Memorandum

City of Lawrence

City Manager’s Office

 

TO:

Dave Corliss, City Manager

 

FROM:

Cynthia Boecker, Assistant City Manager

 

CC:

Diane Stoddard, Assistant City Manager

Ed Mullins, Finance Director

Casey Toomay, Budget Manager

 

DATE:

January 15, 2008

 

RE:

2009 Budget Background Parameters

 

 

As outlined in initial 2008 budget development discussions, our goals in budget preparation are to ensure that the process is transparent, accessible, and understandable to the City Commission and the public.    A successful budget is well calibrated to reflect the goals of the City Commission.  Recommended goals as we begin preparation of the 2009 budget are consistent with 2008 goals: 

  • make strong progress in ensuring that revenues and expenditures are balanced;
  • make significant progress in responding to infrastructure, facility and equipment needs;
  • understand that progress on economic development is necessary; and
  • communicate to the community that as the City’s financial condition improves – based on progress on these earlier items – additional program improvements and enhancements can be undertaken.  

 

Final but un-audited revenue and expenditure estimates will not be available until late February to allow for year-end accrual of revenues and expenditures as outlined by government accounting standards.  Based on City Commission mid-year direction, 2007 expenditures were reduced by $3 million from approved budget levels.  As a result, general fund balance at 2007 year-end is estimated to be approximately $10.8 million, or approximately 20% of expenditures.  This is the level projected in development of the 2008 budget. 

 

Over the coming weeks, staff will revise revenue projections and will have additional information to present to the City Commission regarding 2009 budget issues and 2008 budget monitoring activities.

 

Staff has prepared a list of issues as we begin development of the 2009 budget.

 

  • Balancing revenues and expenditures continues to be a challenge. 
  • Fund balance is projected to be at 15% at end of 2008. 
  • Slowing sales tax growth.
  • Slowing assessed valuation growth.
  • Employee compensation and healthcare costs. (See attached memo relating to potential employee compensation changes.)
  • Memorandum of Understanding negotiations with police and fire employee groups.
  • Continuing increases in cost of transit system.
  • Impact of delayed equipment replacement and staffing.
  • Funding to outside agencies.
  • Potential for privatization of city services
  • City/County/School District Funding (SRO’s, crossing guards, health department, dispatch).

 

Action Requested

This memo is presented for City Commission information and discussion.  As directed over the coming month additional detail will be provided on these issues for City Commission review.  A draft budget calendar is attached.