City of Lee’s Summit, Missouri

Fiscal Year 2012-2013 Budget

June 7, 2012

Budget Approach• Top Priorities Funded in the FY13 Budget:

– Public safety– Public infrastructure– Economic development– Customer service

• Guiding Factors– 5 year financial forecast– Fund balance policy

• Purpose of the budget is to serve as the financial guide, evaluate past priorities, communicate with citizens, and develop performance measures (GFOA Budget Objectives)

Budget Process

* The Budget Committee met six times prior to this public hearing. They support the City Manager’s budget recommendations subject to revisions that will be discussed.

Financial Analysis

December 2011 FY12 mid-year projections due

February 2012 Review of general fund budget scenarios

Budget Review and Adoption

March 12 Presentation of City Manager's FY13 general fund budget to Budget Committee begins*

May 14 & 29 Televised budget presentations from departments

June 7 Public hearing

June 21 Budget adoption

New fiscal year begins: July 1

General Fund: Fund Balance

    FY13 FY14 FY15 FY16 FY17Beg. fund balance: $ 11,559,540 $ 12,496,020 $ 13,848,655 $ 14,274,110 $ 14,729,391

End fund balance: $ 12,496,020 $ 13,848,655 $ 14,274,110 $ 14,729,391 $ 15,646,199

End fb as % of exp: 21.31% 23.02% 23.16% 23.33% 24.22%

Current Balance

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

FY08 FY09 FY10 FY11 FY12 Bud

FY12 Proj

FY13 FY14 FY15 FY16 FY17

Fiscal Year

General Fund Year End BalanceModerate Revenue Growth

Projected

20% of Exp

Note: The trend line does not include 5% for economic development opportunity that is approx. $3M above the shown line.

General Fund: FY13 Budget Highlights

• Public Safety: Fire Department management audit / accreditation process; new Police training facility

• Public Infrastructure: Curb replacement; pavement management; sidewalk; sanitary sewer line improvement; water main rehabilitation

• Sustainable Development: Transit-oriented development study; Rock Island Railroad Coalition efforts

• Technology: Enterprise Resource Planning (ERP); Windows 7 migration

• Communication and Citizen Engagement: Web-based citizen engagement tool; comprehensive citizen survey; cable channel upgrades

• Performance Excellence: Organizational Business Plan

• Arts and Culture: Bond election on cultural facilities

Compensation & Benefits• Merit Increases:o The FY13 budget includes an average 2% increase for salaries based

on a pay for performance system• Compensation Study:o The implementation of Phase 2 from the recent compensation and

benefit study has been included in the FY13 budget. Phase 2 is a modified implementation plan that is proposed to take effect January 1, 2013

• Health Insurance:o Health insurance premiums were budgeted with a 10% increase

based on preliminary figures• Collective Bargaining:o Compensation and Benefit figures in the recommended budget are

subject to collective bargaining agreements.

FY13 ExpansionsFund Item/ Program AmountGeneral $0

Airport VERP upgrade for snow plow $2,875

Information Technology Services: Windows 7 conversion $30,000

Alarm management software (Police), $23,000

Gasboy upgrade/conversion (Fleet) $60,000

Fleet Automatic paver (PW Operations), $95,000

Ford scan tool $3,000

Freon machine $4,000

Parks (all funds): Hallway & walkway lighting, fence capping, playground shade, ADA lift and ramp

$67,216

Solid Waste Diversion expansion $87,500

Water Utilities Vacuum excavator $44,500

Toughbooks (ITS), $7,000

TOTAL $424, 091

Budget Committee Recommendations• Amend the City Manger’s proposed budget as follows:

• Per City Attorney interpretation, the recommended adjustments to Mayor & City Council compensation would not be effective until the next term of office for that councilmember’s position. So, those reductions would not be effective for the FY13 budget year.

Item Amount Totals

•Reduce Mayor & City Council(CC) Travel $25,000

•Eliminate Mayor & City Council:

• Telecommunications allowance 9,396

• Car allowance 20,400

• FICA/Medicare on allowances 8,510

Subtotal Mayor & CC expenses: $63,306

•Eliminate general fund (GF) transfer to Arts Council 76,672

•Eliminate GF transfer to Beautification Committee $70,678

Subtotal GF transfers: $147,350

TOTAL AMENDMENT RECOMMENDED $210,656

General Fund Overview

FY12

FY13Recommended

Variance from

FY12 BudgetOrig.

BudgetYE

Projected

Revenues : $57,731,577 $56,685,223 $58,516,007 1.4%

Expenditures: -$58,311,420 -$57,892,069 -$59,436,976 1.9%

Operating Rev-Exp: -$579,843 -$1,206,846 -$920,969

One-Time:      

Revenues $1,000,000 $1,000,000 $1,050,000

Expenditures -$405,371 -$405,371  

Final Rev-Exp $14,786 -$612,217 $129,031

General Fund Revenues by TypeFY13: $59,566,007

30%

24%5%

24%

6%

Property Tax

Sales Tax

Other Taxes

Franchise Tax

License, Permits & FeesFines & Forfeitures

Fees & User Charges

Intergovernmental

Interest

G & A

Miscellaneous

Revenue SourceBudget

2012-2013

Property Tax $17,433,405

Sales Tax 14,213,657

Other Taxes 2,975,612

Franchise Tax 14,396,746

License, Permits & Fees 1,142,674

Fines & Forfeitures 1,389,414

Fees & User Charges 3,505,177

Intergovernmental 715,348

Interest 305,484

G & A 846,350

Miscellaneous 1,732,139

Interfund Transfers 910,000

TOTAL $59,566,006

General Fund Expenditures by TypeFY13: $59,436,976

71%4%

12%

8% Personal Services

Supplies

Other Services

Maintenance & Repairs

Utilities

Fuel

Capital Outlay

Transfers

Expenditure TypeBudget

2012-2013

Personal Services $41,998,727

Commodities 2,901,753

Capital Outlay 33,000

Contractual Services 14,024,858

Debt Service 68

Interfund Transfers 478,570

TOTAL $59,436,976

General Fund Expenditures by Department

FY12 FY13 Department Budget Requested $ %Police $19,043,736 $19,522,264 $478,528 2.6%Fire 15,595,990 15,696,172 $100,182 0.6%PW Operations 7,096,639 7,213,303 $116,664 1.7%Finance 4,941,443 5,448,339 $506,896 10.3%PW Engineering 3,690,710 4,090,005 $399,295 10.6%Administration 3,503,864 2,970,473 ($533,391) -15.0%Codes 1,424,374 1,472,518 $48,144 3.5%Planning 1,024,262 974,034 ($50,228) -4.9%Law 1,173,735 1,198,193 $24,458 2.0%Courts 816,667 851,675 $35,008 4.3%

Total $58,311,420 $59,436,976 $1,125,556 1.9%

Chg from FY12 Budget

33%

26%

12%

7%

9%

5%

Police

Fire

PW Operations

PW Engineering

Finance

Administration

Codes

Planning

Law

Courts

General Fund 5 Year Model

FY10 FY11 FY12 FY12 FY13 FY14 FY15 FY16 FY17Actual Actual Budget Projected Estimated Projected Projected Projected Projected

Revenues:Total operating revenues 57,560,029 58,266,035 57,731,577 56,685,224 58,516,006 60,212,887 61,754,818 63,601,749 65,508,865

Percent Change 4.29% 1.23% -0.92% -2.71% 1.36% 2.90% 2.56% 2.99% 3.00%

Salaries/Total Revenues 66.38% 66.84% 70.21% 71.09% 70.39% 70.62% 70.66% 70.43% 70.02%

Expenditures:Total operating expenditures 53,450,634 54,715,461 58,390,532 57,892,069 58,629,526 60,160,253 61,629,362 63,146,468 64,592,058

Percent Change 0.51% 2.37% 6.72% 5.81% 0.41% 2.61% 2.44% 2.46% 2.29%

Revenues - Expenditures 4,109,395$ 3,550,573$ (658,955)$ (1,206,845)$ (113,520)$ 52,635$ 125,455$ 455,281$ 916,808$

Revenues - Expenditures 4,109,395$ 3,550,573$ (658,955)$ (1,206,845)$ (113,520)$ 52,635$ 125,455$ 455,281$ 916,808$ One-Time:

Revenues 0 0 1,000,000 1,000,000 1,050,000 1,300,000 300,000 0 0Expenditures 0 0 0 0 0 0 0 0 0

Exergonix 0 (1,405,280) 0 0 0 0 0 0 0Legal Settlement 0 (15,500,000) 0 0 0 0 0 0 0

ERP 0 (1,800,000) (405,371) (405,371) 0 0 0 0 0

Rev - Exp (after one-time) 4,109,395$ (15,154,707)$ (64,326)$ (612,216)$ 936,480$ 1,352,635$ 425,455$ 455,281$ 916,808$

Net change in fund balance including one-timeFund balance—beg. 23,217,069$ 27,326,463$ 12,171,756$ 12,171,756$ 11,559,540$ 12,496,020$ 13,848,655$ 14,274,110$ 14,729,391$

Fund balance—end. 27,326,463$ 12,171,756$ 12,107,430$ 11,559,540$ 12,496,020$ 13,848,655$ 14,274,110$ 14,729,391$ 15,646,199$

Ending fund balance as a % of expenditures (exc one-time) 51.12% 22.25% 20.74% 19.97% 21.31% 23.02% 23.16% 23.33% 24.22%

General Fund: 5-Year Revenue/Expense Model Moderate Revenue Growth

FY13 Budget Scenario: 2% Merit; Comp Adj in Jan.; Property Tax rollup; FY14: Phase 3 Comp Plan

Summary of All FundsFY13 Expenditures: $177,609,567

General34%

Capital Projects23%

Water Utility20%

Debt Service5%

Parks Funds4%

Other Funds2%

Fleet3%

ITS2%

Solid Waste2%

Airport5%

Budget Proposed

2011-2012 2012-2013

General $58,311,420 $59,436,976

Capital Projects 61,444,882 40,908,068

Water Utility 34,888,395 35,807,541

Debt Service 9,170,535 9,415,910

Parks & Recreation 7,639,894 7,700,036

Other Funds 3,306,622 2,957,533

Fleet Management 6,988,369 5,896,364

ITS 4,173,321 3,948,636

Solid Waste 2,890,573 3,203,130

Airport 7,307,218 8,335,373

TOTAL 196,121,229$ $177,609,567

Summary of All FundsFY13 Revenues: $177,609,567

Property Tax21%

Sales Tax19%

Fees & User Charges

28%

Franchise Tax8%

Other5%

Interfund Transfers6%

Intergovernmental5%

Interest1%

Accum. cap reserve7%

Budget Budget

2011-2012 2012-2013

Property Tax 36,160,081 37,494,294

Sales Tax 29,284,373 34,278,261

Fees & User Charges 44,388,105 49,188,241

Franchise Tax 15,430,308 14,396,746

Other 11,066,856 9,181,900

Interfund Transfers 14,906,963 11,413,678

Intergovernmental 4,582,306 8,492,415

Interest 1,578,699 1,255,542

Revenue Subtotal 157,397,691 165,701,077

Accum. capital reserves 38,723,489 11,908,490

TOTAL 196,121,180$ 177,609,567$

Enterprise FundsFY13: $48,725,734

Budget Proposed2011-2012 2012-2013 Change

Enterprise Funds $ 46,398,122 $ 48,725,734 5.0%

Harris Pk Rec Center,

1,379,690 , 3%

Airport, 8,335,373 , 17%

Water Utility, 35,807,541 , 73%

Solid Waste, 3,203,130 , 7%

Capital Project FundsFY13: $40,908,068

Budget Proposed2011-2012 2012-2013 Change

Capital Improvement Budget $ 61,444,682

$40,908,068 -33.4%

Water Utilities15,335,873

38%

Public Works13,679,000

33%

Tax Increment Financing Districts

9,996,179 24%

Parks and Recreation

504,000 1%

Public Safety340,000

1%

Other1,053,016

3%

Special Revenue FundsFY13: $7,105,512

Budget Proposed2011-2012 2012-2013

Summit Woods TDD $ 21,000 $ 21,000 Energy Efficiency Grant 265,996 ------Gamber Center 377,849 391,561 Legacy Park Com. Ctr. 1,900,318 1,890,168 Parks and Rec 3,105,995 3,144,429 Summit Waves 628,367 655,752

VAWA Grant Fund 101,114 101,114

Fiduciary Funds* 976,938 901,488Total $7,377,577 $7,105,512

Summit Woods TDD0%

Gamber Center6%

LPCC27%

Parks and Rec 44%

Summit Waves9%

VAWA1%

Fiduciary Funds 13%

*Fiduciary funds include: Cemetery, B&I, and CDBG.

Debt Service FundsFY13: $9,415,910

Budget Proposed

2011-2012 2012-2013 Change

City General Obligation $ 6,239,647 $ 6,439,647

Park Certificate of Participation 2,930,888 2,976,263

Total $ 9,170,535 $ 9,415,910 2.7%

Debt Serv68%

Park COP32%

Internal Service FundsFY13: $12,017,367*

Budget Proposed2011-2012 2012-2013 Change

Internal Service Funds $ 13,418,893 $ 12,017,367 -10.4%

Workers Comp630,631

5% CBS1,275,908

11%

WU Eq Repl125,000

1%

Fleet5,896,364

49%

ITS3,948,636

33%

*Funds not detailed in graph: Unemployment Trust, Short-Term Disability, and Insurance Trust.

FY13 Summary – All Funds

$ % General $58,311,420 $59,436,976 1,125,556 1.9%

Capital Projects 61,444,682 40,908,068 (20,536,614) -33.4%Special Revenue 7,377,577 7,105,512 (272,065) -3.7%

Debt Service 9,170,535 9,415,910 245,375 2.7%

Enterprise 46,398,122 48,725,734 2,327,612 5.0%

Internal Service 13,418,893 12,017,367 (1,401,526) -10.4%

TOTAL $196,121,229 $177,609,567 -$18,511,662 -9.4%

Variance from FY12

Budget

Fund Type FY12

Budget FY13

Recommended

2012 Projected Property Tax Levy(within Lee’s Summit R-7/Jackson County boundaries)

Total Proposed Levy: $8.9654 per $100 assessed valuation

*Other= Jr. College, Library, Mental Health, Handicap Workshop, and Mo Blind Pension

R-7 School District$6.1050

68%

City of Lee's Summit$1.5505

17%

Jackson County$0.5298

6%

Other*$0.7801

9%

Tax Levy Rate History

Color Key

Levy Decrease

Voluntary Rollback

Levy Increase

Voter approved rollup

Calendar FY General P&R Debt Service Total City

2001 (FY02) 0.9600 0.1700 0.4800 1.6100$ 2002 (FY03) 0.9600 0.1700 0.4800 1.6100$ 2003 (FY04) 0.9057 0.1604 0.4800 1.5461$ 2004 (FY05) 0.9057 0.1604 0.4800 1.5461$ 2005 (FY06) 0.8900 0.1576 0.4800 1.5276$ 2006 (FY07) 0.8900 0.1576 0.4800 1.5276$ 2007 (FY08) 0.8690 0.1539 0.4697 1.4926$ 2008 (FY09) 0.8690 0.1539 0.4697 1.4926$ 2009 (FY10) 0.8690 0.1539 0.4697 1.4926$ 2010 (FY11) 0.8966 0.1595 0.4697 1.5258$

2011 (FY12) 0.8966 0.1595 0.4697 1.5258$ 2012 (FY13) 0.9213 0.1595 0.4697 1.5505$

General Fund Property Tax Rateper $100 of Assessed Valuation

2009 2010 2011*2012*

* 2012***

Statutory Tax Rate Authorized

$.8837 $.8966 $.9213 $.9213

$.9401

Actual/Potential Tax Rate Levied

$.8690 $.8966 $.8966 $.8966

$.9401

Voluntary Reduction

($ .0147) none ($.0247) none (.0435)

Revenue Reduction

($243,290) $0 ($401,098) $0 ($692,267)

* 1.82% decrease in assessed valuation** Authorized levy rate for property tax revenue neutrality***Revenue neutrality with assumed 2% decrease in assessed valuation in 2012

Questions?

Staff Recommended Council Action:

A motion to direct staff to draft an ordinance adopting the proposed

Fiscal Year 2012-2013 annual budget