photo by: Bremen Keasey

From left, Vice Mayor Brad Finkeldei, Mayor Mike Dever and Commissioner Bart Littlejohn in the City Commission room in Lawrence during Tuesday's meeting. Commissioners Lisa Larsen and Amber Sellers attended virtually.

As the city of Lawrence stares down a projected $6.5 million budget hole for 2026, city commissioners say they want to recharge the city’s savings account, and they haven’t yet ruled out raising the mill levy.

City commissioners provided some early feedback at their meeting on Tuesday about the 2026 budget process, and they agreed they wanted to set aside $2 million in the city’s reserve fund. They also wanted to deem certain portions of the budget, including police patrols and investigations and housing initiatives, as untouchable for cuts; explore adding fees for services like Parks, Recreation and Culture; and keep their options open to raise the mill levy.

Even with those options on the table, City Manager Craig Owens laid out what’s at stake by reminding commissioners that the $6.5 million gap is equal to, on average, the wages of 50 city employees. And Alley Porter, a budget manager with the city, said that gap was based on projections that included sales tax growth of 2% compared to last year and an assessed valuation of 6.25% from last year. When the city gets new data for this year, she said, the number could change.

One key question for the commission is about the future of the city’s reserve fund. The $518.7 million 2025 budget that the commission approved last September was seen as unsustainable, because the commissioners voted to dip into the city’s savings in the reserve fund — using $1.6 million of it — instead of raising taxes.

Porter said the city is hoping to put $2 million back in the reserve fund. She said that dipping too much into the fund balance without replenishing it would jeopardize the city’s credit rating. Because the city uses debt funding for a lot of large infrastructure items, not fixing the fund balance situation could lead to higher costs down the line.

“If (the credit rating) gets downgraded, you risk paying millions of dollars more for nothing,” Porter said.

Commissioners agreed with the idea of putting $2 million back in the fund balance. They also identified a number of aspects in the budget that they didn’t want to cut. These decisions were based in part on the two special committees formed last year to advise the 2026 budget process — a Community Budget Committee and an Employee Budget Committee.

Using the interactive budgeting tool called “A Balancing Act,” the commissioners and the committee members agreed that they wanted to maintain several aspects of the city’s services at their current levels: ADA compliance from the Municipal Services and Operations department; investigations and patrol for the Lawrence Police Department; aquatics services from the Parks, Recreation and Culture department; and code compliance.

Commissioner Amber Sellers said she wanted to continue funding those programs because they had been key areas of focus for the city in recent years. She suggested keeping funding for housing initiatives steady as well, and the other commissioners agreed.

In their feedback through the Balancing Act tool, commissioners also showed interest in cuts to two areas — information services expenses for the Lawrence Police Department and expenses for the city-owned Eagle Bend Golf Course. The commission has not yet given city staff guidance to cut those areas, but Commissioner Brad Finkeldei said “everything else has to be on the table.”

That includes raising the mill levy, too. Though multiple commissioners expressed hesitancy about doing that, the commissioners agreed that they hadn’t ruled it out. Sellers said she thought keeping the mill levy flat would not be realistic with the budget deficit, and that it was important to discuss any potential increases now so that they won’t be a surprise to residents and cause a “sticker shock” later.

Mayor Mike Dever agreed, adding that dipping into the fund balance like last year was “not on the table.”

Owens said the commissioners “delivered what the city hoped for” in the initial feedback for the budget discussions. He reminded the commissioners that these aren’t final decisions, but that the city wanted to start the process earlier because the $6.5 million deficit is a “significant number.” Although most of the city’s operations will remain largely unchanged, the city will have to carefully find out where reductions will come from, and Owens said they wanted to be more candid about what’s at stake.

“We’re going to start doing that work so we have the softest possible landing,” Owens said.

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In other business, commissioners gave some input on what they’d like to see in a new inter-government agreement for Lawrence-Douglas County Fire Medical.

LDCFM, which provides fire services in Lawrence and EMS services throughout Douglas County, operates on an agreement between the city and county. That agreement was originally set to expire in 2024, but was extended for a year to allow the City Commission and County Commission more time to reach a new agreement.

McKenzie Ezell, interim chief of staff for LDCFM, presented the commissioners with three questions on Tuesday: whether LDCFM should continue under its current model, what the acceptable service levels for the department should be and how long the agreement should last.

Finkeldei said he liked the current model and wanted it to continue because there are efficiencies with the city and county services being combined. He said he was also up for discussion of possible changes related to how new construction and expansion projects would be paid for.

Dever said he wanted to maintain the current service levels, and also felt that for the timing of the agreement, “the longer the better.”

The Douglas County Commission is set to see the same presentation during its meeting on Wednesday.