Leavenworth city commissioners continued their review of the proposed 2014 budget Thursday afternoon with the second of three scheduled work sessions.

Leavenworth city commissioners continued their review of the proposed 2014 budget Thursday afternoon with the second of three scheduled work sessions.

Commissioners are reviewing individual funds that make up the proposed $25.3 million budget for the city. Thursday, they reviewed budgets for the Public Works, Human Resources and Finance departments.

City staff have recommended a 1.73 mill levy increase for the 2014 budget. This would result in a property tax increase that would work out to an additional $2.49 per month for the owner of a $150,000 home, according to information provided to commissioners.

Finance Director Dan Williamson reviewed the circumstances that led to the recommended mill levy increase.

Williamson said expenses for the city are anticipated to increase by more than $500,000. This includes an increase in payments to the Kansas Public Employees Retirement System and the Kansas Police and Fire Retirement System of more than $200,000 as well as increases for things such as salaries, employee health insurance and electricity costs.

Williamson learned Thursday that the increase in the amount the city will have to pay for the Kansas Police and Fire Retirement System will be about $10,000 less than he'd earlier thought.

Money from revenue sources other than property taxes are expected to increase by $45,250. These revenue sources include sales taxes and franchise fees.

One area the city has been hurt in revenue is court fees and fines, which is seeing a $200,000 decrease. City Manager Scott Miller has attributed this decrease in large part to the Leavenworth Police Department not having a full traffic unit because of staffing issues.

The city also will have leftover balances that will be transferred into the 2014 budget. When the balance transfers are combined with the increased revenue, there will be about $176,000 in additional funding resources. But with increases in expenses totaling more than $500,000, the city has to make up a gap of about $300,000.

Williamson said Thursday that a decline in assessed valuation adds $37,000 to the gap.

He said the city in previous years already has "picked the low lying fruit" in terms of areas to cut.

"We're at the point now where we don't have any easy cuts to offer you," he said.

He said additional cuts will begin to impact the service levels of the city.

City staff also are recommending a 3 percent rate increase for sewer service for next year. No rate increase is recommended for the city's trash collection service.

Factored into the proposed 2014 budget are pay raises for employees. Williamson said employees would receive raises of 3, 2 or 0 percent based on performance. He said it averages out to a total increase of 2.2 percent. This is based on about 20 percent of employees receiving the 3 percent raise, 80 percent receiving 2 percent raises and very few receiving no pay increase.

Miller said people who receive no pay raises usually are on their way out in terms of employment with the city.

Williamson said a 6 percent increase for health insurance costs is budgeted for 2014.

Lona Lanter, director of human resources, said she's 92 percent certain that she can get the city to within a 6 percent increase.

When commissioners were reviewing a budget for street and alley maintenance Thursday, Mayor Pro-Tem Mark Preisinger asked if expenses could be broken out to show the cost for a city leaf collection program.

"Is there a potential savings there if you did not do it?" he asked.

Mike McDonald, public works director, said if employees didn't do the leaf collection, they would do something else for the city.

Williamson said the city might save some on maintenance costs if the leaf program was discontinued.

"The equipment is already bought," he said.

He said the city could discontinue the service as a free program and offer the service for a fee.

Commissioner Larry Dedeke said he didn't like this idea.