July 24, 2007

The Board of Commissioners of the City of Lawrence met in regular session at 6:35 p.m., in the City Commission Chambers in City Hall with Mayor Hack presiding and members Amyx, Dever, Chestnut and Highberger present.

RECOGNITION/PROCLAMATION/PRESENTATION:

With Commission approval Mayor Hack proclaimed August 1, 2007, as “Scouting Sunrise Day”; and, August 1 – 7, 2007 as “Breastfeeding Awareness Week.”

CONSENT AGENDA

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve the City Commission meeting minutes of July 10, 2007 and July 17, 2007.  Motion carried unanimously.

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger,  to receive the Uniform Building Code Board of Appeals meeting minutes of June 14, 2007; the Mechanical Code Board of Appeals meeting minutes of June 27, 2007; the Board of Zoning Appeals meeting minutes of June 7, 2007; the Planning Commission meeting minutes of May 21-23, 2007; the Aviation Advisory Board meeting minutes of February 22, 2007; the Sister Cities Advisory Board meeting minutes of May 9, 2007; the Lawrence Arts Commission meeting minutes of May 16, 2007 and June 13, 2007; the Public Transit Advisory Committee meeting minutes of March 15, 2007, April 10, 2007 and May 15, 2007; and the Transit Public Hearing meeting minutes of April 11, 2007.  Motion carried unanimously.

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve claims to 643 vendors in the amount of $2,395,583.78 and payroll from July 8, 2007 to July 21, 2007, in the amount of $1,754,685.23.  Motion carried unanimously.

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve the Drinking Establishment License for La Parrilla, 814 Massachusetts Street; Zen Zero, 811 Massachusetts Street; Henry T’s Bar & Grill, 3520 West 6^th Street; and the Retail Liquor License to Spirit Liquor, 600 Lawrence Avenue, Suite A & B.  Motion carried unanimously.

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize payment to P.H.I. Investigative Consultants, Inc., for $26,481.27, for fees and expenses for hosting the Practical Homicide Investigation Seminar.  Motion carried unanimously.                                                                                                                                        (1)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve purchase of three (3) Trimble GPS data collectors and an upgrade of the existing Trimble reference station for the Utilities Department, from Seiler Instrument, at the state contract price for $71,355.  Motion carried unanimously.                                                                   (2)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve purchase order to Software House International for $42,702 to continue the City’s Select Agreement for Microsoft software maintenance for the period from July 1, 2007 to June 30, 2008.  Motion carried unanimously.                                                                                  (3)

Ordinance No. 7923, (Z-04-28-05) rezoning Glenwood Addition, 12.465 acres from UR (Urban Reserve) District to RM12 (Multi-Dwelling Residential) District, located at the SE corner of Wakarusa Drive and Eisenhower Drive, was read a second time.  As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to adopt the ordinance.  Aye:  Amyx, Chestnut, Dever, Hack, and Highberger.  Nay: None.  Motion carried unanimously.      (4)

 As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to adopt Resolution No. 6730, setting a public hearing date of August 28, 2007 for intersection improvements at 6^th Street and George Williams Way. Motion carried unanimously.            (5)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to request approval from the City Commission to enter into negotiations for an Engineering Contract with BG Consultants for the design of George Williams Way from 6^th Street to Overland Drive and George Williams Way from Overland Drive to the N. City Limit, including water main. Motion carried unanimously.                                                                                                    (6)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize the Mayor to sign a maintenance agreement for the beacon system on 23^rd Street at East Hills Drive. Motion carried unanimously.                                                                     (7)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize the Mayor to sign Letter of Agreement with KDOT for consolidation of accesses between CVS Pharmacy and El Mezcal restaurant located just east of the intersection of 23^rd and Iowa Street.  Motion carried unanimously.                                                                           (8)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to approve request for variance from Section 19-214 of the City Code regarding a fire line and water main connection at CVS Pharmacy site, 23^rd and Iowa.  Motion carried unanimously.    (9)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize the Mayor to sign a Release of Mortgage for Darlene Barreto, 218 Alabama and a Subordination Agreement for Jeanette Reiling, 1064 Home Circle.   Nay: None.  Motion carried unanimously.                                                                                                                                     (10)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize the Mayor to sign proposed new amendment to the Sister Cities Advisory Board bylaws.  Motion carried unanimously.                                                                                         (11)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to authorize the purchase of required property interests from Christine Collister for the construction of Stoneridge Drive, south of West 6^th Street, for $26,000.  Motion carried unanimously.                                                                                                                               (12)

As part of the consent agenda, it was moved by Chestnut, seconded by Highberger, to concur with the recommendation of the Mayor and appoint May Davis, KU on Wheels Representative, to the Public Transit Advisory Committee, to a term which will expire December 31, 2007.  Motion carried unanimously.                                                                             (13)

CITY MANAGER’S REPORT:

During the City Manager’s Report, David Corliss said the City was welcoming the Hiratsuka delegation to Lawrence; repairs were completed for the public walkway on the east side of the 800 block of Massachusetts; and, the Public Works Department made repairs to the intersection of 11^th and Haskell near the railroad crossing. 

Also, during the City Manager’s Report, Chuck Soules, Public Works Director, said the downtown waterline project was completed.  He said as part of the downtown waterline project, brick crosswalks were being replaced because of the annual maintenance.  However, there were issues with the crosswalks and the contractor agreed to replace those problem areas.  He said next year the mill and overlay was planned and staff would work with the contractor, at that time, in repairing those crosswalks.  He said repairs were attempted at the 9^th Street crosswalk, south, but there was a defect in the contractors work and the contractor would make those repairs right.

Corliss said staff thought the work downtown was completed.  Next year, during the mill and overlay project, scheduled for the end of June or early part of July, the current contractor would make repairs to those crosswalks.            

REGULAR AGENDA ITEMS: 

Conduct public hearing on the Edward Byrne Memorial Justice Assistance Grant application by the Lawrence Kansas Police Department.

Mayor Hack called a public hearing on the Edward Byrne Memorial Justice Assistance Grant application by the Lawrence Kansas Police Department.

David Corliss, City Manager, said this was a Federal Grant the Police Department was successful in applying for in the past.  A public hearing was required for the use of those funds which was detailed in staff’s memo.

Captain Dan Affalter, Lawrence Police Department, said this was a funding opportunity for enhancing forensic capabilities which was very expensive.      

Commissioner Highberger asked if there was any City match required to receive this grant.

Affalter said no.  He said the requested funding was a one time expenditure. 

Mayor Hack said informing the City Commission that this funding would be a one time expenditure was a good point because it would not hold the City accountable for future expenses.  

Affalter said this grant would be a partnership with the Lawrence Police Department and the Douglas County Sheriff’s Department. 

Mayor Hack called for public comment.

Upon receiving no public comment, it was moved by Amyx, seconded by Chestnut, to close the public hearing.  Motion carried unanimously.                                                           

Moved by Amyx, seconded by Chestnut, to authorize the Police Department to submit the grant application.  Motion carried unanimously.                                                                        (15)

Receive request from Thomas Fritzel concerning downtown redevelopment opportunities.  Receive staff report concerning procedures for review of City participation in downtown redevelopment opportunities.

David Corliss, City Manager, presented the staff report.  He said Fritzel’s request was to acquire 8 public parking spaces behind 123 West 8^th building and also Fritzel had a general interest in downtown redevelopment opportunities.  He said the request had received approval from the Historic Resources Commission with certain conditions along with the site plan which was something that was administratively approved that had a number of conditions, including some type of agreement between the City and the applicant regarding the parking spaces.

Bob Schulte, Gene Fritzel Construction Co. Inc., said they had been working with their own money from the private sector to bring more businesses and people to the downtown area for more than 20 years.  Most recently, they purchased the Eldridge Hotel and the building at 201 West 8^th Street which was called Eldridge Extended.  They had extensively remodeled both of those buildings to help with the goal of getting more people to downtown Lawrence.  Now, they wanted to remodel the building at 123 West 8^th.  They saw a need for additional class “A” office space in the downtown area and believed that with some improvements, that building was perfectly suited for that purpose. The building needed additional means of egress and an elevator for ADA Compliance in which they employed an architect to help with that challenge.  The architect proposed stairs and an elevator tower at the southwest corner of the building and in addition to the south side of the building to help integrate the stairs and elevator into the design.  The addition, which had been approved by the Historic Resources Commission, lapped out into the 8 parking spaces immediately adjacent to the buildings south side.  Those parking spaces were City property which was the reason they were at the Commission meeting.

He said the request to the City Commission was to allow them to use those parking spaces for that purpose and would certainly need those 8 parking spaces during the construction and renovation of the building, but it was possible that 5 of those 8 spaces could be returned to the City parking inventory and they would have a better idea through a discussion with the City.  In a memorandum the City Manager had proposed for City Commission consideration a mechanism to allow that to happen and they wanted to urge the City Commission to direct staff to prepare an agreement as had been proposed.

Commissioner Highberger asked if the proposed use was all office space.

Schulte said yes. 

Commissioner Chestnut asked about the current status of tenants and what was the occupancy rate.

A member of the public said it was office space and the occupancy rate was full.

Commissioner Chestnut asked about the $25,000 and if the parking spaces were returned, part of that money would be returned.

Corliss said yes.  He said requests for downtown parking spaces were made quite often for any type of renovation or reconstruction.  He said staff needed to be sure the City’s liability concerns were protected and the City charged a modest fee for that Use of Right-of-Way for that construction.  He said the key to this request was permanent acquisition. 

Vice Mayor Dever asked Schulte to elaborate on the increased square footage that would be added for the tenants of that building. 

Tim Homburg, Nearing, Staats, Prelogar & Jones Architects, said the addition would encompass aligning with the elevated first floor, second floor, and adding in the range of approximately 56,000 square feet of tenant space.

Commissioner Amyx said a determination would be made after the construction as to whether or not those spaces would be returned.  He asked what factors would be used to determine whether to keep or return those five spaces.

Schulte said the way the building is designed there were masonry columns at that back that supported the structure above.  He said it would be up to the City whether or not they felt it was an appropriate type of public parking space.  He said there was a chance that someone backing out could scrape one of those columns and it might be a liability issue for the City if those were public parking spaces, but if those were private parking spaces it would not be a liability to the City.  He said that issue could be discussed or could be part of the agreement in some way.  If the City did not feel it was appropriate for that type of parking space to be a public parking space, then they could use the spaces privately.

Homburg said when the plan was originally submitted to the Historic Resources Commission, those spaces were public parking, and then they were averted to the Architectural Design Committee which pointed in the direction of privatizing those spaces because of people backing out of those covered parking spaces, creating issues with parking.  He said by privatizing those spaces, those spaces would be leased by the tenants of the building.    

Commissioner Amyx said the City parking lot containing those spaces was paid for in part by the adjacent property owners as a benefit district and he asked if there was a statutory authority requirement on how the City must proceed with the use of that right-of-way in benefit district type situations.   

Corliss said there were no statutory provisions that directly spoke to that issue of having a public improvement created by a benefit district and then having some alteration to that public improvement some time in the future.  He said in this case part of the alteration was losing those parking spaces.  He said he was not aware of any precedent in Kansas as far as the special assessment law and he was not able to find case law in other jurisdictions.  It was not uncommon for the City to alter parking spaces.  This request was blunter in a sense there were a certain number of parking spaces that were constructed and might have changed over time.  He said this was different in that it was not the public changing those spaces, but the public transferring ownership of certain spaces.  That was why staff was trying to identify that this issue was not only a practical issue for this development, but also a significant policy issue for the City Commission as to how to look at those requests and respond.  He said if the City was going to follow that path with this situation or other situation, the City was making a commitment they would be replacing those parking spaces.  It was very difficult to replace 8 parking space increments, but would likely happen with a much larger number and the investment was likely to be much larger as well.  He said the City would be getting at the issue of eventually more parking in this part of downtown at some time in the future. 

Commissioner Amyx said when looking at the design of that particular parking lot, there was a south entrance/exit and a roadway that came off of Vermont Street that cut through and asked if that roadway could be redesigned with the money from those parking spaces the City would lose.

Corliss said that idea was a possibility.  He said one thing that was ancillary to this issue was the Carnegie Library renovation which was unfortunately moving at a slower pace because of some historic review processes.  When that building was renovated, public parking spaces would be taken immediately north of the existing Carnegie Library for that addition to provide a different access point.  He said it was very important the City paid attention to the parking needs in that area.  He said Commissioner Amyx made a good suggestion as far a looking at the existing parking lot to see if the parking lot could be better configured for additional parking spaces.   

Schulte said it appeared it was a goal of the community to want to improve the downtown and reenergize the downtown.  He said not only was parking a premium, but spaces for projects was at a premium.  In order for the downtown to reach its potential, they might need to seek creative ways to use the space that was downtown because they could not always go out, but up and over.

Commissioner Highberger said the zoning in that area was called CD-3 zoning and asked if there was no parking requirement. 

Sheila Stogsdill, Assistant Director, said correct.

Bob Shumm, downtown property owner, said the Fritzel’s had done a great job downtown with projects like the 600 Block Redevelopment.   The Eldridge Hotel and the Eldridge House Extended was completed and was magnificent.  He said he believed those developers were trying to continue to do good for the downtown area, however, this was a unique project in that this parking lot was paid by, half of the revenue generated by the parking revenue meter system and half by the adjacent property owners of which he was a property owner.  He said the request sounded reasonable, but the Commission needed to discuss some very strict rules for requests like this in the future.  He said one of the questions that needed to be asked was, “Did the request produce a greater good for the public than its current use?”  He said in this case, that area was a very valuable use to the public and to take it from that stage to another stage would certainly need to produce a greater good for the public, not the developer.

Secondly, he thought the City should require the costs of what it would cost to build a parking space, plus twenty-five percent to be placed in an earmarked account and if the developer did produce the extra spaces promised, the developer would get a rebate on the money, if not, the City had the money to go ahead and add to some other project to build that many new spaces.  He said the reason why he stated twenty-five percent was because construction inflation was approximately five percent a year and if waiting for five years, there would be a twenty-five percent increase more or less, but the developer had the opportunity to regain that money if the developer completed their promises. 

He said this development had to be at all stages, a very public, open process.  There were too many people involved in downtown for it not to be an open process.  People had vested ownerships in either their businesses or property.  There were people who had social interests through churches, clubs, or organizations and citizens at-large who enjoyed being part of Lawrence because of its downtown.  Each public process should encourage different people to participate to give their views and the City Commission should weigh what those people had to say to come up with the best possible solution.  He said he hoped his remarks allowed the City Commission to carry on a diligent discussion and produce a policy that would work for everyone.  He said he could see this request would open the door for other requests to use parking space and those spaces were a very valuable commodity downtown, especially at the north end.

Tom Wilcox, owner of Round Corner Drugs on the corner of 8^th and Massachusetts Street, said he had been in business for 21 years and downtown was a wonderful place to do business.  He said it was also exciting to see new development, but it was also a very difficult place to do business when competition had drive-up windows and a lot of parking.  He said it was difficult for those who had the smaller parking areas to compete.  The same argument could be made that those new developments were bringing new things to downtown Lawrence, but could also be forcing some people out of downtown with the high taxes paid on those older buildings along with the lack of proper parking downtown.

He said he often thought that outside of his business, because most of his customers were older, they should have a 15 minute parking spot for cars to get in and out.  He said if this request went through, he said he would be back requesting parking for himself.  He said taking 8 close parking spaces near his business was going to affect the outcome of his business.    

Dennis Brown, Lawrence, said he noticed in a project that this particular developer was working on in the Oread area near the Hancock Historic District, they had been very transparent with the neighbors in that area.  He said the developer worked well in getting the neighbors’ design ideas and input early on in the process, but it did not happen with this particular downtown development.  He said a lot of the neighbors at Standard Mutual Life were really unaware of what was going on until the proposed project already went through one HRC meeting.  He said he hoped what was going on in Oread would be the process that developer took as he did other projects, particularly in the downtown area.  He said he also agreed with Shumm’s statement that he certainly would not want to say anything negative about the quality of work the Fritzel Company did, but as that company approached more projects in the downtown area, in or near the historic districts, they might want to consider hiring on a professional preservation consultant to help ease process. 

The Standard Mutual Life Building was listed as a key contributing structure downtown, in the Downtown Historic District.  This meant they were to pay close attention to any proposal affecting the primary facades on the building’s exterior, in this case, the north or front elevation and the west elevation.  The east elevation would be primary on that structure as well, but it was so close to adjacent building there was really no line of sight below the roof line. 

He said this request that came before the City Commission struck him as a proposal that was essentially a house of cards, built on the premise the City would vacate eight public parking spaces downtown, so the addition could be built on the space above them.  The applicant’s justification was a needed new stairway and an elevator and could not be accommodated within their original building’s footprint, yet most of the proposed addition, was for increased tenant space.  He said he would also note the elevator did allow the applicant to finish the 3^rd Floor. Therefore, he was already increasing tenant space at that location. 

The parking component of this proposal was awkward any way it was looked at.  The City should be in the business of increasing parking downtown, not decreasing the parking.  Taking away public spaces from retailers in the 800 block and replacing those spaces several years later in another block, did not help retailers in the 800 block today or tomorrow.  The proposal did also set a precedent for this developer and others in the future at other locations, certainly for parking lot space, perhaps for City park space.  There was a difference between being developer friendly and bending over backwards. 

It was disturbing that through two public HRC meetings over two months under repeated questioning, staff and the HRC were assured the covered spaces would remain public parking.  Only after a narrow HRC approval, with the lone architect on the Board among the dissenting, was the public informed the parking was going to be private which was disappointing. 

He said when really analyzing the parking component, there were negatives both ways.  If the spaces became private and enclosed with garage doors, long time retailers in that location would have their public parking diminished unfairly to favor another, but if the spaces stayed public, with no garage doors, drivers would have limited sight lines when backing out, fenders would be scraped on brick and the City would be liability, obtrusive signage would be needed and worse, if exiting your car in a space enclosed with walls on three sides and someone with ill intent stepped in the open area to block your path, you’re trapped.

He said the City Commission was being asked to do too much in this case and so was the public.  The solution was simple.  Tell the developer if they needed a new stairwell and an elevator, plus a small lobby space, fine, but there was no room for increased tenant space at that location.  A smaller addition encompassing those elements could be constructed at the building’s southeast corner and would be a better preservation fit for an important downtown building.  The parking issue could be greatly minimized, if not completely avoided.  This was a situation that called for compromise and he believed a compromise could be had where the developer could have his elevator, increase tenant space, the historic integrity of the Standard Mutual Life Building could be protected, the public right-of-way could be protected, but to have that compromise the City Commission could not say “yes” to everything the developer wanted.

K.T. Walsh, Lawrence, said she concurred with the previous speakers.  She said she watched the Fritzels work with the people in the Oread neighborhood and those people were very pleased with the process.  She said it was surprising there were not at least letters sent out to the immediate neighbors explaining why the developer might need those parking spaces or at least visiting with the neighbors to at least warn people of the parking issue.  There was also more parking needed in the area because of the Eldridge Extended, the new grocery store that would be opening, the added office space going in at the Standard Mutual Life Building.  She said as a minor point, it appeared the dumpster needed to be relocated and would that mean another loss of another parking space.      

Jane Pennington, Executive Director, Downtown Lawrence Inc., said they appreciated all of the work the Fritzel group had completed and all those projects were admirable.  She said she was thrilled with the Eldridge Extended as well as the Eldridge.  However, they were concerned that letting those parking places go was a dangerous precedent.  She said she agreed with Shumm this request needed to be looked at very carefully before taking a step and hoped the Commission would consider the future ramifications of letting those parking places go.   

Mayor Hack asked Corliss to outline some of the conversations regarding the ability to replace those parking spaces immediately, but was that the precedent the City Commission wanted to set.  She asked if they should think about the financial aspects of holding money in escrow.

Corliss said Walker Parking Consultants, which was a nationwide firm that had done work for the City in the past and the City received information from those consultants periodically.  The regional cost for parking garage facilities was in the $13,000 to $15,000 per space amount currently, but did not include land acquisition because it would vary from community to community.  He said what staff did with the $25,000 amount was recognize something would not be constructed this year and construction prices were likely to increase.  Staff took that top dollar amount, $15,000, and increased the amount to $25,000.  There could be other science with that, but staff was not sure how the City Commission wanted to proceed with this type of issue.  So many times, when staff wanted to set policies, staff had to set policy with the particular and this was an example.

The appropriate arrangement was to receive those funds when there was actual physical occupancy of the parking spaces and staff would retain those funds in the City’s Capital Improvement Reserve Fund for the express purpose of using those funds for parking replacement.  He said he thought staff should investigate Commissioner Amyx’s suggestion about looking at the existing parking lot and seeing if that lot could be retrofitted in a way that was helpful to that parking lot and responded to the need for parking spaces.  He said there was that odd entrance at the southern part of Vermont in a sense that it was not like other parking areas downtown.  He said maximizing parking spaces could be done, but aesthetics could be lost such as losing trees. 

If the Commission wanted to proceed with this project, the Commission would direct staff to come back with an agreement that spelled out a lot of those details.  The issue would be placed back on a Commission agenda and staff would ask for City Commission approval of that further refined concept. 

He said he did know the Fritzel’s had been in contact with a lot of property owners in that area, but additional public comment had not been done.  He said contacting affected property owners was a good point and staff wanted to be responsive.  He said in the agreement staff needed to spell out, with City Commission assistance, exactly what was the City’s commitment for responding to the parking needs that were created by the loss of those parking spaces.  He said staff wanted to have some acknowledgement they were going to respond whether to that need whether it was revising that parking lot or something else.

Additional public investment would be needed downtown for more parking.  He said when talking about additional redevelopment opportunities, they could see the opportunity to further flush that out on what exactly that meant and was the City going to entertain other proposals similar to this proposal for building on surface parking lots with the clear path for replacing those parking spaces.  He said they did not want to reduce parking in the downtown area, but increase parking in the downtown area and pedestrian traffic.  In order to do that, staff thought it would require some redevelopment.  He said the City’s parking spaces could provide some of those opportunities if done correctly.  Obviously, if it was done incorrectly, which there was a legitimate concern, then downtown would simply lose their parking spaces and drive people from coming downtown which was the exact opposite of what they wanted to happen.

Mayor Hack said there were two issues which were: first, the specific 8 parking spots and; second,  the Commission’s direction regarding further requests for future surface lot usage.

Commissioner Amyx said regarding those 8 spaces, he thought it was possible to change the parking lot with a new isle way running north and south and could probably pick up those parking spaces lost by this particular request.  He said Shumm brought up important points in looking at future requests.  He said the Commission needed to make sure this development was transparent and he would like to review all of the plans for this development, public discussions about parking and investments both publicly and privately, and any redevelopment plans in the downtown area.  He said there were vacant lots on the north side of the parking garage.  He said that property was part of the original TIF District and that property was not being utilized.  He said if nothing else, he suggested temporary parking on those lots. 

He said he thought this was a very good project and there were ways, in this particular case, to take care of the loss of parking spaces behind the west side of the 800 block through redesign of that parking lot.  He said he would like staff to come up with a plan, if they were going to allow the use of public parking places, along with the costs and requirements that needed to be met.

Mayor Hack said when going through several study sessions regarding the Library, they had seen a great deal of plans for the north end of town.  Some of those plans were domino related, but she would not say those decisions were made absent public knowledge and information.  She said those plans were very carefully studied and given to the public.  Now, they were standing on the cliff and ready to move forward on some of those plans and that was what Corliss was asking.  She said one of the City Commission’s main goals was the enrichment of the downtown area and this would allow that process to begin.  She said they knew they needed to bring more people downtown, but also knew that could not be done without adequate parking.  He said they could not give up 8 spaces, replace or add to the City’s parking stock 8 spaces at a time.  There was a lot of difference between those 8 parking spaces and the future 28 or 38 spaces the City might be asked to consider.  She said she would like to see the Commission move forward with the 8 parking spaces for the construction.  She said she liked the idea of holding the money in escrow.  If the Commission decided that some of those parking spaces were safe, those parking spaces would be returned to the public and that portion of the money could be returned to the developer, if not, the money would be held for perhaps, redesigning that lot or held in escrow for the City’s future decision making which went along with the idea of larger lots.  

Vice Mayor Dever said the plan boiled down to a couple of positives.  He said the developer was trying to revitalize a building that was a historical building and in essence make the building more accessible to those people with disabilities; taking 1200 square feet of land and gaining 5,000 square feet of office space; bring 20 new bodies working downtown, if not more, with that 5,000 square feet of office space; and bringing new customers downtown.   He said revitalization of a building required private investment primarily, but also public assistance in that process.  He said this was the City’s only ability to effect change in small bites.  He said they wanted to talk about grand ideas and large parking garages, but he looked at this issue as one bite at a time.  He said seeing the opportunity to add more people downtown and add the ability to house more businesses downtown was going to maintain its relevance and assist the community in adding other reasons for people to come downtown.  He said the loss of 1200 square feet of parking area was not a good one, but the trade off was for the greater good for the community.  He said as stewards of the land, the City owned, the Commission needed to make sure the land was being taken care of and what was proper for the City.            

Commissioner Highberger said he appreciated the investments Fritzel Construction made downtown and hoped to continue to work together.  He said a parking structure was needed near the Eldridge at some point.  He said he could not support the plan as proposed because every business downtown would like dedicated parking, but it was not how downtown worked.  He said making the building accessible was necessary and supported giving up whatever parking spaces needed to make that happen, but under the current circumstances, he could not vote for turning over public parking places to a private individual, especially because those parking places were partially financed by other property owners in the area.  He said if the idea that Commissioner Amyx proposed could be done, it would relieve some of his concerns, but not completely.     

Commissioner Chestnut said he supported moving forward with the proposal.  He said he shared some of those concerns, particularly for those adjacent businesses that would suffer the most.  He said there was no doubt the development would cause some issues.  He said the Commission needed to think about the broader perspective and he advised the Commission look at that agreement as a boiler plate and a philosophical decision they had to go through because there would be other requests.  He said he saw redevelopment opportunities and it was critical to the success of downtown in the long term.        

He said he agreed with Commissioner Amyx in that there might be a two step process which was some ability to claw back some spaces to relieve some of the issues when going through this process that were not $15,000 a space, but some other idea for parking.  He said there might be an analysis that could be done in the short term for stop gap measure that would pick up 25 to 35 spaces that started to relieve some of the issues, but ultimately going to a goal of something of scale and not wanting to spend an absorbitant amount of money getting those spaces.  He said there might be a compromise which was going to be a challenge because the project would be case by case depending on the land and what was around that land.  He supported moving forward because he knew what that space had been and what the space was now and how much the space contributed to the community in that area.  He said they were dealing with limited land and would need to make some choices that might create some modicum of pain for some of the businesses in that area for the short term.  He said whatever that could be done to pick up 5 or 10 parking spaces was good.

He said there was a comment made about the cost of doing business downtown and agreed it had gone up significantly in the last 5 to 10 years, but a lot of that was based on some of the building acquisition and it was in preparation for the next step which was redevelopment.  He said in some ways there was the pain suffered of some of the increase in rents and so on without the ultimate gain of the outcome of having more feet in the downtown area frequenting those establishments.  He said the Commission needed a vision of what their ultimate goal was and realized they were going to have some short term pain to suffer through for particular business owners when getting through this issue. 

He said regarding the comments about the library, he agreed there had been a lot of plans, but now they were in another cycle of City Commissioners and those plans might need to be revised to get a broader perspective of the longer term goal which would be beneficial for him.            

Moved by Amyx, seconded by Chestnut, to direct staff to prepare an agreement with the applicant concerning the parking spaces as generally outlined in the July 19, 2007 staff memo for future City Commission consideration.  Aye:  Amyx, Chestnut, Dever, and Hack.  Nay:  Highberger.  Motion carried.                                                                                                              (16)

Moved by Chestnut, seconded by Dever, to direct staff to prepare a draft Request for Proposals to seek proposals on the possible redevelopment of surface parking lots in the downtown area; and provide additional research on the items outlined in this memorandum.  Motion carried unanimously.                                                                                                                (17) 

Receive staff report regarding the 2008 budget.

Mayor Hack said based on the number of members of the public who intended to speak and because the Commission needed time to discuss the topic and provide direction to the City Manager, she would limit public comment time to one hour total.  She requested members of the public to be concise with their comments and to please try to not repeat what previous speakers said. 

David Kingsley, speaking on behalf of Grassroots Action, said they had some views and recommendations and would like to see a return of the funding taken from the Human Services in the last budget cycle, the 4% cut, and they would also like to pay all City workers enough to keep up with inflation.  Essentially, they supported the 2% option the City Manager’s Office submitted in their original memorandum.  Also, he said they would like to keep the bus system running and affordable; and the pool open and affordable.  He said to do all those things, they recommended restoring the 1½ mill levy in the last go around.  He said they looked at what came back to a homeowner for that reduction really was not that significant compared to what a sales tax would cost.  He said if living in a $300,000 house, the savings for the 1½ mill was approximately $51.75.  He said if there was a ½ cent sales tax to replace that 1½ mill, what was seen in one hand would be taken back with spades.  He said a $150,000 house, which was probably a lower income working class person was $25.00 from that 1½ mill reduction.  

The bigger issue was a philosophical issue because when looking at the trend of taxation and revenue in our country, in the past 30 years, it had become rather obscene.  He said there was a changing relationship between federal, state, and local governments.  Down the road they were going to need to start looking at that issue because as the government quit transferring payments back to the lower levels of government, the local level was left scraping over what they could.  He said most of what the local level fought for was regressive.  He said it had become a crisis because when hitting a 7.3 cent sales tax, they would get to ceiling where they would need to address that issue.

If looking at the lowest income person, they would probably spend most of what they made on goods and services that were subject to that sales tax.  Not only would they be paying most of what they made for the sales tax, but they might be buying that on credit and would be paying interest on the sales tax.  He said regarding property versus the sales tax, property tax was a tax on wealth, what a person was taxed on was something that would appreciate and add to a person’s wealth.  He said when property was taxed for capital improvements, that property was actually being improved and that needed to be kept in mind.  When paying a tax on something that was consumed, nothing was created in improving wealth.  The mortgage interest deduction was available to a homeowner and sales tax could be deducted, if a person income was extremely low.  He said for instance, if a person made $13,000 or less a year, approximately $30.00 could be deducted for every exempt person and once reaching $27,000, sales taxes could be exempted from income taxes.

He said the City was looking at a tax loss and it needed to be discussed.  He said a process was needed to discuss where the City was at, where the City was going to get its revenue.  If going for a sales tax, there would be a big discussion in the community because he thought people generally did not understand the mill levy and how it worked.  He said people think ½ cent sales tax sounded good compared to a 1½ mill, but when finding out what they were really getting, he thought they would be unwilling to do that.  He said he thought the property tax needed to be looked at.  He did not like the property tax any better than anyone else, but he thought it was far more fair than a sales tax.

Alan Cowles, West Lawrence Neighborhood Association, said he wanted to discuss DeVictor Park which was under development and was one of the more popular uses of City money, especially on the west side of town.  In February of 2006, the City Commission voted a bond of $500,000 for the development of parks.  August of the same year, the Commission reduced that amount to $200,000 and he did not know where that money went, but it was not going to parks.  He said recently even a portion of that $200,000 was withheld. 

He said with regard to DeVictor Park, he asked the City Commission to release that money for the development of the playground; place a couple of bridges at the south end of the nature trail which would enable the nature trail to be used; and, complete that concrete path on the south end of the park.

He said regarding the speed bump on Harvard Road, the neighbors in that area had seen very high speed on that road and there were a number of children that lived in that area.  The City Commission had approved 5 or 6 speed control devices, but none have ever been funded and nothing has ever been placed at those locations.  He said out on Silverstone, which was just west of Stoneridge, there was a very low profile speed bump which could be gone over at approximately 30 mph.  He said he would like the City Commission to authorize the placement of one of those low profile speed bumps on Harvard, west of Wakarusa because not only would it help to control the speeds, but it would show the entire town there was something quite sensible the vast majority of citizens could tolerate in terms of speed control.             

He said finally, he hoped the City Commission would continue to support the City’s Health Department and the heavily used library which there were a number of highly dedicated people who deserved the City’s support.

Marian Hukle, Lawrence, spoke in support of the “T”.  She said she began riding the bus on December 16, 2000 which was the very first day the bus started.  She said she was a choice rider and would like to discuss to issues.  She said she collected over 100 signed letters over a couple of day riding the bus from her fellow bus riders and supporters asking the City Commission to not make any cuts in service to the “T”.  She said 50 of those letters included additional comments which fell into 3 common themes. 

The first issue was work and jobs.  She said the “T” took people to work and she knew that several of the City Commissioners campaigned on more jobs in this City and asked the Commission to allow those “T” riders to get to their jobs.  She said “T” riders lived, worked, and shopped in this community and did not take up parking spaces. 

She said the second issue was fairness and equity.  The bus fair went up on July 1^st and was going up again on January 1^st and the patrons understood that increase was necessary and hoped the increase would not only maintain their service, but perhaps improve the service.  They never expected to see those fares doubled and then services cut and there was bitterness on the bus that they had been betrayed by the City and the City did not care about the “T” riders.

The third issue was the environment.  The City of Lawrence was full of people who cared about the environment, not just of this City, but the world.  She asked what kind of City did Lawrence want to be and were they looking forward in to the 21^st Century.  In the 21^st Century more public transit would be needed, not less.  It was not just about the global warming or environmental pollution, but also about the human environment that everyone lived in and what made a City livable and a pleasant place to be.  She said smart cities were adding to their public transportation.  Certainly if Lawrence wanted to be a serious contender, as one of the most livable cities in the United States, then public transportation needed to be a priority.                           

One important thing about public transportation in this City was the “T” was an equal opportunity service and opened to everyone.  She said the “T” carried people to work and people to school who did not have transportation.  She said it was important to have a back up to a persons own transportation needs.

She said regarding the ridership, in the evening hours, there was a myth that nobody rides the bus after 6:00 p.m.  The bus ran 14 hours a day and the 2 hours from 6:00 p.m. to 8:00 p.m. constituted 14% of the ridership a day which the idea would be to get close to 14% of their ridership in that two hour windowed time.  She said according to a survey that was conducted by MV Transportation, it was found that 12% of the rides taken from the day were from 6:00 p.m. to 8:00 p.m. which was right on the button and the City was getting its expected proportion of riders between those hours.  She said if the service was cut, according to MV Transportation it costs $232,000 to operate those 2 hours which was 8.9% of the total operating budget.  Cutting the service would save 8.9% over the budget, and the City would lose not just 12% of the ridership, but more, because those who were coming home from work between 6:00 and 8:00 p.m. would not ride the bus to and from work and the City would lose on both ends. 

She said she understood the difficulties of balancing the City’s budget, but cutting bus service to save a few dollars did not seem to be, in the short term, the way to go.   There was a lot of talk about consolidation with K.U.  If the City Commission made those cuts, it was if the City did not have a commitment to public transportation and lose some of the trust between K.U. and the City when going into negotiations.  She said cutting services was a step backwards away from the consolidation the City was looking for.

Alan Black, Lawrence, said he supported funding of the “T “.  He presented two tables to the City Commission which indicated the total number of riders for each of the first five full years of service.  He said there had been an increase every single year and over a 4 year period the total increase was 119% which the number of riders had more than doubled.

The second table showed the other 3 transit systems in the State of Kansas that received federal aid and therefore those transit systems were required, like the Lawrence system, to provide statistics to the U.S. Department of Transportation in which they now have a National Transit Database to look up those statistics.  In those same 4 years, the ridership in those other three systems, two had gone and one had gone up slightly.  Therefore, those systems compared with an increase of 119% in Lawrence, the Lawrence Transit System was the most successful in the State of Kansas.  He said it would be a shame to cut the Transit Systems budget or cut the hours of service.

Jeff Eubanks, Lawrence, said not only did people use the bus system to get to work, but to come home.  A number of those riders worked at East Hills Business Park, and those riders that worked those later hours would not have a way to get home.  He said he did not think the City could afford to cut the system, especially because the ridership had more than doubled in this community.  He said the City needed to find a way to keep the transit system going.  He said he agreed with the property tax idea, but he did not necessarily like the increase either, but it was a better choice than the sales tax.  He said he had heard the cuts to the transit system would only affect 600 to 700 individuals which he thought that number was very low.  He said the city needed this transit system.  There were a number of lower income people who used the transit system because they did not have vehicles.  He said he rode a motorcycle, but during bad weather, the transit system helped him get to and from work.  He said he liked the idea of consolidating with K.U. and it would be good for the City.  He said more qualified drivers were needed to be able to consolidate those bus systems.  He said maintenance was another issue that needed to be addressed because those buses already had a lot of hours of operation.          

Carol Casey, Lawrence, said cutting hours affected the para-transit riders as much as it would affect the fixed routes.  She said if someone had never been in the position of not having a vehicle, they would not understand how beneficial the transit system was to the public.  She said those people worked 40 hours a week and had no other way to get to work.  She said the City would lose sales taxes which was very important. 

She said cutting hours would also affect people’s health because there were people who had dialysis appointments and other appointments who would not be done at 6:00 p.m.  She said cutting hours and services would not be beneficial to the community. 

Sharla True, Lawrence, said she had to go to riding a bike or walking because her vehicle needed repaired.  She said a speed hump maimed a boy on the north end of town.

Mayor Hack said that was not the case, a trailer hit a dip and that dip was repaired.

True said roundabouts were pricey which were designed to move the flow of traffic.  She said those roundabouts were built with brick and filled with flowering plants.  She said as a CDL driver, short children were hard to see over the front of a bus, but when adding that heap of greenery in those roundabouts, and a person was in a low riding car, a person could not see people crossing the street.  She said she had been almost hit twice at roundabouts in the last two weeks.  Safety was a feature that needed to be considered.  Also, she heard some of those roundabouts cost approximately $250,000.

Mayor Hack said the City did not have any money budgeted right now for continuing roundabouts.

True said it was her desire to have those roundabouts removed and place stop signs back up because those stop signs were cheaper and safer for children, bikes, and walkers.  She said she did not think it was a good idea to cut service hours to the “T” to save.  She said she would like to address bus passengers on the streets.  Since the new changes had taken place, those buses seem to only want to stop every ½ of a mile.  She said she missed two days of work last week because buses passed her.  She said she was completely reliant on her bike and the bus system.  Also, there was a concern about not being dropped off where a person needed to be dropped off.         

Mayor Hack said she understood True’s comments, but asked if she could center the comments on the length of time of the bus service.  The stopping points were something the City was working on to make the bus system efficient.

True said again, she recommended not cutting the bus hours, but extending those hours until 9:30 or 10:00 p.m., and definitely those hours on the weekend.  She asked if there would be an open forum regarding distributing flyers on the bus or eating lunch on the bus.

Mayor Hack urged True to contact city staff and perhaps PTAC could look at those issues because they made recommendations to the transit system.

Diane Getz, Lawrence, said she would first read a letter from another paratransit rider who worked at the East Hills Business Park concerning cutting services.  The letter read as follows: “This is concerning the City bus transit system.  I am writing because I am really concerned about the changes that are going on with the bus system.  I really don’t understand why, all of a sudden, there are budget cuts.  The riders hear about the budget cuts after the six new buses were purchased.  This is a great bus service for everyone.  It is the best system, in my opinion, that we ever had.  I am a disabled rider so I ride the paratransit.  This transportation is extremely important for the people that don’t drive and they need to have transportation so they can get where they need to go.  I work every day and I have a later shift.  The reason is my department runs 24 hours a day.  It is very important that buses be able to run later and for this not to change.  They increased the fare in July to $1.50 per ride from $1.00 and it is going in January up to $2.00 per ride.  There are a lot of disabled people that use this system every day.  I think this is extremely important to keep the system the way it is.  I think that Saturday rides should stay the same because there are a lot of rides on Saturday.  I think changing the way the rides are now is going to put a lot of rider in a bind.  This service is extremely important, especially for the people that don’t drive and especially for the people in wheel chairs that have to depend on this service like the bus system. We need to be able to use the bus when it is needed.  I feel that if the budget cuts happened this is going to take away people’s independence especially with disabilities.  There are 6 new busses sitting in the lot.  If the budget cuts happened, there would be no one to ride them.  That doesn’t make any sense to me.  You all know the saying, “If it’s not broken, don’t fix it.”  This is my opinion and how I feel.  This is an extremely important subject to me.  I think the fare increase should be enough so the budget cuts don’t have to happen and the system can stay the way it is.”

She said another concern was the number of people who were on dialysis.  She said when the paratransit system ran late, because there was a 15 minute window for pick up time, some riders were picked up an hour and a half late.  If those people on dialysis were late, that meant those people get on dialysis late and might not be done by 6:00 p.m. and asked how those people were to get home.

She said she worked out at East Hills Business Park on a later shift that ended at 5:30 p.m., but sometimes there was mandatory overtime and if she did not do that overtime, she could possibly lose her job.  She said a lot of information needed to be considered and not change the time.  She suggested letting the buses pickup until 8:00 p.m. and also the Saturday rides.              

Constance Wolf, co-owner of a bed and breakfast, said she had served on the Advisory Board for the Lawrence Convention and Visitors Bureau.  She said there was a proposal to retain $100,000 from the bed tax that was collected.  She asked for a meeting with some of the Commissioners before they decided to retain those bed taxes so the Commission could get a better idea of what it was the CVB did to generate that tax.  This tax base was brought to Lawrence and was not generated from the people who lived in Lawrence, but generated from people from outside of Lawrence.  In fact, in 2006, visitors to Lawrence generated almost a million dollars. 

She said the CVB recently contracted with a professor from K-State who did an effectiveness study for the advertising that was spent and for every dollar the CVB spent, it generated $59.00 in Lawrence which was substantial.  She said it seemed silly to take that money away when the investment really was so good.  If taking that big of a cut, $100,000 that could bring them back to 2004 bed tax collections.  That had the opposite effect of what was trying to be done.  She said before the City Commission made a decision, the CVB would like to discuss with some of the Commissioners what the CVB did.          

Michael Pomes, Lawrence, spoke about the proposed swimming pool fee increases.  He said by increasing the fees, the City might be cutting off a viable recreational opportunity for kids.  One thing they were trying to accomplish, overall, was to reduce childhood obesity and by raising the pool fees to $3.00, the City might be making it hard for many families to send their kids to the pools because swimming was a very good form of exercise.  He said if a fee increase was needed, the fee should only be raised to $2.50.

He said regarding the Lawrence Transit System, the Commission should be careful about trimming the hours.  Personally, he was an occasional rider of the “T” and had gone home after work on the bus.  He said if the buses stopped running at 6:00 p.m., then he would be stranded.  He said the City Commission needed to consider the regular bus riders that needed to get to work, but it was also a good stop gap measure in that it should be available to anyone who could use the bus system.

Lance Fahy, Lawrence, said he would be adversely affected by cutting the hours in public transportation because the visually impaired did not drive.  He said the head of Human Resources had emailed the Commission regarding the effect that cutting those hours would have on attendance.  He said as the Commission looked at ways of procuring the tax dollars for the City budget, he suggested communicating the mill levy information to everyone well because he as a property owner understood the mill levy and he was perfectly willing to pay that extra $30 or $40 dollars.  Many people that own and pay property taxes had that money to spend.

Duane Van Anne, Lawrence, said he recently had ridden buses in England, Tokyo, Hong Kong, Manilla, and in Singapore, and those bus systems all worked well.  Some of those governments were one party government and that was part of the problem.  He would have not been able to travel around in those countries without public transportation.  The problem was not cutting from the bottom, but the top.  He said he did not know why corporate CEO’s need one million to three million dollars to live on because he was having trouble spending what little bit he earned.  He said it needed to be reversed a look at what MV Transportation was earning and what some of the other officials earning and why it was costing so much to run that bus system.  He said look at Topeka who had a Port Authority and how they budgeted their system without involving corporate entities that profiteer from running the City’s bus system.  He said bring transit home and make it a City project and hire City employees to run the buses and cut out the wealth on the top end and save it on the bottom end.              

Tolpay Fiparelli said she panicked when she first heard about transit system cutting the hours in the evenings and on Saturday.  She said she did not have a vehicle and needed the bus system for the freedom to get around, not only for work, but recreation.  She said there was also a psychological aspect of not having the ability to get from one point to the other.  She said the transit system was important, especially for people who were isolated from their families.  She said she hoped the City Commission would consider not only keeping the present bus system, but in the future, increasing the hours to Sunday’s and later hours in the evening.

Connie Ruehler, Lawrence, read a letter to the City Commission which said, “I’m attending this meeting at City Hall and writing this letter to express my opinion about the City Transit.  I’m not an employee, I’m a happy rider.  Instead of cutting hours and days of service, I think the bus should run seven days a week.  I do believe it would be used all seven days.  In talking to bus drivers, I have been informed that the bus system is doing well and paying for itself.  I don’t believe it needs to make a profit because of the service it provides the citizens of the community, this is needed.  I think there are sources outside of the City tying to destroy the service.  Like all things, the dollars, dollars, dollars, are probably wanted for something else, whether that something will provide a community service or not.  I suppose you are aware that there were many people who depend on the transit for all the transportation they have and therefore, very dependent on the service.  I do believe if the transit was marketed more fully, the revenue would increase.  As far as purchasing new, needed buses, I do believe the buses could be smaller in size and not vans, but smaller like small school buses.  The Bus 8 would need to be large as it is now because of the large number of KU students it transports from the stop at Ousdahl to the campus and back.  That bus is many times full and people standing.  I also believe there is enough money in Douglas County to buy new buses for the purpose of advertisement because that would not cost anyone anything and it would make money.”

Marc Eperd, member of PTAC, said he was choice rider.  He said he had a fairly decent property tax bill and was perfectly willing to have that tax raised in order to both keep the service where it was and increase the service. 

David Smith, Grassroots Action, said this was a result of a failed experiment which was an experiment in tax reduction.  It was almost exactly two years ago the City Commission reduced the property tax levy by 1.5 mills.  The City was now in a situation of contemplating painful reductions in bus services, raising prices at the pool and had not spoken about the freeze in proposed wages for City workers or about the 2 dozen non-profit service agencies whose budgets had been cut 4% this year.  If the mill levy had not been cut 1.5 mills, he thought the City would not be facing any of those issues.  The City Manager indicated if 2/3 of the property tax reduction was restored, the bus system could be kept whole, and City workers could be paid a 2% wage increase this year.  This budget plight had been entered into since enacting that property tax reduction.  It was wonderful to save homeowners a few dollars if possible, but the price appeared to be serious reductions in the services that were badly needed by people in need; low income people and people with special needs, a high percentage of the community. 

He said Grassroots Action strongly encouraged the City Commission to think about restoring the balance, go back to the tax level the City had two years ago and by the City’s own calculations that would eliminate the need to have this conversation about the bus system. 

When that tax reduction was enacted two years ago, Commissioner Highberger voted against it and thought it was fiscally irresponsible.  Mayor Hack said she was fearful they were forcing future Commissioners to raise the taxes once again.  He thought the taxes should be restored to what those taxes were two years ago, to eliminate the need for those cuts the Commission was contemplating now.

Joe Herrington, Lawrence, said it was not everyday he asked politicians to tax him more than what was planned, but in this case he welcomed the additional taxing rather than the alternative.  He urged the City Commission to raise the taxes and not cut off human services.  He asked if the City wanted to create more homeless people by cutting the Housing Authority and if the City wanted to be known as a community that did not have enough Health Department personnel to meet a major public health emergency.  He asked if the City wanted to cut after school and summer programs for kids to keep the kids off of the street.  He said those were the things people looked at when locating businesses or residing in Lawrence. 

Hilda Enoch, Lawrence, said the Mayor started this meeting by asking what was important to the community.  She said before the Commission voted, the Commission needed to think about the type of community Lawrence needed to become for everyone’s future.  She said those that needed help and support to get to their jobs and health care, she could not conceive of a community that did not care for their entire community.  She said the community should be subsidizing to make everyone feel a part of this community with health care, recreational needs of the children, and the mental health of this community.  She asked the City Commission not to do something that would make the community feel less proud to be a part of Lawrence, Kansas.  She said she supported raising property taxes.

Helen Moritz, Lawrence, said for the past year she had been a full time driver for Lawrence Transit.  Anything that diminished the bus system seemed grossly wrong.  She said she was a homeowner and had no illusions about her tenure as a driver because there was no job security and would be paying taxes long after she was terminated.  She was in full support of raising taxes to support the bus system.  She encouraged the City Commission to support the bus system because of her passengers.  Some of her passengers were present at the meeting, but had to leave because there was not enough time before their busses left.  She said there were riders with physical and mental limitations who rode on fixed routes and was thrilled when someone with a handicap was fired up with enthusiasm to get to work.  She said approximately half of the dialysis patients at Kansas Dialysis Services would be affected because they go for treatments on Saturdays and some of the evening patients would be affected because they might have problems and would be late for the busses.  It was unthinkable to deprive people who made it part of their lives by taking the bus with their children, going shopping, to work, to the park, visiting friends and going to the pool.  It was unthinkable that ending Saturday bus service and evening hour services could cause the entire thing to crumble.  It was a loss none of them could afford. 

Julie Cooper, Lawrence, said it was mentioned that cutting the bus service would only affect 600 – 700 people, but in a town this size, that was too many.  One bus driver thought it was an underestimation of how many people would be affected, but even if it was affecting a few people, it was affecting too many.  She said the bus system currently was not running enough hours and if anything, the bus service needed to increase their hours. 

Sharla True said that she would qualify, but even if she wanted a half fare ticket, she needed to sign a release for her complete medical file to be sent to the City of Lawrence.   She said the Transit Department had gone from a 14 page report to a 32 page report that was quite intrusive. 

Mayor Hack suggested that that person visit with City staff about the individual issues that she was dealing with which needed to be verified by staff.

Mayor Hack said in terms of alternatives when discussing the “T” it would be a .7 mill levy increase to maintain current services or .425 mill levy to retain Saturday service, but reduce the bus service from 8:00 p.m. to 6:00 p.m.  She said it was important to clarify the fare increases in July was only to maintain the current bus system this year.  She said the City Commission needed to determine the level of service for the “T” and how they needed to proceed. 

Commissioner Highberger said he thought property tax in Lawrence was reasonable and would still be reasonable if raised by 1 mill.  He said compared to the 10 largest cities in Kansas, Lawrence was below the median on property tax rates.  He did not want to minimize the hardship that taxes imposed on businesses and individuals, but overall Lawrence was in a good ballpark and as several people had mentioned, the mill levy was lowered by 1.5 mills over the last three years.  He said he wanted to thank the school board and county for keeping their mill levy flat or lower this year.  He said a person that paid $200,000 for a home in this City, paid around $600 a year in taxes.  He said that $600 a year in taxes equated to $50 a month which was less than what many people paid for their cell phone bill.  With that tax money citizens received Police and Fire protection, great parks, street maintenance and snow removal, and a list of other things which was a bargain. 

There was a notion circulated by some people like the Americans for Prosperity that lower taxes always correlated to increased prosperity and thought there was no information to support that notion.  Again, he did not want to minimize the impact that taxes could have on people and knew it was burdensome when on a fixed income.  He said it was important to note the state legislature expanded the homestead property tax credit this year and raised the limit from $600 to $700.  He thought it was absolutely the wrong time to cut services to the “T” and agreed the City should be looking to expand service.  If bus service was cut now, it would impede the City’s ability to merge with KU.  Obviously, it was going to impose great hardship on hundreds of people around town and it would make it harder for people to hold their jobs.  He fully supported the recommended .70 mill levy increase to maintain service at the current levels.

Commissioner Chestnut said there had been a lot of discussion about the reduction of 1.5 mills, which was true two years ago.  What was omitted in that equation was the assessed valuation of homes had gone up and Douglas County had been one of the 5 top counties in Kansas over the last five or six years where assessed values had gone up.  He said from 2002 – 2006, property tax had gone up 40% and it had been a hardship for people.  That was a clear message when talking with the citizens of Lawrence.  The taxes had hurt housing affordability and increased homeowners insurance along with property taxes.  The comparability to other communities he could not comment on because the entire taxing situation needed to be looked at.  He said with a 7.3% sales tax, Lawrence was lower than a lot of surrounding communities, in the range of .25% - .5%. 

He said regarding the “T” his issue was not to disrupt people’s lives.  He said he did not believe as a stand alone system it was sustainable.  If looking at what was put into the system, $1.5 million was depleted out of the reserve fund over the last two years to sustain the City’s current service.  He said for 2007, approximately $700,000 in property tax would be put in and were proposing with the .7 mill increase $1.3 million for 2008.  He believed the City would have a substantial increase in 2009 when renegotiating the contract because current fuel costs were much below the market and if that was another increase of 15%, they would have another mill levy increase.  Also, he said the City’s bus system was getting old and had a discussion about a maintenance garage.  He thought it was very possible in the next four or five years, as a stand alone system it would be a $2 million bill which would be tripling or quadrupling the mill levy that they were dedicating.  He said he could appreciate everyone’s concerns in the room, but they also had to think about the Fire, Police, Street Maintenance, and a lot of other things.  He was having a difficult time with 2008, but also where it went from this point.  It was a difficult situation and putting it into perspective, the City’s fare box receipts represented less than 10% of the total cost of the system.  He said he supported the reduction of bus services from 8 to 6 p.m. which staff thought was least disruptive.  He did not think Saturday service was ever on the table because it would disrupt negotiations with MV Transportation.  He said he was focused on moving the bus system to a merged system because ultimately, if the City wanted increased service and a paratransit system that was more effective, the only way he could see that happening was to be a consolidated system that was more tax efficient for everyone involved.  There were significant logistic issues, but he was placing that challenge on City staff.  He said now there was a transportation system with MV Transportation that provided service for both entities and negotiated a deal with KU on Wheels that ended with the City’s contract.  He said he did not think a small reduction in services was going to change the City’s position in negotiating with the University because the City held the federal funding.              

Vice Mayor Dever said there were two issues at hand.  One issue was the scale of service.  He agreed more hours of service and availability was needed, but the question was at what scale.  He said it was the City Commission’s responsibility to help the community in providing a transit system because it showed this was a progressive community.  He said he had some concern that every time he saw the “T” it was fairly empty, especially on the west side.  It was not about getting rid of the Transit system, but evaluating the way it was running right now and making sure it was the most efficient and serving the most people possible.  He thought all the comments changed some of his viewpoints, especially towards the hardship.  He said until someone had come across hard times, a person would really not know what one would be willing to give up and with all of the comment he heard, changed some of this view points.  He said he agreed the Commission needed to do what they could to impact the least amount of people.  What the City could afford was one thing, but what he wanted to do was another issue.  In general, he was in favor of some mill levy increase.  He was not sure at what point he was willing to start or stop.  He wanted to take the opportunity to take a hard look at the transit system and determine if they needed to sit down and study how they could do it better, smaller, yet serve more people.  To him it was about the use of the resources available.  They were having the buses drive miles around town with no one on those buses which was irresponsible as a community, irresponsible to the environment; it was eating up the asphalt of the roads and consuming precious resources which bothered him.  He said if they could cut back or evaluate how different parts of the community were being served and focus on areas using it the most.  He said he would be willing to continue service with the mill levy increase, but only with the understanding they all commit as a City to sit down and figure out what it was going to look like from a year from now because it was going to cost a lot more next year.  What they wanted to afford now might cost them 3 or 4 mills in the future to support and he could not support that based on a $3, $4, or $5 million cost to run the bus system. 

Mayor Hack said she was leaning more with her heart on this matter rather than her head.  She said the City provided in their bus system a social service and knew transit systems were generally not self sustaining.  This City did not have the system that everyone grew up with which was always used and the bus came every three minutes, but a portion of the population of this City was transit dependent. 

She said she would like to discuss with the Public Transit Administrator and PTAC what could be done in the future to adjust the bus system so it served those people that needed it the most and was not running an empty bus in places where it was not needed.  She said she did not want to put the City in a position where they were cutting people’s ability to get to their jobs.  With the enormous number of people in East Hills and people who depended upon that transportation, she was struggling with reducing the service to 6 p.m. when in fact it could cost people their jobs.  If it cost one person a job, she did not think that was what the Commission wanted to do.  Now, the Commission was being forced to make up for what should not have been done two years ago.  She supported retaining their level of service and directed staff to look for the most efficient way to run the bus system.  If that meant redesigning routes and not serving some of those areas that were being served now because of under utilization, then that was the way it needed to be.  She suggested setting a timeline for unification of KU on Wheels.

Commissioner Amyx said he looked at the City’s revenues and expenditures for 2008 and approximately 4 million more dollars would be spent than in 2007.  He asked about the employee cost of that 4 million dollar increase. 

He said this City needed a bus service.  He said when looking at maintaining the level of service, he knew they had to consolidate the system with KU on Wheels.  He said the City could not have a competing bus system that produced revenue.  He said in looking at the revenue available for 2008, he suggested Option 1 at .425 which stopped the service at 6 p.m.

He said the City Commission was going to have the opportunity to decide revenue levels throughout this entire budget from wage adjustment for City employees to the level of service for the bus system.  As the Commission went through this process and trying to maintain a certain level of mill levy the Commission could take from one and give to another.  He said part of the discussion needed to be if the City was going to maintain a zero mill levy increase and make adjustments or fund the priorities in the budget.  

Mayor Hack said the Commission had listened to an hour of conversation and most of the time was directed to the “T”.  She said the Commission needed to decide if this was going to be a community that had a public transit system that functioned or not that met the need of people or not.  She said then the Commission could look at some of the other issues.  She said she saw the “T” as a separate discussion because it was so important to people on the positive or negative side.

Commissioner Amyx said he did not disagree, but if there were other funds available inside the budget to make the Vice Mayor feel more comfortable in his decision without having a mill levy increase, he asked if they would be better off doing it that way.

Mayor Hack said if she and Commissioner Highberger felt they wanted to maintain the bus system at the current level, if Commissioner Amyx saw a way to do that without a .7 mill levy increase, then she would like to know what that idea was.      

Vice Mayor Dever said he supported Option 1 in order to move forward. 

Commissioner Highberger said the Commission was deciding the maximum because they could go lower, but not higher.  He said they could shift money within the budget.

Corliss said as to Commissioner Amyx’s question, the recommended budget had approximately $146,000,000 in revenue and $141,000,000 in expenditures and of those expenditures, $60,000,000 would be for City employees.

Commissioner Highberger said the exception from the general fund was they would be spending 97%.

Corliss said when looking at the fund balance projections they were projecting spending 97% of what was budgeted in 2008. 

Corliss said in the general fund, he recommended a .32 mill levy increase.  One of the other moving parts was the fund balance.  Option 1 had no mill levy increase, no wage adjustment, and 17.5% fund balance.  The recommended Option 2 that he recommended was the .32 mill levy increase, 2% wage adjustment for City employees, and 16.5% fund balance.  It was important to note, the mill levy increase did not pay for the entire wage adjustment they were also paying for a portion of the fund balance.  Both of those fund balances were in the policy guidelines.  Either one of those fund balances presented a challenge as the Commission built the 2009 budget.  He said that was discussed in a transmittal letter on how they planned on making serious reviews of the personnel compensation system.  He said there were concerns the revenues were not growing like they were in the past, they would need to look at one of the major expenditure components which as he indicated was $60 million.  He said they needed to find ways to make sure that expenditure did not outstrip the City’s revenue growth.  He said there were a number of items to point to as opportunities for expenditure economies that they did not want to budget when building the 2008 budget.  He said they wanted to make sure in the general fund the revenues and expenditures moved toward some type of equilibrium.  He said that was one of the reasons why he was able to support a wage adjustment concurrent with a mill levy increase.  If increasing the base of the expenditures, you would want to do something with the base side of revenues.  If looking at an expenditure function that was taken away, then it would be appropriate to look at that wage adjustment as opposed to a mill levy increase. 

            He said regarding sales tax projections, if the sales tax revenue projection for the 2008 budget was 2% above the adjusted 2007 sales tax projections, the difference between 3.5% recommended budget amount and a 2% projection was roughly $328,000.  He was going to sit on a number of expenditures that would monitor the 2008 projections.  He said he planned on, unless directed otherwise, to sit on a number of expenditures that would be monitored in 2008 to make sure the City’s sales tax projections were on line.   In the equipment reserve and capital improvement reserve funds, staff would not make those transfers or commitments until staff knew the sales tax projections were on line.  The best way to respond to sales tax was to be very conservative with expenditures because he could not control the revenue.  The alternative was to revise the revenue estimate and either live with a lower fund balance in the projections or help him find expenditures to remove.  He said staff spent a lot of time going through those budgets and took out several million dollars from departments’ requests.  He said if the Commission wanted further reduction in expenditures, the Commission needed to help staff look at functions, things that staff did that the Commission did not want staff to do anymore.  He said staff could continue to look at economies like the City Auditor or cut back on take home vehicles.  He said those were small things, but they added up. 

He said regarding WRAP funding, in the recommended budget, he did something he did not like to do, but did, which made recommendations against what the Special Alcohol Advisory Board made as to how to allocate the special alcohol tax dollars.  He looked at the funding opportunities that some of those agencies had independent of the City and made recommendations to reallocate the funding and put $250,000 of the WRAP funding in the Special Alcohol and took it completely out of the general fund.  It was a reduction in how much the City would budget for WRAP in 2008 over what it was budgeted in 2007.  In 2007 the City had $250,000 in WRAP funding in the general fund and a $100,000 in Special Alcohol.  He said it was his understanding that there was going to be a challenge at the school district level to continue funding WRAP.  He thought it was an important policy issue for the City Commission to discuss, to see if the City Commission wanted to fund wrap if the school district was not going to fund that program.

He said the City Commission received information regarding pool fees and additional information on scholarship funding for the pool system.  Staff provided the City Commission with an option that they understood the City Commission wanted to look at which was to increase pool fees to $3.00 rather than $4.00.  He said that left them approximately $47,000 short in revenue from what the Recreation Fund would be to sustain the 2008 budget.  He said that amount could be funded through a mill levy.  There was tax money that staff used judiciously in maintaining the parks system, but $47,000 could be taken from that fund and not make one of those improvements as an alternative.  He said they could also look at reducing the hours of the facilities to give back that revenue amount.   

He said with the fund balance, staff only had to worry about that balance when there was not a fund balance.  He said people that buy the City’s debt, looked at fund balance very rigorously and staff wanted to be very cognizant of that fact so staff threw out warning signs for the 2009 budget discussions.  

He said the other item was infrastructure improvements and when setting out the capital improvement budget it did not include everything that might be a potential item for infrastructure and there was not a contingency for infrastructure.  The City had an economic development project that needed to be talked about rearranging.  He said Commissioner Chestnut’s comments would be very helpful on how they might analyze the potential occupancy at the Riverfront Mall.  He thought it was important they moved forward on the Police Evidence Storage Facility.  He said in his opinion, aside from some of those mill levy adjustments that were essentially trying to keep the status quo, he thought they under funded the Bond and Interest Fund because they were barely at 7 mills.  For a community of this size and the City’s ambitious desires for growth to spend $5 million a year on capital improvements was not saying a lot, especially with construction inflation.  He recollected back to the 1990’s when staff did a substantial overhaul of their capital improvement budgeting and debt financing and set the mill levy at 9.  Setting the mill levy at 7 mills might buy the City more than 9 mills did back then, but when looking at the community’s commitment toward infrastructure and how they wanted to invest in a community, the City was spending less now than in the 1990’s.  He said the City had a long list of projects which some people called a wish list.  He said he did not like construction cost inflation anymore than anyone else.  He said it was frustrating even in doing a small project because it seemed to be cost prohibitive and was the reality of construction.  He said he did not like raising property taxes for all of those reasons and the Commission might want to look at alternative revenues as well.  He said a number of other Kansas communities were doing the same.  He said Manhattan was going to vote on a $40 million bond issue for a number of infrastructure and outdoor recreation facilities.  Manhattan also recognized their City wanted to make investments and sometimes when times were tough that was when to make investment.  He thought it was important for the community to continue to make investments, but unfortunately that meant additional resources needed to be raised.  If that was not palpable, staff needed direction on what things the City Commission did not want staff to do anymore. He said staff continued to look at efficiencies and were continuing to make progress. 

He said he understood the consensus of the City Commission, so far, was to publish a budget summary that had a .4 mill increase with the Transit Fund which would reduce transit hours to 6:00 pm in calendar 2008.  Eventually, he would need a motion to publish the budget.  He said they could just look at the general fund as well and the recreation fund was the pool fee issue and that might be the next one to work on.

Mayor Hack said hindsight was absolutely outstanding, but one of the things that was done wrong was not making incremental increases along the way with the pool fees and now they were faced with operational costs that were higher than current revenue could sustain.  For that reason, it put the Commission in a bad situation.  She said Corliss had a good point about the possibility of rather than the jump to $4.00, looking at children, teens, and seniors at $3.00 and adult fees at $4.00, but be prepared for this incremental increase.  She thought staff needed to make the decision and recommendation because in a sense, this might be micro-managing because the Commission did not assess the fees for dance classes and the use of the facilities at the depot, but all of a sudden the Commission was deciding the pool fees.  She said she was not saying the Commission could not have discussions on those types of issues from time to time, but staff knew what they were doing and what they needed.  If staff was charging $10.00 at the pool, then the Commission would weigh in on that decision, but again she thought staff should be handling the pool fees.

Commissioner Amyx said the current level of charges for the pool had been the same for the past five years.  Last year, the City was going through a time where money was needed and asked what paid those shortfalls last year.

Ed Mullins, Finance Director, said the City had higher fund balances in the previous year.

Commissioner Highberger said characterizing those as shortfalls did not make sense because there was a difference in revenue between the two funding sources because the pool fees did not pay the cost for running the pool.

Corliss said the recreation fund received sales tax and property tax money.  Staff tried to minimize the property tax money going to the recreation fund and with few exceptions; most recreation programs pay for themselves.  The pool did not pay for itself and there was no debt in the recreation fund.  The debt that was paying off the Indoor Aquatic Center was all in the Bond and Interest fund.  Staff was not trying to charge fees to pay for the debt, but show some equilibrium in the recreation fund as far as far as the cost of operating the facility.  Staff looked at other communities and there was not a good way to get at this issue.    

Commissioner Chestnut said he would support the alternate option of a $3.00 pool fee for children, teens and seniors and the adult fee up to $4.00, and basically increase the transfer of sales tax by $47,000.  It made a zero mill levy increase, but there was some legitimate issues highlighted by Commissioner Highberger and others.  He said those fees were some place in between and the Commission would need to continue to review those costs every other year versus other communities.

Commissioner Highberger said he agreed with Commissioner Chestnut.  He said he would like to have the pool fees a little lower.  He would be happier to add the mill levy than hit that fund again.

Commissioner Amyx said in the City Commission’s study session, at that time most of the Commissioners felt that $4.00 was too high.  He said he concurred with the $3.00 pool fee for children, teens and seniors.

Vice Mayor Dever said he was disappointed the City would lose $46,000, but with other recreation opportunities he agreed $3.00 and $4.00 would work.

Commissioner Amyx said he supported the sales tax transfer of $47,000 rather than the mill levy increase.

Corliss asked if the Commission wanted to look at pool fees on an annual basis.

Hack said no.  She thought pool fees did not need a lot of discussion, but it did not mean those fees were not important.  She said she had confidence in staff to make those types of decisions.

Corliss said in the general fund, he recommended a 0.32 mill levy increase, a 2% wage adjustment for City employees, and a 16.5 fund balance.  He said there might or might not be a relationship on how to fund the WRAP program.

Commissioner Highberger said he supported the City Manager’s recommendation especially because they were asking City staff to work harder with the recent on-going cut backs and was a wrong time to not provide a cost of living increase.

Commissioner Amyx said he agreed with that positive recommendation.  He said it was pointed out a couple of years ago, City employees had to go without any type of wage increase.   

Mayor Hack said she agreed.  She said she could not imagine not giving staff a wage adjustment.  However, she wanted to take a look at the total compensation package with regard to merit increases.  She thought it was important to look at the total package to make sure the City was competitive, not over generous, and doing the right thing with that compensation package.

Commissioner Chestnut said he would prefer to keep the mill levy steady and he wanted to preface his comments with a little bit of background.  Essentially, the City’s general fund from 2004 to the proposed budget in 2008 had grown at a compound rate of 8.5%.  It was 14% from 2004 – 2005, 14% from 2005 – 2006 and had definitely gone up significantly.  He hated to put it in the context of not a wage increase or a wage increase.  He would like to find other ways to find that ability to keep it steady.

He said secondly, it was important to understand for the public that when talking about a general wage increase, they were not talking about all the increases.  There was another 1.5% for merit increases.  There were two pools of personnel funds proposed: a pool of a general wage increase of 2% that applied to all employees and another pool of funds that made them eligible for 2.5 – 5% merit increase.  There was the possibility and the probability there were some people that would get a 7% increase.  He thought the memo stated no general wage increase would affect the 30% of the employee base that were at the top of the range.  He thought that needed to put it in perspective.  He said he would like to come up with a 2% general wage increase and would like to come up with another $300,000 or $400,000 someplace else to have a zero mill on the general fund.  If that was not one of the options, what they were deciding was setting the maximum, so he would support the option of zero mills from a de facto point.  He would like to figure out a different way to get there between now and when they finalized the budget.

Mayor Hack said that was an important point in terms of whether there were other ways to move funds around. 

Vice Mayor Dever said he agreed with Commissioner Chestnut’s comments and would support the Option 1 of a zero mill levy increase.  He felt in tough times, everyone needed to work together to reduce expenditures and knew there were other options for city employees who deserve much more to be compensated in other ways.  He wanted to hold down the increase as much as possible.

Mayor Hack said she believed 2% needed to be across the board and the merit increases would be a topic for conversation that might be implemented in 2008.  She was concerned about fund balances and thought the Commission needed to be careful.  If they did not raise the mill levy, they could get themselves in trouble and did not think that a 0.32 increase for wage adjustments was too drastic.  She supported the 0.32 mill increase.  She said if they could find alternate sources, she would support that. 

Corliss said he wanted to acknowledge Commissioner Chestnut’s help.  They had good discussions where they looked at a number of those options and to some extent, it came down to take now or pay later depending upon philosophy as far as some of the different expenditures when looking at maintenance, health care fund retained earnings, and different policy options. 

He thought it was important to point out the general fund had grown and was asked to add a number of programs, both internal and external.  The City had added a number of positions in the Police and Fire Departments and how that had built into the base of the budget.  He said when looking at 2006 actual expenses in the general fund versus 2008 projected expenses, it showed over that period, less than a 5% increase was projected.   

Commissioner Chestnut said they had that discussion and it was important to understand that the request he made was to get much more of an understanding of how they had that growth.  He understood the School Resource Officers in the Junior High’s, Traffic, Fire, and Detectives and those jobs were needed, but that was not the question.  It was getting at what happened because some of that came off of federal funding that hit the City in 2004 and 2005.  The City rode with federal funds for three years and then had to pony up for it.  It was really more the context of where they had been and where they were going.  The reason he had concern was they had to put this in the context, even at the City Manager’s recommendation; they were at a $1.4 million deficit spending for 2008.  They still had a ways to go and had to make that rebalancing and did not happen in one cycle.  He said we either get more revenue growth or continue to chip away at this dilemma.

Corliss said he understood that Commissioners Amyx, Hack, and Highberger supported 0.32 mill levy increase for the General Fund.

Mayor Hack asked if the Commission should talk about the WRAP program funding and the School Resource Officers (SRO).  She said to give some history, the WRAP program from Bert Nash was something she strongly supported as a classroom teacher, at that time, and felt that it was a program that truly helped young people in the community.  She said that was why having a conversation about it was so difficult because she knew the good work of the WRAP workers, but also was looking at it through another set of lenses with responsibility to the entire community.  She struggled with the fact the City and County funding recommendation was present, but it did not appear there would be a funding recommendation from the school district.  She said if it was not a program that was going to be financially supported by USD 497, due to their budget situation, the City needed to seriously look at other ways to use that alcohol money and still fall in the parameters of the prevention component of those dollars.

She thought there could be a good case made, since she worked with SRO’s as well, that those officers did perform a function not only in the classroom, but outside and those officers also worked tirelessly in the schools for alcohol prevention and thought there was a valid case for that money being used to fund the SRO’s.  There might be the possibility of the wage adjustment without the mill increase because they would have some officers funded.

Commissioner Amyx asked if Mayor Hack was suggesting at this time that WRAP remained contingent upon funding by the school district or was the WRAP funding done.

Mayor Hack said she did not think the school district was going to fund that program and was not a program the City could take on.

Commissioner Highberger said he wanted the record to reflect that he was on the Bert Nash Foundation Board, and he did not think being on the board qualified as a conflict of interest.  He said he was not going to object to cutting out $100,000 of the previously allocated money to WRAP because the Commission needed to make some compromises.  He said regardless of the school district’s decision cutting the WRAP funding was a real mistake.  Everything he had heard from the program indicated that it saved the City money by being available in keeping kids off the streets, out of juvenile detention and thought there was solid evidence the program worked.  With the WRAP program in place, when hearing about a school shooting, they could say that it was almost certain that it was not going to happen in Lawrence because there was good evidence the WRAP program might have intervened in a school shooting in Lawrence.  Even if the school district did not fund it, with the County and City money allocated, they could not serve the entire school system.  He thought it was one place where it would be a real mistake to cut.  It was one of the things that made Lawrence stand out as a place to live.  He thought it was something that was a great benefit for the children.

Vice Mayor Dever said the WRAP program decision was difficult.  He said if the program was so valuable and important, he asked why the school district could not find $100,000 to help the program. 

Commissioner Highberger said that was a fair question.

Commissioner Chestnut said what Mayor Hack was talking about was the School District was not just coming up with the difference of what the City would cut, but the School District was talking about not funding the program at all.  Last year, the allocation was $350,000 from the School District, $350,000 from the City, and $225,000 from the County.  It was a million dollar program and what the City put in with $200,000; the county was at $225,000.  That program, if they cut it out completely, would be cut in half or more.  He agreed with Commissioner Highberger that he believed in the program, but if the School District did not believe in it, he was challenged to have the City Commission believe in it.  He thought the School District needed to be the lead in this program because it was almost exclusively in the schools.

Commissioner Amyx said he remembered a year ago that it was explained how important this program was and he agreed.  He said the City Commission needed to establish the level of funding because the City Manager needed to publish this budget, and he suggested leaving in the funding for the WRAP program, but making the funding contingent upon the School District coming through with their end of the financing.  If they did not come up with their portion of funding, he suggested going to the backup plan of the Mayor for the funding of the SRO’s.

Commissioner Chestnut said he was absolutely in support of SRO’s because he had a 15 year old son who had a great experience at Southwest Junior High with the SRO.  He said there was never a question about funding the SRO’s, but the funding would be moved from the General Fund to the Special Alcohol Fund.

Mayor Hack said they were moving $250,000 of that funding. 

Commissioner Chestnut said it was close to 4/5 of the funding.

Corliss said what was in the recommended budget was $250,000 in funding in Special Alcohol Funds for WRAP.  He said they could transfer Special Alcohol Funds to the General Fund for the express purpose of funding SRO’s, but it would not fund all those officers.  

Commissioner Chestnut said he had two discussions with the leader of Bert Nash about the WRAP programs and he was always under the assumption the School District would fund their piece.  One question about this issue was if the leader from Bert Nash realized the situation would he even really think he had a program to run at a funding level that was 40% of what he had.

Mayor Hack said they could eliminate the program perhaps at the elementary level, but keep it at the secondary level.

Commissioner Chestnut said it might be incrementally reduced.  He said he was in support of the backup plan, but they needed to wait for further clarification.

Mayor Hack said with the infrastructure funding, she was thinking more in terms of Public Works.  She said there needed to be conversation about the City’s capital improvement budget and funding it at the level the community needed to.  When the City Commission had their study session, they discussed the compensation package for employees, merit increases, the reserve level for the Health Care Fund, impact fees, City and County funding issues and partnering on some and not others, and long term/long range plans for transit.  She said they danced around the sales tax issue and it was time to have some serious conversation as to whether or not that was something they wanted to do. 

Commissioner Amyx said it was important to bring the budget and mill levy in at zero.  He said during public comment, concerns about various programs were heard with the Commission supporting those various programs at different levels.  In the general fund, a 0.32 mill levy was discussed, and transit was a 0.4 mill levy increase.  He said those mill levy increases would be taken into consideration only if they were going to have a serious discussion about sales tax or another revenue source that could take care of the large infrastructure improvements, specifically dealing with street department, sidewalks, and those kinds of things.  If the Commission was going to continue to look at services within the City’s budget, whether it was transportation or recreation, the City would need additional revenue sources to continue to work at the current levels. 

If the Commission wanted a 0% increase, it would take $647,000 in General Fund expenditures reductions.  He said they looked at the street department funding at $2.395 million and that amount could be reduced by $647,000 and still be at a level of $4.8 million.  If they were going to have the discussion about sales tax or another funding source for next year, they would have the opportunity to visit about expanding the program only out of another pot of money.  He knew the Vice Mayor was looking for a way to help expand those hours if possible, but there were other ways to expand those hours.

Commissioner Highberger said the way they helped to ensure prosperity in this town was by providing good infrastructure, a high quality of life, and providing some degree of a social safety net.  He said he was willing to support moving forward with a public vote on the sales tax proposal, but he was not willing to cut back on this year’s street maintenance budget.  He said Commissioner Chestnut pointed out the City’s total revenue and expenditures had grown over the years, but the City had grown over the years too.  He said even if adding inflation, and multiplying that inflation by the percentage growth in population, the City’s revenue growth was a little ahead.  He said he was willing to support moving forward with the sales tax proposal provided they also, prior to that, consider impact fees.  He said existing Lawrence taxpayers were already shouldering the cost of growth.  He said they needed to find a way to make those costs shared more equitably.  He did not think an impact fee system would take away all the difficulties the City was looking at now, but would put the City’s capital budget at a place where the City Manager would like it to be.

Commissioner Chestnut said he had to make comments on the cost of growth.  He agreed there were some issues.  The reason he made the comments on the General Fund was he did not know if he completely agreed with Commissioner Highberger’s analysis on the cost of growth.  He thought what happened was they had substantial growth, built significant fund balances, and that enabled the City to expand services to the entire City.  If looking at outside agency funding, in two years, it had gone from $600,000 or $700,000 to $1.6 million which was a full mill.  The same thing was true about the Student Resource Officers, but that was a service provided, but there was some argument about who should pay for those officers, but the bottom line was they could step up to the plate which was about a 0.3 mill increase.  He said they were able to expand the services to serve the citizens of Lawrence.  Regarding the discussion around impact fees, he thought there needed to be a discussion about what impact fees were meant to be, and what was to pay for those impacts that were created on those specific things.  There seemed to be this mix of the fact that to use the impact fees to pay for some growth that happened in the past or costs that were there, he did not agree with that view.  He thought it was an issue the Commission should discuss.  He thought it needed to be fair to the people who were going to pay those fees to make sure they saw where that money was going.  There had been comments on previous Commission’s about other communities that had used those impact fees.  The fact was they used those fees to build infrastructure ahead of growth and Lawrence was not in that case.  If they were going to make the argument they were going to do it in order to pay for what they thought was the cost of growth in the past, he could not get on board, but he believed the Commission needed to talk about it and figure out how to make it work. 

He said with the sales tax initiative, he agreed with Commissioner Amyx regarding treading water on the City’s infrastructure.  He did not think within the General Fund or other funds the City would get ahead of the curve and the City needed an additional revenue source.  The only thing he wanted to have a dialogue about was the half cent sales tax amount and whether this put this City in a similar category with surrounding communities.  He said a good portion of the sales tax needed to be toward infrastructure and the Commission needed to discuss whether they called it economic development and it was not about funding anything other than more infrastructure to develop business, which meant getting industrial land ready to go and other things.  He said they could look at specific projects and say there was $1 million dollars if City services were to that point to get economic development going.  One of the things they were faced with now was if the City did receive a significant project, the City would be challenged to fulfill the commitments the Commission made because it was going to have to come from capital improvement budget.  He said the City was probably under spending now. 

He said another issue was the consideration in the entire fund.  If the City was able to stabilize the General Fund, mills should be moved over to the Bond and Interest Fund because one of the things Ed Mullins had not highlighted was that if they spent $5 million a year in the City’s Bond and Interest Fund with current rates, the City would have depleted another $3 or $4 million out of that fund and in 2011 or 2012 they were going to be in the same situation they were with the General Fund, which was they were right down to under $1 million in that fund.  There were a lot of moving parts, but he thought they needed to talk about this issue and infrastructure needed to be a big part of the discussion.  He said after infrastructure was discussed, he wanted to discuss economic development.   

Vice Mayor Dever said in his travels he was able to talk to a lot of people about impact fees.  He said impact fees came up during the City Commission election and he was dead set against impact fees because of some of the things he had read about with misuse, misappropriation of funds, and using those fees as a crutch to drag more fees into the City where the City grew and spent the money down and the impact fees were not used for their original purpose.  He said he talked to some people about positive ways to put impact fees in place and he would be in favor of discussing reasonable alternatives, but not for some giant slush fund some cities liked to do and using those funds at will.  He said with specific uses and purposes, he could see a need.  He said if that was what it took to move forward, he would be willing to support the City investigating appropriate actions.  He said as far as sales tax increase, if some of the money was used for economic development and increasing job growth and/or the ability for Lawrence to compete with surround cities, he thought it was important. 

He did not know if there was going to be enough money in the half cent sales tax, but a half cent was all he could swallow and he did not want to put the City out of the contest as far as sales tax dollars.  The City was already at a disadvantage with the number of choices locally and adding too much more would put the City further out of the game.  He said as long as the tax might involve economic development and would not exceed a half cent he was in favor of moving forward.

Mayor Hack said this discussion was exactly what she hoped would happen in terms of opening the discussion regarding sales tax.  They did not want to put the City in a position where the City priced themselves, sales tax wise, out of some purchases in Lawrence.  They did not want to put additional burden on Lawrence citizens, but they also knew there were needs that were not being chipped away at fast enough.  The best things she saw in terms of the information from the Public Works Director about street maintenance, the City was not moving up in how their streets were taken care of, but trailing downward.  It would take a large infusion of money to get infrastructure up to where it needed to be.  She thought streets and infrastructure told a story of a community and how much people cared about their community.  If seeing decaying infrastructure, it would be telling anyone coming to Lawrence that people did not care about Lawrence, but that was not true. 

She agreed with Commissioner Chestnut that if they could dedicate a portion to get the City positioned so the City had the land it needed, the infrastructure to that land, and the needs met so should a project want to come to Lawrence, Kansas, the City needed to act quickly.  She said what she was hearing from the Commission was the need for conversation about a sales tax and it appeared the Commission seemed to feel comfortable with the half cent.  She said Commissioner Chestnut and Vice Mayor Dever had not participated in the fiscal impact of growth studies.  She said during the September study session, the Commission could bring everyone up to speed on the different options.

Commissioner Highberger said he had some concerns about the City’s level of reliance on sales tax fees versus property taxes.  In part of that discussion, he would like the Commission to look at a comparative and look at how the City shifted over the years in comparison to other jurisdictions and see how Lawrence stood because he was afraid the tax structure was getting more and more regressive.  He did not see a way to get the kind of money the City needed to address the street and sidewalk problems without a big infusion. 

Mayor Hack said she appreciated that because having served with Commissioner Highberger for four years, the issue of a sales tax increase was not at the bottom of his list, but was hovering.  She said if the City was going to make a dent in shifting that burden from residential to industrial and commercial, the City needed the tools to do it and that meant the land would need to be ready to go. 

Commissioner Amyx said he was ready to have that discussion about impact fees and thought it was time.  He asked if the Commission was comfortable with a mill levy increase for 2008 to be published.

Mayor Hack said that would be a total of 0.746.

Commissioner Chestnut said he was not comfortable with the general fund at a 0.32 mill levy increase because he liked Option 1.

Corliss said it did not mean that mill levy could not be lowered, but it could not be raised.

Commissioner Chestnut said as far as he would go was a 0.425 mill levy increase for Transit, but that took a consensus of the Commission.    

Commissioner Highberger said he did not really like it but would be willing to consider putting back the mill the City took out two years ago. 

Commissioner Chestnut as far as publishing the budget, the Commission was going to receive some clarification on WRAP program.

Corliss said he asked the School Superintendent about WRAP funding and the superintendent indicated that WRAP was not going to be funded anymore.

Mayor Hack said the budget could be published at 0.32 increase for the General Fund with the understanding that if the Commission received confirmation on the WRAP funding which she thought the confirmation would be that the School District was not going to fund the WRAP program next year, then that would take up that wage adjustment, which was the increase in the General Fund assuming they transferred some expenses from the General Fund to the Special Alcohol Fund while still remaining true to what the requirements were for the Special Alcohol Fund. 

Vice Mayor Dever said it still did not touch upon the deduction in the General Fund and where that money was going to come from.  The Commission was authorizing with the option to add the mill levy for the 2% wage increase and was also authorizing spending down the General Fund and using money from the General Fund.  He said that would be the lacking component from not raising the mill levy.  He said they had to find that money or agree to spend down the fund balance as well. 

Commissioner Chestnut said essentially what they were doing was taking down the General Fund, they would actually lower the mill levy in the General Fund and have the 0.42, so they would have to lower 0.42 in the General Fund and increase the Transit Fund 0.42 mills.  The way they were going to do that in the General Fund was to drop $600,000 or $700,000 out of Street Maintenance, which would allow funding the 2% wage increase and end up at the finish line with zero across the board. 

Corliss said it would roughly be at the 16.5% fund balance.  In the budget, one of the concerns was with that, they were adding to the base of expenditures on the salary side and not adding on the revenue side.  Commissioner Amyx proposed taking out that expenditure on street maintenance with the plan to eventually make that up through a different revenue source.

Mayor Hack said she did not think it was fiscally responsible to increase expenses without a comparable increase in revenue.  That increase in revenue, in her estimation right now, had to be what the City could do right now as opposed to what they hoped to have happen later on.  One of the reasons the City was in this situation was they thought the City could survive on a lower mill levy, hoped the fund balances would be regenerated, and hoped the ad valorem taxes would continue to increase, but that was not true and she did not want to put the city in a deeper hole.

Commissioner Chestnut said just for perspective, they were taking about $647,000 divided into the total street maintenance from all the funds was $5.4 million.  They were talking about a little bit greater than 10%.  He agreed with the Mayor from the standpoint of the dynamic.  The only issue he had was whether it was 5.4 or 4.6 or whatever it was, he understood they would be going down a little bit sliding, but where they were at now, they were never going to get to the finish line.  They were out of the General Fund without another source of revenue and would never get past this.  He said he would like to strive to see what they could do to keep the mill levy steady.  The issue he had was if WRAP dropped out, they were talking about something that came back in the equation.

Commissioner Amyx asked for the sake of publication, fund the SRO’s and with the WRAP situation that would take care of the police officers and they would end up with a zero increase in the General Fund.

Corliss said it would work.

Commissioner Amyx said he was trying to get to zero.  In the Public Work’s budget on street maintenance they were having a transfer from sales tax reserve funds of $850,000.  He asked if they could take that expenditure and move it into the 0.425 for the Transit System.

Mayor Hack said they were reducing the amount of street maintenance; it was coming out of the sales tax reserve.

Mayor Amyx asked if that could be done.

Corliss said yes, they could.

Mayor Hack said the end result was they were still reducing the amount of money for Public Works and they had not come up with a revenue generating source to do this next time and no way next year to take care of that expense. 

Corliss said and budgeting less for street maintenance in 2008.

Commissioner Amyx said he did not think they could get a sales tax to pass at the same time they had a property tax increase. 

Commissioner Highberger said it was pretty clear, at this point, every dollar spent on street maintenance saved the City money in the long run.  He said it was irresponsible to cut street maintenance and gamble on the sales tax passage.

Commissioner Chestnut said he would like to figure out how to get to a 0% sales tax increase.  If they were going to discuss WRAP funding, which looked like that funding would drop out, that was a contributing factor.  He did not have an issue with the $600,000 level to take down street maintenance to whatever it needed to.  He said he did not have an issue the other Commissioners had relative to foregoing this, this year and it was essentially a permanent deferral.  He said he understood that 0.425 was the absolute minimum they had to do in the transportation and would like to find some way to get to zero.

Mayor Hack asked if Commissioner Chestnut would favor a budget that published a 0.425 maximum mill increase.   She said she would like maintaining the spending in Public Works and thought the Commission would be making a mistake if they did not.  She said she would concur with the consensus of the City Commission regarding the “T” and 0.425 mill levy and strongly supported a 2% wage adjustment.  If that could be done through a transfer of funds the SRO’s came out of that would be fine, but they needed to be safe by publishing the 2% for the wage adjustment for the 0.7 mill levy increase, with the hope when moving through this with the WRAP funding and perhaps some movement of other things, they might not need to do that.  She thought they should publish what they needed at the extreme and did not think a 0.7 mill increase when they considered they have reduced them was comfortable with it.

Commissioner Chestnut said published, he would go for 0.425 mill levy for Transit Fund and no increase to the General Fund.

Vice Mayor Dever said he agreed with Commissioner Chestnut. 

Moved by Chestnut, seconded by Hack, to authorize the publication of the 2008 Budget Summary to include a 0.425 mill levy increase for the Transit Fund, no mill levy increase to the General Fund with the understanding of a 2% wage adjustment, and establish August 7, 2007 as the public hearing date.  Aye:  Amyx, Chestnut, and Hack.  Nay: Dever and Highberger.  Motion carried.                                                                                                                   (18) 

FUTURE AGENDA ITEMS:

7/31/07	●     No City Commission meeting (5^th Tuesday)
8/7/07	●     2008 Budget Hearing and adoption of 2008 budget
8/14/07	●      Special Use Permit information for Alcohol Establishments and Entertainment Venue Ordinance

Moved by Chestnut, seconded by Amyx, to adjourn at 11: 10p.m.  Motion carried unanimously.                                                                                                                                                                                                                                    APPROVED                                                                                                                                        _____________________________

Sue Hack, Mayor

ATTEST:

___________________________________

Frank S. Reeb, City Clerk

CITY COMMISSION MEETING OF JULY 24, 2007

1. Payment - P.H.I. Investigative Consultants, Inc. for $26,481.27, Practical Homicide Investigation Seminar.

2. Purchase - 3 Trimble GPS data collectors for $71,355.

3. Purchase - Software House International for $42,701 for Microsoft software maintenance from July 1, 2007 to June 30, 2008.

4. Ordinance No. 7923 – 2^nd Read, Rezone (Z-04-28-05) 12.465 acres, UR to RM12, SE Corner Wakarusa & Eisenhower Drive.

5. Resolution No. 6730 - public hearing date, intersection improvements, 6^th St. & George Williams Way.

6. Engineering Contract - BG Consultants for design of George Williams Way from 6^th St. to Overland Dr., & George Williams Way, Overland Dr. to N. City Limits.

7. Maintenance Agreement - Beacon system, 23^rd St. at E Hills Drive.

8. Letter of Agreement – Consolidation of accesses between CVS Pharmacy & El Mezcal.

9. Variance Request - Section 19-214 of City Code, fire line & water main, CVS          Pharmacy.

10. Release of Mortgage-Darlene Barreto, 218 Alabama; Subordination Agreement-Jeanette   Reiling, 1064 Home Circle.

11. Amendment-Sister Cities Advisory Board bylaws.

12. Purchase- Property interests, construction Stoneridge Dr., So f W. 6^th, for $26,000.

13. Appoint – May Davis to Public Transit Advisory Committee

14. City Manager’s Report.

15. Public Hearing- Edward Byrne Memorial Justice Assistance Grant application.

16. Request- Thomas Fritzel, downtown redevelopment opportunities.

17. Staff Report - 2008 budget.

18. Public Comment.

19. Future Agenda Items.

20. Commission Items.