photo by: Mike Yoder

Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

To avoid both property tax rate increases and a budget deficit, City Manager Tom Markus is recommending cuts to city spending in 2017, including the elimination of one part-time and eight full-time staff positions.

Markus released his recommended 2017 budget Thursday evening. Besides personnel cuts, the budget, totaling $189 million, calls for reductions in an employee longevity program and contributions to employee retirement. Some requests from city departments and outside entities, such as the Lawrence Arts Center and Lawrence Public Library, won’t be met.

More money was allocated to some areas the City Commission has set as goals, including $300,000 for affordable housing, $750,000 for bicycle and pedestrian transportation improvements and $256,449 toward the creation of a “mental health squad.”

“We wanted to focus on the commission’s goals, maintain a level tax rate and present a structurally balanced budget,” Markus said.

Residents would see an increase in their utilities bills under the recommended budget. According to city-provided data, monthly bills for the typical household would go up $5.02, for an annual increase of 4.8 percent.

The recommended budget will be presented to the City Commission at a work session at 3 p.m. Tuesday at City Hall, 6 E. Sixth St. Commissioners can alter the budget over the next month, before passing one in August.

From the start of the budget process this spring, Markus has said there would need to be “belt-tightening” to prevent another year in which Lawrence spends more than it makes. In the recommended budget, the city’s revenue would match expenditures “dollar to dollar,” he said.

To balance the 2017 budget, Markus trimmed $1.5 million from the general fund, the main fund for city services.

“We had to make some pretty significant cuts,” he said.

Markus already met with staff members whose positions would be eliminated under his budget. Those are: the director of arts and culture, the city auditor, the assistant director of finance and the small business facilitator.

The positions being cut that currently are not filled are: communications specialist, project engineer, part-time waste reduction/recycling specialist, Parks and Recreation director and one administrative support position for Lawrence-Douglas County Fire Medical.

Assistant City Manager Diane Stoddard explained the current interim Parks and Recreation director, formerly one of two assistant directors, would remain in the director position. The city had budgeted to fill the director spot, but now the position will be eliminated and the department will “continue on how we have for the last several years,” Stoddard said.

In a summary of the budget, Markus wrote that presenting a balanced budget “has not been easy.”

“I recognize that there remains a number of unmet needs and items that the community wishes it could afford,” he wrote. “We simply need to make these adjustments in order to place the city on a solid financial footing in the future.”

To cut costs:

• About 40 requests from city departments, totaling $5.4 million, would go unmet, ranging from security measures to comply with a new concealed carry law, to new vehicles, to an increase in the city’s stock of deicing salt.

• Nearly $14.9 million in requested capital improvement projects wouldn’t be funded.

• Requests from social service agencies wouldn’t be fully met, with about $1.6 million requested and $1.2 million recommended.

• The city manager’s office determined the Lawrence Arts Center would receive only $55,000 of a $156,343 request to improve its facilities.

In June, when receiving requests from outside groups, Vice Mayor Leslie Soden asked whether the city’s lease agreement with the Lawrence Arts Center called for city-funded facilities improvements. At the time, the city was recommending funding $100,000 worth of facilities upgrades, the same amount the city allocated in its 2016 budget.

After review, the city manager’s office found the agreement specifies Lawrence is responsible for major maintenance to the Arts Center but not interior upkeep. The Arts Center’s request asked for funding for a new security system, wireless internet connection, carpet and toilet seats.

“Most of those items they included in the maintenance request were items that would be their responsibility under the lease agreement,” Stoddard said.

Markus said he didn’t want to eliminate the funding altogether in 2017, but that no funding toward those types of facility improvements would be awarded to the Arts Center in 2018.

Another request from the Arts Center, for scholarships, would be filled to the extent it was in 2016, with $30,000. It had requested $60,000 for scholarships in 2017.

“We do provide a lot of funding for the Arts Center in a variety of ways, including the scholarship program,” Stoddard said. “The funding put into the Arts Center has been sizable.”

She noted the city also pays utility bills for the Arts Center and contributes about $200,000 annually for the building’s debt payments, which end in 2020.

• Johnson County would get less than half of what it requested from Lawrence to continue operating the K-10 Connector, which runs along Kansas Highway 10 taking riders between Kansas University, Johnson County Community College and KU’s Edwards Campus. Markus is recommending paying $120,000 for the service, the same as in 2016 but less than the $327,800 requested this year.

Johnson County officials have said if Lawrence didn’t pay the requested amount, it “would likely need to revisit and reassess its support of the route.” “It is unknown at this point what the potential impact keeping this contribution level may create,” the budget summary states.

• The Lawrence Public Library would receive only about $13,500 of $300,000 increase it requested in 2017, most of which was to be used to raise employee pay. Library Director Brad Allen asked commissioners for a total of $4.05 million in 2017, but the library is set to receive $3.76 million. If approved, the balance in the library fund will be “essentially depleted” after 2017, according to the budget summary.

In a summary of the budget, Markus wrote the cuts would “place the city on a more firm financial footing” before the new property tax lid goes into effect in 2018. The law would require Kansas cities and counties to receive voter approval before increasing their property tax revenues beyond the rate of inflation.

Because of an increase in assessed valuation for the city (the value of property from which Lawrence can levy taxes), the amount received from property taxes will grow 3.8 percent for the 2017 budget. Had the tax lid been effective in 2017, the growth would have been limited to 1.6 percent, Markus figured, and the budget would’ve included more drastic personnel cuts.

“Now it’s going to be upon us next year, and it’s going to have a real impact,” Markus said.

The tax lid “emphasizes our need to grow our tax base,” he said. “We need to look at our sales tax operations and our pull factor, and take a hard look to step up our efforts on economic development.”

Funding toward economic development initiatives would remain level under Markus’ 2017 budget. He’s proposing the city’s contract with the Lawrence chamber of commerce be paid, as well as some of the requests from Peaslee Technical Training Center, the Bioscience and Technology Business Center and Downtown Lawrence Inc.

One request from the BTBC, for $75,000 to provide incentives to draw early-stage bioscience and tech companies into the area, is recommended to get only $25,000 under the proposed budget.

Although some positions and services are being cut, others would be added under the budget. Some of the additions are:

• A mental health squad, made up of one new police officer, one reassigned police officer, a new sergeant and a clinical case manager. The squad would cost $256,449 to start up in 2017. The city plans to give about $50,000 to Bert Nash Community Mental Health Center, which would employ the new case manager on the squad.

Besides money for the case manager, the city plans to award about $144,000 to Bert Nash for case managers to assist the homeless (about $10,000 less than requested for 2017) and nearly $322,000 for the Bert Nash WRAP program, which provides mental health services in local schools.

• Other new employee positions, comprising: five new employees for the utilities department, four of which are for the Wakarusa Wastewater Treatment Plant; a two-person culvert-inspection crew; a senior building inspector funded through fees; and a planner and community development manager paid for with grants.

• More personnel and equipment for the Lawrence Police Department. The budget includes $435,200 for the department to hire eight officers in 2017 over the permitted total force. Markus’ budget also sets aside about $1.2 million for new computers, vehicles and scanners for the department, as well as $1.5 million for designs for a new police facility.

In the budget summary, Markus noted the importance of keeping a certain amount of money in the city’s operating funds “to continue operations if revenues decrease unexpectedly.” The amount in reserves also affects the city’s credit rating.

In previous years, the city has dipped into its reserves in its general fund. Lawrence has a policy to keep as a cushion 15 percent, or about two months’ worth, of what’s spent annually from the fund. Approximately $12.7 million, or 16.6 percent, was in the fund at the end of 2015.

City Finance Director Bryan Kidney said on Thursday the city would have more than 20 percent in reserves under the recommended 2017 budget.