Memorandum

City of Lawrence

City Manager’s Office

TO:	Dave Corliss, City Manager
FROM:	Cynthia Boecker, Assistant City Manager Casey Toomay, Budget Manager
CC:	Diane Stoddard, Assistant City Manager Ed Mullins, Finance Director
DATE:	July 23, 2009(revised 7/27/09)
RE:	2010 Budget – Notice of Public Hearing

Please place the following item on the agenda for consideration of the City Commission at their July 28, 2009.

Staff requests the City Commission authorize publication of the notice of budget (revised 07/27/09) hearing to be held August 11, 2009.

Budget Calendar

Under K.S.A 79-1801, the governing body shall certify the amount of ad valorem tax to be levied on or before August 25. K.S.A. 79-2929 states that prior to filing the adopted budget, a public hearing must be held and that notice of the hearing must be given at least 10 days prior to the hearing. Pursuant to K.S.A. 79-2933, the hearing required to be held on the annual budget “shall be held not less than ten (10) days prior to the date on which they shall certify their annual levies to the county clerk as required by law.”

Outlined below is the remaining process for adoption of the 2010 Budget that complies with the State budget statutes.

City Commission Direct Publication of Notification	July 28
Notification Documents to Lawrence Journal World	July 29
Publish Notification	August 1
Public Hearing	August 11
First Reading of Budget-Related Ordinances	August 11
Second Reading/Adoption Budget-Related of Ordinances	August 18
File Budget with County	August 25

Notice of Public Hearing

The required budget summary/notice of public hearing document will set the upper limits of the 2010 budget and the mill levy. Once the summary is published, the budget cannot be increase, nor can the mill levy.

The attached notice includes the City Manager’s recommended budget, which maintains the total mill levy at 26.688 mills.

Highlights of the City Manager’s Recommended Budget

The City Manager’s 2010 recommended budget now totals ~~$157,246,396~~ $157,260,736 of expenditures in all funds. This is supported by $164,457,707 of resources. The recommended budget maintains appropriate fund balances pursuant to City policy goals and state laws.

The recommended budget includes increases in many fees and charges for service, some of which are highlighted below:

General Fund – The recommended fee increases include the fee charged to Grant Township for the provision of City fire services and the fines and fees charged for violations in Municipal Court. Changes to Municipal Court fines and fees were approved by the City Commission on July 14.
Recreation Fund – The recommended budget includes increases in parks and recreation fees, including new fees for admittance to Prairie Park Nature Center and the South Park Wading Pool. All increases were approved by the City Commission on July 14.
Water and Wastewater Fund – The recommended budget includes an increase in water and wastewater charges of $0.69 to $1.43 for approximately 44% of residential customers depending on usage. These recommended increases are less than included in the budget as originally presented to the City Commission and reflect a reduction of approximately $1 million in expenditures in the utility funds. The total recommended increase in utility rates is now 4.4%, reflecting no increase in wastewater rates and a 10% increase in water rates. These reductions are included in Option C in the attached memo from utilities staff. As previously discussed, a significant portion of the growth in rates can be attributed to the continuing commitment to pay the debt for the recently completed expansion of the Clinton Water Treatment Plant.
Solid Waste Fund - The budget includes a $0.66 rate increase for residential customers and $0.96 rate increase for minimum commercial customers. The division has experienced several years of significant increases in equipment costs due to emissions regulations (2007 and 2010) and the increasing costs of fuel and metals.
Public Parking Fund – The recommended budget includes increases in parking fees and fines as approved by the City Commission on July 14.
Golf Course Fund – The budget includes revenue from increases in green fees and other golf course fees, all of which were approved by the City Commission on July 14.

The recommended budget does not include funding for any new positions in 2010. In fact, the recommended budget eliminates the following positions:

· Two vacant Planner positions in the Planning and Development Services Department;

· Two Code Enforcement Officers and an Administrative Support position that were included in the 2009 Budget but not filled because expansion of the rental registration program has not occurred to date;

· 2.5 positions in the Human Relations Division of the Legal Services Department. This will result in the lay-off of two current city employees;

· One vacant Maintenance Worker in the Forestry Division of the Parks and Recreation Department; and

· Seven vacant positions in Utilities - Water System Manager, Water Process Specialist, Utility Field Operations, Management Analyst, Project Engineer, Inspection Supervisor, and Water Quality Technician. This reflects reduction of two additional positions over the budget originally submitted.

The recommended budget ~~does~~ now includes a 1% 1.25% merit pool for employee compensation increases as well as funding for longevity at the full amount. Payment of longevity remains at the discretion of the City Commission.

The recommended budget includes $7,325,474 for employee healthcare costs. This is an increase of 15% over 2009. The estimated cost to the General Fund in 2010 is $4,150,556.

The recommended budget continues to prioritize maintenance of our city streets. Over $5 million is budgeted for repairs and maintenance to city streets. In addition, it is recommended that $3.6 million of infrastructure sales tax revenues used for street maintenance in 2010.

Action Item

Staff requests the City Commission authorize publication of the notice of budget hearing to be held August 11, 2009.