Posts tagged with City Budget

City betting on hotel stays, liquor sales as part of proposed 2016 budget; commissioners receive report on more than $1.5 million in overtime costs for fire, police departments

Sack out in a Lawrence hotel room, have an extra cocktail every now and then, and tell yourself that you’re doing Lawrence City Hall budget-makers a favor in the process.

City commissioners are close to passing a 2016 budget that makes a bet that hotel stays and liquor consumption both will increase in Lawrence in future years. Commissioners at their meeting tonight will take a key procedural step in approving the 2016 budget. They’ll publish the proposed budget and set a public hearing of Aug. 4, at which point they’re scheduled to approve the budget and the tax rate for the coming year.

So, let’s take a look at how this budget is shaping up:

The Rock Chalk Park project is completed, but it is still having an impact on the city’s budget. The proposed budget calls for taking $150,000 a year out of the city’s guest tax fund to make a portion of the annual debt payment for the city’s $10.5 million recreation center at Rock Chalk Park. Currently, all the recreation center debt is being paid for through the city’s proceeds of the countywide 1 cent sales tax.

But commissioners believe it would be appropriate to pay for some of the debt from the guest tax fund. Guest tax fund revenues come from a special tax that is charged on Lawrence hotel rooms. The city surmises that the eight-gym recreation center helps bring people to town for overnight stays, particularly for youth basketball and volleyball tournaments.

Guest tax money legally can only be used for functions that promote tourism, overnight stays and other activities that will generate more guest tax revenues. The countywide sales tax, on the other hand, can be used for any governmental purpose. So, by shifting $150,000 a year in payments to the guest tax fund, that frees up sales tax money for the city to use for other purposes. It is worth noting that the previous City Commission argued that when voters approved the countywide sales tax in 1994 they were given a “political promise” that the city’s share of the sales tax would be used for recreation projects. That was one of the key arguments from the past City Commission why they felt justified in using the sales tax to fund the recreation center in the first place without putting the issue to a public vote. Whether you subscribe to the political promise theory depends largely on how you remember 1994. Regardless, the city has the legal authority to spend the sales tax revenue on any governmental purpose. It doesn’t have such authority with the guest tax funds.

An issue to keep an eye on, though, is whether hotel stays in Lawrence will increase much over the next several years. The city is betting they will because by adding the $150,000 in debt payments, the guest tax fund is projected to spend more money than it will collect in 2016. The deficit is estimated to be about $40,000. That’s not a major problem in the near term. The guest tax fund has a healthy fund balance, and can afford to operate at a loss for a few years. But, eventually, the fund will need to move into positive territory to remain healthy.

The more significant issue with this change seems to be that residents were told — granted, by the previous commission — that there was no need to vote on the recreation center project because the sales tax funds were being used for what they were intended for by voters. Now, a portion of those funds will be used for other purposes, and the recreation center is beginning to affect other parts of the city budget. At the moment, the impact is fairly minimal because the $150,000 only represents about 10 percent of the annual debt payment the city makes on the recreation center. But we’ll see if this is the beginning of a new trend where the recreation center affects multiple areas of the city’s budget.

City commissioners are making an even bigger bet on liquor taxes. The proposed budget calls for about $350,000 in funding for the WRAP program, which puts mental health/social workers in Lawrence schools. The city is planning to fund that program from the special alcohol fund, which gets its revenues from a special tax charged on drinks served at bars and restaurants. There has been some other shifting of special alcohol dollars to try to accommodate the new WRAP funding, but it is a politically difficult fund to cut expenses in because several social service agencies are funded from the tax revenues. So, the net result is the proposed 2016 budget has the special alcohol fund spending about $52,000 more than it is projected to receive in revenue next year. Unlike the guest tax fund, the special alcohol fund does not have a healthy fund balance. City staff members are estimating the fund will completely spend down all its reserves by the end of 2018. What will change that scenario is if liquor sales increase faster than expected in the coming years. But as we’ve previously reported, for some unknown reason, drink sales at bars and restaurants actually have declined the past two years in Lawrence. Betting on liquor sales to increase in Lawrence, though, generally has been a good long-term strategy.

The proposed budget that commissioners will discuss tonight is different from the recommended budget prepared by interim City Manager Diane Stoddard. The biggest difference is that Stoddard’s recommended budget called for a property tax rate increase of 1.057 mills. City commissioners balked at that increase, however, and the proposed budget now calls for the property tax rate to hold steady.

That means some items had to be cut from the recommended budget to make items balance. (Well, sort of balance. More on that in a moment.) But it also means the city is getting more aggressive in projecting how much revenue it will receive in 2016, at least in one area. The proposed budget calls for $250,000 more in license and fee revenue than what Stoddard’s recommended budget called for less than a month ago. The increase is expected to come from the city’s new rental licensing and inspection program, which gets in full gear in 2016. To be clear, the city is not proposing to increase what it charges landlords; it has just chosen to get more aggressive in its projections on the amount of money the program will raise in 2016.

As for the part about the city’s budget balancing, what is proposed is not a balanced budget. The proposal calls for general fund spending to exceed revenues by about $895,000. But city officials are hopeful that won’t be the case. The city over the last several years has routinely budgeted to spend more than it receives in revenue, yet at the end of the year it has managed to finish with a slight surplus of revenues over expenses. Sometimes revenues — like sales tax collections — increase more than expected. Other times, the city manager’s office put on hold or eliminates certain purchases to keep expenses in line with revenues. The city’s total general fund budget has about $79.7 million in expenses, which is up about about 5.2 percent from 2015.

Among items that are getting a cut in the budget compared with what was in Stoddard’s recommended budget are:

— $25,000 in Planning Department funding that was to be used for various studies;

— $86,000 in the street maintenance division. The money was to be used to buy additional road salt. To be clear, the city will have road salt for the winter season. It just won’t buy as much as once planned.

— A nearly $189,000 reduction in the amount of overtime the Lawrence Police Department pays in 2016. That one caught my eye because a reduction in overtime seemingly would mean a reduction in the number of hours police are out on the street because the city is not adding any full-time officers as part of the 2016 budget. But I checked in with Mayor Jeremy Farmer about the cut, and he said the $189,000 reduction still will allow the Police Department to have at least the same number of hours available for overtime as it does in 2015. Police leaders, though, were asking for an increase in the number of hours they could use in 2016, and commissioners balked at that strategy.

•••

Look for a discussion among commissioners on how the police and fire departments use overtime. Commissioners recently received a new report about just how much overtime is used in those two departments. The fire department spent $609,812 in overtime costs in 2014 for firefighters. Police officials spent $543,651 on overtime for police officers and another $603,938 on overtime for detectives in 2014. As we previously reported, the Police Department has been unable to staff a nighttime detective division, meaning that detectives often are called in for overtime when an investigation needs to occur during the nighttime hours. Police department leaders asked for about $1.2 million in funding to staff a nighttime detective division in 2016, but the funding is not included in the proposed budget.

At some point, I think city commissioners are going to have to figure out what the right size is for the Police Department. What will be interesting is whether they figure that out before they make decisions about what type of police headquarters building to fund. Knowing how large the force will be today and in the future is important in the design of the facility, but the bigger issue probably is figuring out how to spend what could be limited resources. If the city spends $20 million or more to build a police headquarters building, and then determines it needs to spend multiple millions more to add police officers shortly thereafter, will that be politically viable? That’s a big question that could have some big implications for the community and the Police Department.

Commissioners meet at 5:45 p.m. tonight at City Hall.

Reply 1 comment from David Holroyd

City manager forecasting increase in city’s general fund property tax rate for 2014 budget

If City Manager David Corliss has his way, property tax bills in Lawrence may go up just a bit in 2014.

Corliss is in the process of preparing his recommended 2014 city budget, but he has provided city commissioners a peek at one of the bottomline numbers. Corliss is forecasting that his recommended budget will call for at least a 0.4 mill increase in the city’s property tax rate, mainly to pay for four new positions in the city-county 911 center, for increased overtime costs for the police department and for additional equipment in the public works department.

In case your abacus is acting up in the heat, let me take my shoes off and do the math for you. A 0.4 mill increase would amount to an extra $9.20 a year in property taxes for the owner of a $200,000 home.

But as the saying goes at City Hall, the city manager proposes and the City Commission disposes. In other words, just because Corliss is recommending a mill levy increase doesn’t mean that City Commissioners will approve one.

Corliss is scheduled to provide a budget update to commissioners at their Tuesday evening meeting. But most of the heavy budget lifting for the commission comes after Corliss releases his recommended budget, which is scheduled to happen in the last week of June. Commissioners then have until early August to finalize the budget for 2014.

There are still several questions outstanding on what else will be included in Corliss’ recommended budget. Budget-makers will have to make some decisions related to the budget for the Lawrence Public Library. Leaders at the library have asked for about $173,000 in additional funding for its operations. The library’s mill levy is separate from the city’s general fund mill levy, but both are controlled by city commissioners. Corliss didn’t provide a forecast for what may happen to that mill levy, but staff members previously have said the additional funding would either require a mill levy increase or a draw down of the library’s reserve funds. In other words, the total increase in the tax rate for city property owners may be more than 0.4 mill, depending on what happens to the library fund.

A mill levy increase for the library shouldn’t really catch anybody by surprise. During the bond election, library supporters said they would need a mill levy increase for both the construction of the expanded library and for the operations of the larger facility. Thus far, city commissioners have mainly just increased the mill levy to cover the construction costs but not the operational costs. The library is expected to move into the larger facility in 2014.

If the city’s mill levy does increase, it will continue a trend. The city’s property tax rate has increased each of the last two years, mainly due to increased spending to add more police officers and the voter-approved $19 million library expansion. The increases ended a period in the mid-to-late 2000s where the mill levy either held steady or declined. Here’s a look at mill levy rates:

• 2003: 28.09

• 2004: 27.86

• 2005: 26.36

• 2006: 26.36

• 2007: 26.79

• 2008: 26.65

• 2009: 26.69

• 2010: 26.69

• 2011: 28.61

• 2012: 29.53.

It is also worth noting that in 2008, city voters approved three new sales taxes — two for public transit and one for infrastructure — that took significant pressure off the city’s property.

It will be interesting to see if city commissioners balk at any increase in the mill levy this year, or whether they are willing to live with a small increase. An increase this year will come on the heels of the city’s decision to use recently unencumbered sales tax dollars to pay for a $25 million recreation center and infrastructure for the KU-oriented Rock Chalk Park project. City commissioners resisted calls to use those recently unencumbered sales tax dollars to fund other city budget priorities.

Commissioners meet at 6:35 p.m. Tuesday at City Hall.

Reply 36 comments from Lebo Toe Sue Grosdidier Richard Heckler Notwhatyouthink Newkansan David Holroyd Centerville Matthew Herbert Dirt and 15 others

From animals to art, library to law enforcement, city has long list of funding requests for 2014

It is not only the season for George Brett tattoos and Royal-blue face paint. (I assume we’re all doing that to celebrate Brett’s recent return the Royals’ bench. Aren’t we???)

Oh well, it is also budget season at Lawrence City Hall. And that means city commissioners have a long list of monetary requests from city departments and outside agencies to consider. That process gets started in earnest at a 3:30 p.m. study session Tuesday at City Hall.

Here’s a look at some of the requests:

• The Lawrence Public Library is requesting an extra $173,000 in its budget — about a 5 percent increase — to fund operations at the new and expanded library facility. But the extra money won’t be going to buy more books or other items to fill the shelves. The biggest factors in the request are a 12 percent increase in health insurance premiums and a state-mandated increase in contributions to the KPERS pension program for employees. The library’s $3.4 million budget also doesn’t include many new employees to run the library, which will about double in size. The library is creating two new positions — a book stack manager and a technology position — but those positions will be added through a staff reorganization rather than a staff expansion. As for books and other reading materials, the library’s budget holds those expenses steady at $540,000. It is worth noting, however, that the library isn’t expected to move into its new facility until the spring or summer of 2014, so its 2015 budget may be a better indicator of how much it will cost to run the larger library.

• The Lawrence Community Shelter also is learning how to operate in a larger facility. The homeless shelter is seeking $100,000 in general tax funds to operate the shelter. That’s an increase of $8,000 over 2013 totals. The shelter also is set to receive $44,000 in liquor tax funds from the city. That’s the same amount it received in 2014.

• Douglas County officials are asking the city to provide about $135,000 to add four dispatchers to the jointly operated Emergency Communications Center, which handles all 911 calls in the county. It will be interesting to watch this one. The city and county have clashed in past years on some of these jointly funded ventures. Past administrations have negotiated the cost-sharing agreements, and city officials recently have expressed dissatisfaction with some of them. In this case, the city pays 66 percent of the operating costs of the center, while the county pays 34 percent. Other cities in the county, such as a Baldwin and Eudora, don’t directly pay for any of the costs, although their police departments also use the dispatching service. The bigger issue, though, is that city officials feel like city residents are getting taxed twice for the service because Lawrence residents also pay county taxes. County officials have indicated the arrangement is fair because a large majority of calls come from Lawrence residents.

• The Lawrence-Douglas County Health Department — another jointly funded agency — is seeking about a $13,000 increase in city funding, about a 2 percent increase. The city pays for about 20 percent of the department’s operating budget, while the county, grants and user fees pay for the rest of the approximately $3.3 million budget. The city, however, may be on the hook for significant costs related to the Community Health Building, which houses the Health Department, Bert Nash and the Visiting Nurses Association. The city and county currently are gathering estimates to increase security at the building. The city would be obligated to pay half of those costs, which haven’t yet been determined.

• On the law enforcement front, a major increase in funding may depend on a grant application. City commissioners are being asked to apply for an $875,000 federal grant that would provide funding for seven school resource officers for the next three years. The city would have to provide about $460,000 in matching funds for the grant. The new school resource officers, which would be in addition to the four school resource officers the city already has in place, would allow each high school and all the middle schools to have a dedicated officer. Currently, high schools and middle schools often share officers. The city would find out whether it has won the competitive grant funding by the beginning of 2014. As we have previously reported, the police department also has several other facility and equipment needs, but those probably merit a separate discussion since they could total $20 million or more. Whether city commissioners have any interest in having that discussion during this budget round will be one of the key things to watch during Tuesday’s study session.

• City Manager David Corliss is recommending the city budget $120,000 to help Johnson County pay for the K-10 Connector transit service that runs between Lawrence and portions of Johnson County. That amount is proposed to grow to $275,000 by 2016. Johnson County officials have said the popular commuter service is at risk of being closed down if Lawrence officials don’t assist in funding the program.

• The city attorney’s office is estimating it will need about $138,000 more to cover the costs of housing prisoners in the Douglas County Jail and also for providing defense services to indigent clients who come through Lawrence Municipal Court.

• Public Works would like to add an additional maintenance worker — at a cost of about $45,000 — to help care for the new parking garage that is being built next to the expanded library.

• The Lawrence Humane Society is seeking a nearly 35 percent increase in city funding for 2014. It is seeking $377,000 in funding to care for the stray animals that the city’s animal control officers bring to the facility.

• The Lawrence Arts Center is asking for more money on multiple fronts. The center, which is housed in a city-owned building, is seeking $51,000 in general city funding to pay for a new custodial position, increase technical staff and increased maintenance. The center also is seeking an additional $25,000 from the city’s liquor tax revenues to provide scholarships to children who can’t afford to pay for classes and programs. The city currently provides $25,000 for scholarships, but center leaders say demand is high. The center provided $100,000 worth of scholarships in the last year. The Arts Center also is seeking about $15,000 for a new phone system, and about $20,000 to upgrade the building’s kitchen, which serves a variety of events.

• Finally, there are a host of social service agencies and other not-for-profits that request funding from the city each year. A city advisory board is recommending that most of the funding amounts to those organizations hold steady for 2014. But that’s not the case in every instance. You can look at the entire list here.

Reply 17 comments from Liberty275 Kinder_world Anthony Mall Chootspa Catalano Richard Heckler Stephanie Hull Food_for_thought Richard Johnson Jack22 and 5 others