Memorandum

City of Lawrence

City Manager’s Office

 

DATE:

June 17, 2011

TO:

David L. Corliss, City Manager

FROM:

Cynthia Wagner, Assistant City Manager

CC:

Casey Toomay, Budget Manager

Diane Stoddard, Assistant City Manager

RE:

2012 Library Fund Budget

 

Background

In November 2010, voters approved issuance of $18 million debt for a library expansion project.  The mill levy necessary to fund this debt was estimated at 1.5 mills.  Additionally, materials distributed at the time of the election outlined an anticipated increase of 0.5 mill for operations of an expanded facility.

 

2012 Budget Impact

Issuance of the $18 million of debt for construction is anticipated in 2012.  Therefore, the associated 1.5 mill increase needed for debt service is required for the 2012 budget.

 

The Library submitted a request for the 2012 budget for a 0.5 mill increase, or $420,000, for expanded operations.  In addition, the 2012 Library budget request of $3,136,000 includes a 2.5% ($76,000) increase for existing operations.

 

With construction on the expanded and renovated library not anticipated to begin until the spring of 2012, City staff would not recommend a mill levy increase to address expanded operations needs until such time as they are actually incurred.  A mill levy increase would be necessary to fund the 2.5% increase requested for existing operations. 

 

Library Fund

Because the Library Fund is solely reliant on property tax revenues for operations, the impact of decreasing assessed valuation is significant.  As shown on the fund summary, expenditures exceeded revenues in 2007 and 2009, requiring utilization of fund balance to fund the Library’s request. 

 

In 2010, it was necessary to transfer funds previously set aside for the construction of satellite libraries back into the Library Fund to cover operating expenditures.  The remaining reserve funds will be transferred back for operating expenditures in 2011.

 

Due to revenue projections and prior utilization of fund balance, a 0.2 mill increase, generating approximately $164,000, would be necessary to fund their 2012 request for $3,136,000 and leave the fund with a positive ending fund balance.