MEMORANDUM

To:     Mike Wildgen

          City Manager

From: Debbie Van Saun

          Asst. City Manager

Re:     Outside Agency Review Process

February 3, 2004

Background information.

In recent years, the City Commission has met with each non-alcohol fund applicant early in the budget process, providing an opportunity to ask questions and learn more about the organization’s activities and proposed uses for the City funds, should they be approved.  The City currently relies on the Special Alcohol Fund Advisory Board to receive and review applications for alcohol tax funding, and then receives recommendations from this Board regarding grant awards.   

During last year’s budget process, the City Commission indicated an interest in developing an alternative method for processing/reviewing the various funding requests from outside contractual agencies.  Staff has taken the comments from last year and developed this report for further consideration by the Commission prior to the establishment of their budget calendar for 2005.

Survey of other cities.

As we contacted other cities in the area about this topic, it became clear that this is an issue that other communities have struggled with recently.  Economic conditions have challenged the amount of city funding available for social services.  Additionally, the reduction of funding sources for non-profit organizations is a reflection of the economic conditions.  Thus, these organizations are turning to cities and counties to fill the gap.  Competition has increased for these communities, as it has in Lawrence, for the available funding.

The following represents a review of current practices from various cities in dealing with this process:

Topeka, Kansas – an advisory committee made up of city employees and citizens makes recommendations to the city council on which non-city organizations should get funding and how much.  In the 2004 budget, this amounted to $1.2 million in general fund dollars.

Mission, Kansas - upon the receipt of funding requests from various agencies, the City of Mission attempts to figure out how to fund at these requested levels.  It was noted that the City of Mission is in the process of reviewing their options.  One suggestion is to have a set amount of money put in a “pool” for outside agency funding and then divide this money as appropriate. 

Garden City, Kansas - sets aside funds for non-affiliated agencies and determines the distribution of those funds through a competitive community grant process.  Mr. Allen added that Garden City has an advisory board, which makes recommendations on the disbursement of Alcohol Liquor Funds.  The advisory board uses a competitive grant process too, and makes recommendations to the City Commission on how the funds should be disbursed.

Manhattan, Kansas - a Social Services Advisory Board provides recommendations on social services funding.  In dealing with non-social service funding, the City Commission makes a case-by-case decision during the budget process.

Hesston, Kansas - funds non-city organizations through a Community Service Grant Fund, which amounts to approximately $25,000 a year.  A Community Service Advisory Board assists the governing body by screening and interviewing applicants, along with making recommendations to the governing body on allocating these funds.

Longmont, Colorado – the Human Relations Commission coordinates the outside agency funding process, making annual recommendations to the City Council for agencies selected to receive City funding.  Longmont allocates a certain percentage (1.35% for 2004) of their General Fund budget on an annual basis.  This equated to about $670,000 of available funding for this year.  An extensive application process, with funding targets, eligibility requirements, etc. is in place. 

Options to consider.

It might be helpful to separate the list of organizations into two types.  Discretionary organizations would be those that offer services not traditionally provided by a municipality.  Non-discretionary organizations are those that provide services (such as animal control/shelter, public health, library, facility upkeep/operation, etc.) that are shared with the County or are traditional municipal-related services. 

Discretionary Organizations- GF	Non-discretionary Organizations-GF
Jayhawk Area Agency on Aging	Humane Society
The Shelter	Health Dept.
Warm Hearts	Economic Development
CASA	Legal Aid
WTCS	Community Service
Visitation Center	Arts Center (facility operations)
HCCI	Library
Ballard Center
Partnership for Children/Youth
Salvation Army
Downtown Lawrence
Health Care Access
Boys & Girls Club
Discretionary Organizations-Spec Rec	Non-discretionary Organizations-Spec Rec
Arts Center (programs)
Arts Commission
City Band
Discretionary Organizations-Guest Tax	Non-discretionary Organizations-Guest Tax
Convention Visitor’s Bureau (91.9%)
Sister Cities (1.6%)
Visit 2020 Reserve Fund (6.5%)

Assuming that some distinction would be made between the two types of organizations, the following is a list of options that could be considered:

• Assign staff to review the non-discretionary agency requests and make recommendations to the City Commission.

• Establish a committee to review discretionary applications; can include City Commissioner(s), City staff, members of the public (similar to United Way board).  Committee could meet with agencies, if desired, and would make recommendations to the City Commission;

• Establish a percentage or range of funding limits, similar to the limits within which the Special Alcohol Advisory Board works.

• Set some eligibility guidelines for agencies to meet to apply for funds.  For example, should all organizations be non-profit corporations, have a 501c3 designation, serve target populations, etc.?

• Set some evaluation criteria for application review.  For example, other cities have indicated that funding is reserved for specific human service areas and proposals must fall within one of these areas in order to be considered (health care, strengthening children/youth/families, crisis intervention, etc.).

• Provide a more formal mechanism for review of grant compliance (to become part of evaluation process).  Currently, limited staff time is available for compliance assurance.

In summary, it appears that the committee approach is one that other communities are using and one which might be helpful to the City Commission in their consideration of this component of the budget process.