Memorandum

City of Lawrence

City Manager’s Office

DATE:	June 17, 2011
TO:	David L. Corliss, City Manager
FROM:	Casey Toomay, Budget Manager Tammy Bennett, Assistant Public Works Director
CC:	Cynthia Wagner, Assistant City Manager Diane Stoddard, Assistant City Manager Charles Soules, Public Works Director Jonathan Douglass, Assistant to the City Manager / City Clerk
RE:	Solid Waste Fund for 2012 Budget

A proposed 2012 budget for the solid waste fund and the assumptions used to budget revenues and expenditures are summarized below. 

Solid Waste Fund
	Est.	Budget	Budget	+/-
Revenues	2010	2011*	2012*
Solid Waste Service Charge	$8,116,727	$8,503,015	$8,745,590	2.85%
Roll Off	1,476,318	1,650,000	1,575,000	-4.55%
Extra Pickups, Miscellaneous	684,132	628,600	630,300	0.27%
State Grants		0	0
Interest on Investments	3,549	15,000	5,000	-66.67%
Total Revenue	10,280,726	10,796,615	10,955,890	1.48%
Expenditures			1
Personal Services	5,747,487	6,113,105	6,109,761	-0.1%
Contractual Services	1,974,828	2,922,290	3,009,469	3.0%
Commodities	674,215	779,820	927,710	19.0%
Capital Outlay	815,593	588,200	550,000	-6.5%
Miscellaneous	10	-	-
Transfers / Contingency	909,220	434,025	401,025	-7.6%
Total Expenditures	10,121,353	10,837,440	10,997,964	1.5%

*The total expenditures shown for 2011 and 2012 budgets do not include the transfers budgeted in order to comply with the statutory limit on fund balance.  

Revenues

Miscellaneous charges for service such as extra pickups, recycling sales, and compost sit use are expected to be flat in 2012, and collections from roll-off rental and disposal charges are expected to decrease.  Low interest rates continue to mean reduced revenue from the City’s investments.  As discussed below, increased costs of fuel, landfill charges, and the addition of a glass recycling program are greater than the revenue that would be generated by the existing residential and commercial rate structure.  Therefore, staff is recommending a 2.7% increase in residential rates for 2012. 

The increase is expected to generate an additional $242,575 in revenue in 2012.  Even with this increase, however, total revenues budgeted in the Solid Waste Fund would only be 1.5%, or $159,275, more than revenues budgeted in 2011.  

Expenditures

For 2012, budgeted expenditures are expected to 1.5%, or $160,524, over the 2011 budget.  Changes for the 2012 budget for each category are outlined below. 

Personal Services.  Personal services overall are relatively flat with 2011 budget.  Items increasing in 2012 include unemployment insurance and contributions to employee retirement (KPERS.)  These increases are offset in 2012 with decreases in regular and part-time salaries, as well as overtime.

Contractual Services.  The amount the City is budgeting to spend on contractual services for 2012 is expected to increase by $87,179, or 3%, over 2011 budget.  Included in this increase are the following:

· Landfill charges.  Under the City’s contract with Hamm, Inc., the per ton charge the City pays for landfill service is increasing in 2012.  The 2012 budget assumes the same tonnage as the 2011 budget, but includes an increase of $63,930, or 3.5%.

· Glass Recycling.  Per the direction of the Mayor, staff has included the cost for implementation of a glass recycling program.  As outlined in the attached memo, residents would bring glass to satellite collection bins, which would then be picked up and brought to a central collection site, where a private vendor would pick up the glass and take it to be recycled.  The estimated cost of this program, which was not in the 2011 budget, is $30,000. 

These increases have been offset by decreases wherever possible but primarily in building repairs.  

Commodities.  The 2012 budget includes an increase in commodities cost of 19%, or $147,890, over 2011 budget.  This increase can be attributed to increased fuel prices.  The 2012 budget assumed the same gallons as used in 2010.  However, the increased price of unleaded and diesel assumed for the 2012 budget resulted in an increase of 40.9% for unleaded fuel and 33.0% for diesel fuel.  This increase has been offset by reductions in other commodities including slight decreases in yard waste program supplies, dumpster and polycart replacements, and safety awards programs. 

Capital Outlay. The 2012 budget includes $38,200, or 6.5%, less than the 2011 budget for capital outlay.  The majority of the reduction is in equipment for residential and commercial collections, which has been reduced by $33,200.  The remaining reduction is the result of eliminating funds for repairs to buildings and structures in 2012.