled to be reduced in 2013, however, negotiations are still underway.  While the state receives the proceeds from that sales tax, it impacts the total sales tax rate paid in Lawrence.