Memorandum

City of Lawrence

City Manager’s Office

TO:	Dave Corliss, City Manager
FROM:	Cynthia Wagner, Assistant City Manager
CC:	Diane Stoddard, Assistant City Manager Ed Mullins, Finance Director Casey Toomay, Budget Manager
DATE:	November 19, 2009
RE:	Use of Guest Tax Fund Monies

As you are aware, over the course of the year, a number of special events bring additional visitors to the City of Lawrence.  In 2009, these events have included the dam run, the Lawrence Half Marathon, anniversary celebration at the Municipal airport, Ironman Triathlon, Fourth of July Fireworks and the Tour of Lawrence, which all resulted in additional City expenditures for personnel, overtime and maintenance in the police, fire, public works and parks and recreation departments.                

The transient guest tax of five percent is levied upon gross receipts derived from or paid by transient guests for sleeping accommodations in hotels and motels within the City.  A review of use of guest tax funds by other cities indicates use for support of economic development and tourism.  For example, Shawnee includes tourism funds to support their Old Shawnee Days celebration and Topeka transfers guest tax monies to support parks and recreation, historic preservation and general fund activities.  Staff believes such support also includes costs relating to providing for public safety, health and welfare. 

Based on staffing and cost estimates related to services outlined above, it is recommended that $36,031 in expenditures be reclassified from the general fund to the guest tax fund for operating department costs as outlined below:

                   Police                     $   7,867

                   Fire/Medical                13,547

                   Public Works               13,880

                   Parks and Recreation        737

                                                $ 36,031

The reclassification will require a reduction in the budgeted transfer from the Guest Tax Fund to the Guest Tax Reserve fund in 2009.  The $154,500 budgeted transfer would be reduced by $36,031 to fund the expenditures outlined above.  It has previously been recommended that the transfer be reduced by $100,000 to provide funding toward the rehabilitation of the Carnegie library.  After both adjustments, the transfer to the guest tax reserve fund would total $18,469, compared to $150,000 transferred in 2008, $48,750 in 2007, and $46,150 in 2006.  The 2010 budget includes a transfer to the guest tax reserve fund of $375,988. 

Action Recommended/Requested

It is recommended that $36,031 in expenditures be reclassified from the general fund to the guest tax fund for operating department costs.