Lawrence City Commission moves forward with recommended budget for 2021; discussion of utility rate increase to continue
photo by: Mike Yoder
City leaders have approved a spending level for the 2021 budget that gives them room to increase utility rates and provide employee wage increases at the level recommended by city management.
As part of its meeting Tuesday, the Lawrence City Commission voted unanimously to authorize publication of the 2021 budget summary and establish the maximum expenditure authority in line with City Manager Craig Owens’ recommended budget. The budget includes increases in all three of the city’s utility rates and pay raises for all city employees, though not to the level called for by city pay schedules.
Once the maximum expenditure level for the budget is set, commissioners can decrease but not increase that level. Commissioners indicated they were supportive of providing the ability to move forward with Owens’ recommendations as budget considerations continue.
“It’s not everything that we’d love to have — there is stuff in there that’s going to be tough,” Commissioner Stuart Boley said. “But it’s progress, and I support the city manager’s recommended budget.”
Owens’ $291 million recommended budget calls for a flat property tax rate but increases in all three city utility rates to help support operations and infrastructure projects. The budget includes a $51.6 million capital improvement plan, a $24.4 million maintenance plan and a $14 million vehicle and equipment replacement plan, or about $90 million total among the three plans.
The commission’s approval of the maximum spending level is the first step in moving forward with the utility rate increases, but does not obligate the commission to approve the increases recommended by city staff. MSO Deputy Director Mike Lawless told the commission that the city is still in the process of determining exactly how the rate increases will be distributed among customer types and services, and a more detailed recommendation would be brought to the commission in September. Lawless said the revenue that would be derived from the rate increases is divided roughly 50-50 between capital improvement costs and operations and maintenance costs.
Commissioner Lisa Larsen said that while Tuesday’s vote gives the city the spending authority to increase the rates as recommended the commission could decide in September not to do so or to increase the rates less than city staff’s recommendation. Larsen also asked city staff to determine what capital projects would go unfunded should the commission not increase the rates as much as requested. Finance Director Jeremy Willmoth said staff could create a sliding scale indicating which projects would go unfunded at various levels of rate increases.
The other question the commission was asked to consider Tuesday was whether to increase the spending authority to allow for additional pay raises for city employees or to maintain the level that aligns with the raises called for in Owens’ recommended budget. Commissioners’ decision not to increase the spending authority beyond that of the recommended budget means that if they later decide to provide more funding for raises, that funding would have to be reallocated from other areas of the budget.
The recommended budget calls for a general wage adjustment of 0.5% and about $828,000 in market adjustments for city employees in the primary pay plan, amounting to a total of about $1.04 million in pay increases for those employees, according to city staff presentation materials. If the city were to fully fund the compensation plan for primary employees, it would cost another $1.9 million for those employees.
The recommended budget also includes another $227,000 to fund annual wage increases in the Lawrence Police Officers Association pay plan and another $179,000 to fund annual wage increases in the International Association of Fire Fighters Local 1596 pay plan. Because of provisions in the LPOA and IAFF employment contracts, if the city were to fully fund the primary pay plan for nonunion city employees, it would also need to provide equivalent pay increases to unionized staff, which would amount to another $180,000 total for those two pay plans.
The Lawrence City Commission will hold a public hearing for the 2021 budget Aug. 11, though changes could potentially be made after that. Owens has described the budget as a placeholder because the commission will likely make budget amendments once it updates its strategic plan, a process that was delayed because of the pandemic and a desire to account for calls for police and racial justice reforms.