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Archive for Tuesday, May 18, 2010

City facing $1.6M budget deficit

One option to fill a probable budget shortfall is raising water and trash pickup rates for the city.

May 18, 2010

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Even with no pay raise for city employees, Lawrence City Hall is facing a $1.6 million budget deficit in 2011.

Such a hole may cause city commissioners to do something they’ve been loath to do thus far in this recession: Dip into their savings account.

At a Monday afternoon study session, commissioners contemplated passing an unbalanced budget for 2011 in order to avoid either a property tax rate increase or significant cuts to city services.

“This could be the year that we have service cuts the public really notices,” said Mayor Mike Amyx. “I don’t want to say that for sure yet, but it could happen.”

Amyx told commissioners on Monday he likely would be willing to take about $825,000 out of the city’s fund balances — the equivalent of a savings account — to make some service cuts less likely.

Other commissioners, though, said that idea concerned them.

“I’m uncomfortable going forward without a balanced budget until I see something that says we’re in a different trend,” Commissioner Lance Johnson said. “I haven’t seen any signs that says this economy is going to get any better. The really rainy day could be another year or two years from now.”

That left commissioners contemplating possible areas to cut. No decisions were made, but discussion did turn to whether commissioners could afford to fund outside agencies — like service agencies ranging from Health Care Access to The Boys & Girls Club — at historic levels. City Manager David Corliss’ early numbers call for funding outside agencies at their 2010 levels. But some commissioners said they may need to consider reducing the funding.

“I’m just disagreeing that we take outside agency funding completely off the table,” Commissioner Rob Chestnut said. “I don’t think we can take anything off the table yet.”

Commissioner Aron Cromwell said cuts to many nonprofits during a time when the economy is sputtering concerned him.

“I would fight hard against that,” Cromwell said of social service cuts.

In other budget news:

• Prospects of a pay increase for city employees did not appear bright. Corliss built his early budget on the assumption that there would be no pay raise for 2011. This year, city pay raises averaged 1.25 percent for most non-union employees, while members of police and fire unions were eligible for a 5 percent increase.

• Staff members presented a plan that would raise water rates by 6 percent in 2011 and sewer rates by 2 percent. Commissioners were shown a plan where rates could be held steady for 2011, but it would require several major repair projects to be postponed for at least a year.

• Corliss’ early budget numbers assume some bounce back in the economy. Corliss is projecting that sales tax collections will increase by 2 percent over 2010 numbers. Commissioners weren’t entirely convinced that would happen, but agreed to take up the subject in early June when more data are available.

Commissioners must approve a 2011 budget by late August.

Comments

cheeseburger 4 years, 2 months ago

“This could be the year that we have service cuts the public really notices,” said Mayor Mike Amyx. “I don’t want to say that for sure yet, but it could happen.”

And yet we'll have all the money we need for Farmland, the depot, unnecessary crossing signals, and every other pet project that comes before the commission.

• Prospects of a pay increase for city employees did not appear bright. Corliss built his early budget on the assumption that there would be no pay raise for 2011. This year, city pay raises averaged 1.25 percent for most non-union employees, while members of police and fire unions were eligible for a 5 percent increase.

How do you craft a budget that shafts the employees but has provisions for every other little pet project? Unbelievable!

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susanneg 4 years, 2 months ago

right on cheeseburger!

the so called gatekeepers are proven irresponsible!

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Flap Doodle 4 years, 2 months ago

Relax and have a popsicle, susan. It's a cool and fruity treat on a spring day.

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svenway_park 4 years, 2 months ago

Susan is just still p.o.'d at the city for them not hiring him a couple of years ago.

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cowboy 4 years, 2 months ago

Corliss's comments 90 days ago

Other items of note from the year-end report:

• The city’s second largest fund — the water and wastewater fund — finished with revenues $383,000 above expenses. Its fund balance is $13.6 million, at its highest level since 2006.

• The solid waste fund, which funds trash service, continued to lose money. Its shortfall is estimated at $69,000. But Corliss said he was pleased the deficit had shrunk from the $500,000 mark posted in 2008. The department cut its losses by deferring some equipment purchases and leaving several positions unfilled during parts of the year. The fund, however, still has a $2.3 million fund balance.

• The public transit fund finished the year with a $116,000 shortfall. But Corliss said that was largely because the department did not receive a full-year’s worth of sales tax collections. This year, with a full year of the new sales taxes in place, the fund is expected to have a funding surplus of $774,000. The fund is in need of money. Its fund balance finished 2009 at $240,000, its lowest level on record.

• The bond and interest fund — the account the city uses to pays its debts — had expenses that were $840,000 over revenue. Corliss said the city had planned to operate that fund at a deficit in 2009, in part because the account had about a $9 million fund balance. Even with the shortfall, the city still has the capacity to issue about $5 million worth of new debt per year from the fund without increasing the city’s property tax rate, Corliss said.

So the city continues it's happy ride while spending without regard to the end result.

A few suggestions

Fix solid waste , you audited it , ran off the manager , and have not made any structural changes. Increase the commercial roll off rates , cease the yard clippings pickups and reduce the staff accordingly. Pick up brush on a once monthly schedule and provide drop off points. Save 4-500 thousand

Can the auditor , no results of value in two years , save 125 thousand

Fix the T , downsize , right size , raise rates , initiate advertising revenue , have some guts

Cease any expenditures on Farmland , the depot , library , and any other hair-brained eco devo plan that may come before you.

you have a surplus in water funds , no increases

Stop sending all this printed crap in my water bill , put the water billing online without a 3.95 fee , save the postage , envelope , and statement costs.

It's obvious that the city is incapable , with current management , of bringing in an accurate budget. You have increased fees and taxes and still can't make it happen. Learn how to build a annual budget plan , a three year plan , and then run to it . If it's not in the plan don't bring it up . The city needs managers committed to reducing costs each year thru better practices , more efficient process . that ain't happening now nor has it for some years.

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jjt 4 years, 2 months ago

The running of Lawrence is just like any business. At the end of the day the things that we decide we need cost a certain amount of money. It is so simple, cut back or raise taxes. If and when we get to the point where there is no more money in the piggy bank to make up short falls, then guess what we cut back or raise taxes.

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jaberwaky 4 years, 2 months ago

"Prospects of a pay increase for city employees did not appear bright. Corliss built his early budget on the assumption that there would be no pay raise for 2011. This year, city pay raises averaged 1.25 percent for most non-union employees, while members of police and fire unions were eligible for a 5 percent increase."

Sounds like Non Union employees got the shaft. Time to organize!!!!!

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SettingTheRecordStraight 4 years, 2 months ago

Here's where the city commission should start cutting:

Over $9 million per year for Parks and Rec kickball leagues and radio-controlled airplane clubs.

Over $1 million per year for the Lawrence Arts Center

Nearly $2 million per year for our abominable emp-T

And who knows how much on our taxpayer-funded money pit of a golf course

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SettingTheRecordStraight 4 years, 2 months ago

They don't. All Parks and Rec programs are heavily subsidized by the taxpayer.

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independant1 4 years, 2 months ago

ok,

City of L total budget = what? let's say X

Budget shortfall = $1.6mil

If total budget X = $150mil

then reduce the budget by $1.6mil, each departmental budget must bite the bullet without reducing services.

150-1.6=$148.4 problem solved

but then I'm not an accountant

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paisley 4 years, 2 months ago

Right on...and neither is the Finance Director !

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hipper_than_hip 4 years, 2 months ago

The streets are falling apart, and the city wants to save money by not filling two public works inspector positions.

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jafs 4 years, 2 months ago

In addition to not spending lots of money on new expansion, we should also immediately stop providing tax abatements, incentives, etc. to businesses.

And, if there are businesses who received abatements based on certain promises (ie. numbers of jobs, etc.) and they aren't fulfilling them, their abatements should immediately be reduced proportionally (or eliminated).

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independant1 4 years, 2 months ago

a one percent or so budget shortfall could just be a minor nuisance but no

let's wallow in it

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Richard Heckler 4 years, 2 months ago

  1. Cut housing projects:

If residential growth paid for itself and was financially positive, we would not be in a budget crunch. But with increased numbers of houses you have increased demand on services, and historically the funding of revenues generated by residential housing does not pay for the services, they require from a municipality.

2. Cut PLAY out of the budget aka Field House, USD 497 expansion and Clinton Lake Regional Park

3. STOP annexing property! Taxpayers cannot afford what we have now.

4. STOP building new roads = expands existing tax dollar tab

  1. Cut all creative big government corporate welfare: A. Tax abatements B. Creative sales taxes C. Tax Increment Financing D. Tax Rebates **** Send developers to the banks E. Taxpayers CANNOT AFFORD developers who WANT WE taxpayers to subsidize their profit making ventures. =====
  2. Want to create jobs locally? Employ people that live in Lawrence A. Fix existing sidewalks in older neighborhoods B. Fix existing streets in older neighborhoods C. The above should keep people working for about two years =====
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Richard Heckler 4 years, 2 months ago

  1. STOP promoting economic displacement = taxpayers cannot afford economic displacement!!!

For example: *America Is Over Stored This decade's building frenzy produced a bumper crop of new retail space. But the occupants haven't materialized. http://www.newsweek.com/id/112762

**Example 2 Lawrence has enough spending to support about 4.1 million square feet of retail space, but the City Commission permitted developers to expand the supply to over 5.5 million square feet.

Lawrence has too much retail space chasing too few vendors, which means that many stores go empty, especially in the older shopping centers like downtown.

The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten. Investment, both public and private, is wasted. The taxpayers’ $8 million parking garage stands largely empty. The Hobbs-Taylor building and the 600 block of Massachusetts should be the top performing spaces in the community, but they have significant vacancies.

The recession has contributed to the problem, but had we properly managed our growth we would be much better off.

The developers’ short-term gain is now our long-term loss. Managed growth would have prevented much of the problem and would have protected and enhanced our downtown.

It will take many, many years to absorb this surplus space and, until this happens, it will be hard for downtown to compete. We can only look forward to many years of high vacancy and disinvestment. We need a City Commission that knows how to pace the growth of supply so as to protect our unique downtown. http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

Examples 1 and 2 could explain why the local government is running short.

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Jean1183 4 years, 2 months ago

And of course the commissioners agreed to add an empT route for the homeless shelter's new location at Franklin Circle (but mentioned that maybe they could get the County to "contribute" to the cost). Oh.....and FREE passes for the "guests" of the shelter to use.

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lawrenceRezident 4 years, 2 months ago

Maybe the city should look into Sigma Six or CMMI?

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