CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date: June 12, 2018
Staff Contact:	Casey Toomay, Assistant City Manager
Recommendations/Options/Action Requested:
Receive the City Manager’s Recommended 2019 Operating and Capital Improvement Budget and provide direction as appropriate.
Executive Summary:		The total City Manager’s Recommended Budget for expenditures is $206,068,000 across all funds. The budget maintains the current mill levy rate and includes moderate fee increases for water & sewer and stormwater to cover the increased costs of providing service. The recommended budget is balanced and many tough decisions had to be made about priorities. The budget eliminates vacant positions and left many department projects, personnel requests, and equipment needs unfunded. The recommended budget does include funding for social service agencies at the same level as 2018.  Revenue Assumptions A number of assumptions were used to develop the recommended budget for revenues. These will continue to be monitored and if needed will be updated for the July budget presentation. The recommended budget assumes that City sales and use tax will increase 2% over 2018 revised budget and the City share of the County sales tax will increase 1.8% over 2018 revised budget. Additionally, the budget assumes a 6% growth in assessed valuation but may need to be adjusted when the county estimate is received in early July. Expenditure Assumptions A number of assumptions were used on the expenditure side as well. These too will continue to be monitored and updated as appropriate for the July budget presentation. The recommended budget assumes funding for the terms outlined in the Memorandum of Understanding (MOU) between the City and the Local International Fire Fighters Association (IAFF). Currently, the City and the Lawrence Police Officers Association (LPOA) are negotiating terms for 2019 and the budget will be updated once those negotiations are completed. Additionally, the recommended budget includes funding for a merit pool of 2% of base salary for all non-MOU employees. Furthermore, the recommended budget assumes that employer contributions to healthcare will increase 6.2% over 2018. There are also several proposed changes to personnel in the recommended budget that equate to a net increase of 3.5 positions and are summarized below. · Add 1.0 Payroll Coordinator—Human Resources · Add 1.0 Housing Specialist to begin mid-year—Planning & Development Services · Add 2.0 Business Systems Analysts—1.0 in Information Technology and 1.0 in Utilities to begin mid-year 2018 · Add 1.0 Marketing Specialist—Police · Add 1.0 Crime Scene Technician—Police · Eliminate 0.5 Vacant Administrative Support III—Planning & Development Services · Eliminate 2.0 Vacant Solid Waste Loaders—Public Works Finally, it should be noted that the budget report and the budget book is using unaudited figures for 2017. There will likely be several adjustments to these figures once the 2017 audit is finalized which is anticipated to be by June 30. Next Steps Based on City Commission direction and updated figures that will be available in early July, staff will bring back updated revenue and expenditure figures at the July 10, 2018 work session. At the meeting on July 17, 2018 the City Commission will be asked to establish the maximum expenditures and authorize publication of the 2019 budget. On August 7, 2018 a Public Hearing on the budget will be held and the First Reading of the Budget Ordinance will be on the agenda. The Second Reading of the Budget Ordinance will be on the August 14, 2018 agenda. It should be noted that these next steps assume that no election will be held to increase the mill levy rate beyond the consumer price index as the Recommended Budget proposes the mill levy remain flat.
Strategic Plan Critical Success Factor		Effective Governance/Professional Administration Innovative Infrastructure and Asset Management Core Services Sound Fiscal Stewardship Economic Growth and Security
Fiscal Impact (Amount/Source):		The total City Manager’s Recommended budget for expenditures is $206,068,000 across all funds and the General Fund is $77,332,000.
Attachments:		Budget Report City Manager’s Recommended Budget Book – Added 06/05/18

Reviewed By: (for CMO use only)

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