Memorandum

City of Lawrence

City Manager’s Office

Date:	July 25, 2007
To:	David Corliss, City Manager
From:	Casey Liebst, Budget Manager
CC:	Debbie Van Saun, Assistant City Manager
RE:	City Commission Items Related to Adoption of the 2008 Budget

Please place the following items on the City Commission agenda for consideration at their August 7, 2007 meeting:

Public Hearing for proposed 2008 Budget

Per action taken at the July 24, 2007 City Commission meeting, notice of a public hearing to be conducted on August 7, 2007 was published on July 27, 2007 in the Lawrence Journal World. The purpose of the hearing is to answer and hear questions of taxpayers relating to the proposed budget and for the purpose of considering amendments to such proposed budget. The publication of the notice of budget hearing and the accompanying budget summary establishes the maximum limits of the 2008 budget. Therefore, the City Commission may make changes, as appropriate, subsequent to the public hearing that would involve lowering, but not raising the expenditure levels of the published budget summary.

Following the direction of the City Commission, the City Manager’s recommended budget was adjusted as follows:

o the mill levy supporting the Public Transit budget for 2008 has been set at 1.171 mills, an increase by .425 mills over this year’s levy

o the mill levy supporting the General Fund budget for 2008 has been set at 14.869, no increase over this year’s levy; the General Fund budget was reduced by $250,000 with the understanding that the City Commission was looking to fund a portion of existing police officer salaries from the Alcohol Fund; this action is possible if the WRAP program is not funded in 2008

A revised budget projection spreadsheet illustrates the results of this adjustment to the General Fund.

Commission Action: Conduct public hearing for 2008 proposed budget. Approve 2008 City of Lawrence budget, if appropriate, by adopting Ordinance No. 8139 on first reading.

Property Tax Ordinance

Following the provisions of KSA 79-2925b, staff recommends the adoption of an ordinance noting the necessity of appropriating/budgeting property tax revenues for 2008 in excess of that which was appropriated/budgeted for 2007.

Commission Action: Adopt on first reading, Ordinance No. 8140, if appropriate.

Utility Rate Ordinances

Water Service and Sewage Disposal Rates Ordinance. For the year 2008, a 6% increase in revenue requirements for wastewater which incorporates Excess Strength Surcharges (BOD> 350 mg/l and TSS>300 mg/l) is recommended. An increase of 5% for city residents for water service is also recommended (higher rates are recommended for outside city customers.) A table showing the recommended increases for water and wastewater services is attached. Also attached is a table comparing typical monthly bills under existing and proposed 2008 rates for residential, multifamily, commercial and industrial customers.

An increase in the rate for rural water districts and wholesale customers to $2.80 per 1,000 gallons is recommended for 2008 as well.

Commission Action: Adopt on first reading, Ordinance No. 8133, effective November 15, 2007, if appropriate. Approve wholesale water rates, effective November 15, 2007, if appropriate.

System Development Charges Ordinance. For the year 2008, increases in the system development charges for water utility and wastewater utility connections are recommended. A table showing the recommended charges is attached.

Commission Action: Adopt on first reading, Ordinance No. 8134, effective January 1, 2008, if appropriate.

Solid Waste Service Rates Ordinance. The attached study explains the increase of $0.49 monthly per residential customer for solid waste disposal service that is recommended for 2008.

Commission Action: Adopt on first reading, Ordinance No. 8131, effective November 15, 2007, if appropriate.

Pool Fees

The City Manager’s Recommended Budget originally recommended an increase in pool fees for children, teens, seniors, and adults to $4.00 in order to provide sufficient resources for the Recreation Fund in 2008. Per discussion at the July 24, 2007 City Commission meeting, pool fees for 2008 will be increased to $3.00 for children, teens, and seniors while fees for adults will be increased to $4.00. Kids under 3 will continue to receive free admission. This change will require additional sales tax revenue to be transferred from the General Fund to the Recreation Fund in 2008.

Commission Action. Approve pool rates of $3.00 for children, teens, and seniors and $4.00 for adults, effective January 1, 2008, if appropriate.

Transient Guest Tax Fund Policy

The attached draft administrative policy would modify the allocation of transient guest tax receipts. The recommended policy would allocate $12,000 for the Sister Cities program and $150,000 to the transient guest tax reserve fund. These reserve funds would be used for economic development efforts, downtown activities and promotions, other venues that generate sales tax and guest tax dollars for the community, tourism promotion and support services, downtown beautification, support of the National Heritage Area and other items to enhance the visitation industry.

Commission Action: Approve Administrative Policy AP-55, if appropriate.

Utility Fee Waiver Policy

Recently, Tenants to Homeowners (TTH) and Lawrence Habitat for Humanity (LHfH) requested consideration by the City Commission of a waiver of system development charges for both water and wastewater.

The attached memo provides an analysis of this request and a recommendation to deny this request for waivers. Staff finds no legal or policy support for waiver of system development charges and points to the section of City Code allowing for a transfer from the General Fund to the Water and Sewer Fund to offset the cost of these fees. As there are no funds budgeted in either the 2007 or 2008 General Fund budgets for such a transfer, denial of this request is recommended.

Commission Action: Deny waiver of system development charges, if appropriate.