photo by: Nick Krug

Lawrence City Hall, 6 E. Sixth St., is pictured on May 3, 2016.

Over a period of about four hours on Tuesday, the Lawrence City Commission will hear from each of the city’s 14 departments about their projected budgets for 2017.

The work session, which starts at 3 p.m. and will be punctuated by a brief regular meeting at 5:45 p.m., is the next step in the city’s creation of its 2017 budget. Another work session will be held June 21 to hear requests from outside agencies.

City Manager Tom Markus will present his recommended budget in mid July, and then commissioners will have time to revise it. The commission passes a final budget in August.

Before commissioners learn of the departments’ requests Tuesday, city Finance Director Bryan Kidney will start the work session by giving an overview of Lawrence’s overall financial picture. He did so briefly in early May to kick off budget talks, warning commissioners that Lawrence’s general fund — the main fund for public services — would continue to decrease if the city continues making and spending money at the same rate it is now.

Markus has since said 2017 would be a year of “belt-tightening” for Lawrence.

Kidney will present Tuesday the Comprehensive Annual Financial Report, which offers audited financial statements and a more detailed look at city finances. Here are a few points from the report:

• The average unemployment rate in Lawrence for 2015 was 3.7 percent, down from 4 percent in 2014. Unemployment in 2013 was 4.8 percent. In 2012 it was 5.4 percent, and it was 5.9 percent in 2011.

• Lawrence experienced a 3.8 percent increase in sales tax revenue in 2015, bringing in more than $25.5 million.

• Major cost-drivers for the city are employee pay and health care, equipment and vehicles and debt payments.

• Lawrence overspent by $218,081 from its general fund in 2015. The report states the increase in spending came from a raise in employee salaries and benefits, as well as a $500,000 grant to the Dwayne Peaslee Technical Training Center. At the end of 2015, the fund had an “unassigned” balance of about $12.7 million, which is about 20.6 percent of what’s spent annually from the fund. City policy requires the unassigned balance to be maintained at 15 to 30 percent of expenditures to serve as a cushion.

• Kansas statutes set a debt limit for the city at approximately $287 million. As of the end of 2015, Lawrence had general obligation debt totaling nearly $98 million, about 34 percent of the maximum it’s allowed.

Also at Tuesday’s meeting, commissioners will hear a request from the Lawrence Public Library to increase its funding in 2017 in order to provide employee raises.

The library is seeking a $300,000 increase, or 8 percent, putting it at a total budget of $4,050,000. The library is a “component unit” of the city, and most of its budget comes from a levy on property taxes. If granted, the additional funding would also be used to grow the library’s digital collection.

In a memorandum to commissioners added onto Tuesday’s budget, Markus emphasized “the importance” of pay for city employees, saying compensation “directly impacts the city’s ability to recruit and retain quality employees.”

In 2016, the city set aside dedicated funding to increase wages.

“With these funds, significant strides were made with market competitiveness,” Markus said in the memo.

He goes on to say the city may want to create a salary pool in 2017 to raise some employees’ pay based on merit. Pay increases of 1 percent for the group in 2017 would total $407,100, of which $199,500 would come from the general fund.

Wages for police and firefighters are figured separately through contractually binding multiyear agreements. The city is obligated in 2017 to set aside an added $455,400 for fire pay in 2017 and $291,200 for police.

After receiving the financial overview, city pay statistics and the library and department requests on Tuesday, commissioners will have time to discuss what they heard.

The City Commission will meet at 3 p.m. Tuesday at City Hall, 6 E. Sixth St.