ferguson budget

8/2/2019 Ferguson Budget

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CITY OF FERGUSON

MISSOURI

ANNUAL OPERATING BUDGET

FISCAL YEAR 2011-2012


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TABLE OF CONTENTS

Budget Message...............................................................................................i ix

INTRODUCTION

Principal Officials ................................................................................................ 1Organizational Chart ........................................................................................... 2Mission Statement .............................................................................................. 3Budget Users Guide........................................................................................ 4 6

SUMMARYCombining Statements of Fund Balance and Revenues and Expendituresand Changes In Fund Balance ........................................................................... 7Combined Statements of Revenues and Expenditures and Fund Balance......... 8Comparative Combined Summary of Revenues by Source................................ 9Full-time Employee Levels by Department and Division.................................... 10

FISCAL POLICIESFiscal Policies ................................................................................................ 11 12Summary of Significant Accounting Policies .................................................. 13 16Summary of Significant Budgetary Procedures ............................................. 16 17Bonded Debt Schedule.................................................................................. 18 20

REVENUE NARRATIVERevenue Narrative......................................................................................... 21 35

GENERAL FUNDStatements of Revenues and Expenditures and Fund Balance......................... 36Revenue Detail by Source ............................................................................. 37 38Expenditures by Type and Department.............................................................. 39

Legislative Department ............................................................................... 39 41

Administration DepartmentCity Managers Division Expenditures ...................................................... 42 43Human Resources Division Expenditures ................................................ 44 45Information Technology Division Expenditures......................................... 46 47Corporate Expense Division Expenditures ............................................... 48 49

Finance Department .................................................................................... 50 51

Planning & Development............................................................................. 52 53

Public SafetyMunicipal Court Division Expenditures ..................................................... 54 55Police Department Division Expenditures................................................. 56 57Fire Department Division Expenditures .................................................... 58 59


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TABLE OF CONTENTS (continued)

GENERAL FUND (continued)Public Works

Public Works Administration Division Expenditures.................................. 60 61

Code Enforcement Division Expenditures ................................................ 62 63City Hall Building Division Expenditures ................................................... 64 65Municipal Services (Streets) Division Expenditures.................................. 66 67Municipal Services (Parks) Division Expenditures.................................... 68 69Municipal Garage Division Expenditures .................................................. 70 71

PARKS FUNDStatements of Revenues and Expenditures and Fund Balance......................... 72Revenue Detail by Source ................................................................................. 73Expenditures by Type and Department.............................................................. 74

Recreation DepartmentRecreation Division Expenditures............................................................. 75 76Splash at Wabash Division Expenditures ................................................. 77 78Concessions Division Expenditures.......................................................... 79 80Live Well Ferguson................................................................................... 81 82

SPECIAL REVENUE FUNDSFerguson Special Business District Fund

Statements of Revenues and Expenditures and Fund Balance ................... 83Revenue Detail by Source............................................................................ 83Department Description................................................................................ 84

Expenditures................................................................................................. 85

Sewer Lateral FundStatements of Budgeted Revenues and Expenditures ................................. 86Revenue Detail by Source............................................................................ 86

DEBT SERVICE FUNDSHalls Ferry TIF Debt Service Fund

Statements of Budgeted Revenues and Expenditures ................................. 87Revenue Detail by Source............................................................................ 87

Splash at Wabash Debt Service FundStatements of Budgeted Revenues and Expenditures ................................. 88

General Obligation Bond Debt Service FundStatements of Budgeted Revenues and Expenditures ................................. 89


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TABLE OF CONTENTS (continued)

CAPITAL PROJECTS FUNDSCapital Improvement Sales Tax Fund

Statements of Budgeted Revenues and Expenditures ................................. 90

Revenue Detail by Source............................................................................ 91

Local Improvement FundStatements of Budgeted Revenues and Expenditures ................................. 92

Downtown TIF Capital Projects FundStatements of Budgeted Revenues and Expenditures ................................. 93Revenue Detail by Source............................................................................ 94

Capital ProjectsSchedule of Capital Improvement Projects by Department

and Fund............................................................................................. 95 96Capital Projects Request Forms ........................................ CIP 1 to CIP 23

APPENDIXStatistical and Demographic Information ........................................................... 97Assessed Property Values................................................................................. 98Operating Parameters........................................................................................ 99Budget Resolution 2011-12 .............................................................................. 100CIP Budget Resolution 2012-2016.................................................................... 101Glossary of Terms........................................................................................ 102 104


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Fiscal Year 2011 2012 Budget City of Ferguson, Missouri



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June 28, 2011

Honorable Mayor James W. Knowles, III and City Council Members:

Transmitted herewith is the Proposed Annual Operating Budget for the City of Ferguson for thefiscal year beginning July 1, 2011 and ending June 30, 2012 (FY 2011-2012). It is beingsubmitted in accordance with Article VI, Section 6.3 of the City Charter which sets forth therequirements of the document that it must include the operating and capital expenditures, asummary, and any other such information necessary to explain the financial position of the City.

The annual operating budget is the policy document that sets the financial course for the Citysoperating goals in the next fiscal year. Together with the Five-Year Capital Improvement

Program, these two documents are the Citys most important financial policy documents. Theydefine the priorities for providing services to the community over the next year.

Budget PhilosophyThe annual budget document for the City of Ferguson acts as the Citys most important financialtool to establish goals for the upcoming fiscal year. It serves as a guide for City staff as theycarry out initiatives set forth by the City Council each year, providing a baseline for monitoringand controlling spending throughout the year. This has been the budget philosophy for the pastseveral years and will continue to be the guiding principle in the years ahead. The City monitorscurrent financial conditions on an ongoing basis and anticipates how projected revenues andexpenditures in the budget will affect the Citys overall financial position. City Administrationwill be vigilant during the course of the fiscal year to seek opportunities to maximize ourrevenues and ensure funds are spent in the most efficient way possible towards all projects,personnel, and equipment.

It is also important to recognize the budget is a tool used by the elected and appointed officials ofthe City. It offers a snap-shot view of a single year of revenues and expenditures and thereforecannot be used to determine the overall financial health of the City. Although it is extremelyvaluable in the planning process and works as a strong guideline, it is unable to account forunforeseen occurrences and related expenses that may, and ultimately do, occur each year.Likewise, as the policy of the Citys management calls for the maximization of revenues andefficient use of those resources, this document can only provide direction and assumptions basedon past experiences and professional estimates. Therefore, a more accurate account of the Citysfinancial well-being lies in how the City manages its financial situation from fiscal year to fiscalyear, and is able to adjust when occurrences inside or outside of the organization call for change.


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City Administration has historically taken a very conservative approach with respect toprojecting revenues and establishing expenditures for the annual budget. You will find that wecontinue that practice with the FY 2011-2012 Budget, to ensure proper funding for plannedexpenditures. While technically the national economy has entered a period of recessionrecovery, there is still a great deal of uncertainty and anxiety that keeps retail spending at levelsfar below those of the pre-recessionary period. This directly translates into reduced sales taxes,which account for about one-third of our FY 2011-2012 Budget. As I have mentioned duringprevious budget processes, municipalities continue to be challenged to find additional sources ofrevenue, simply to maintain current service levels for their residents and businesses. The Cityschallenge this coming year will be continuing to find ways to provide those services despite lessoverall revenue and rising costs.

Governmental bodies in the United States, and in particular municipalities, have seen largelydiminished revenues and revenue sources over the last few years. As a result, many cities aroundthe country have begun to eliminate different city services as a way to better align themselveswith what is being accepted as the new level for annual revenues, far below the heights reachedprior to the current economic crisis. Because Ferguson has been dedicated to maintaining ourcommunity as a desirable place to live and do business, the City Council has elected to continue

to operate at existing staffing levels for another year. A healthy reserve balance, along withsound financial management, has made this possible.

Over the last few years, the City had budgeted to utilize fund balance to offset operatingdeficiencies in its General Fund, but has actually been able to marginally build additionalsurplus. In part, these surpluses have arisen as a result of the Citys participation in class actionlitigation, and receipt of settlement proceeds from this litigation. However, it is widely agreedthat a surplus will be unlikely to occur again this year, without the introduction of new streams ofrevenue. And although employee salaries were frozen this year to help lessen the impact ofmaintaining current service levels, the City is fully expecting to utilize about $246,000 of ourUnreserved Fund Balance for general operations.

While the City will continue to operate at existing service levels this year, it is vital the CityCouncil continue to work together with City staff in addressing what has become accepted as astructural deficit. Essentially, with the significant loss of revenue and the inability to recapture itto previous levels, projections show the City simply does not have enough revenue to cover theexpenses of current service levels. This means the City must identify opportunities for both newrevenues and new efficiencies. This year, the City is poised to take an even greater leadershiprole within the region due to our recognized programs and our involvement in planning andvarious initiatives within St. Louis County. The City must utilize this role to seek out ways tocooperate even further with our neighbors to ensure the stability of not only Ferguson, but of ourneighboring municipalities, and the health of the region as a whole. To this end, the City

Council will be working this year in quarterly financial planning meetings to closely monitorrevenues and expenditures projected in the budget and to discuss any opportunities, as well asnecessary changes to our organization.

Major Themes and Objectives

The Citys focus within the budget will continue to be on strategic investment in infrastructureand community building, while recognizing new limitations and focusing on items the CityCouncil has deemed as essential. As mentioned before, this years budget reflects both theCitys dedication to maintaining existing services and continued focus on innovation.


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The major themes and important notes on the FY 2011-2012 Budget for the City of Ferguson areas follows:

City InfrastructureInfrastructure continues to be a primary focus for the City as it truly is the backbone ofour responsibility to the citizenry. All municipal services are impacted by the quality ofthe Citys infrastructure. In FY 2010-2011, the City anticipates spending over $637,000on street and sidewalk repair and construction, and another $280,000 for theimprovement of municipal facilities and parks. Some of the other larger capitalimprovement projects included improvements to the Plaza at 501 ($39,000), SplashWaterworks upgrades ($122,000), and a swipe-lock/I.D. system installed City-wide($37,000).

For FY 2011-2012, the City has budgeted approximately $1.8 million for streetimprovements. This includes the first phase of the Forestwood Drive ReconstructionProject, accounting for nearly the entire street budget at $1.7 million. This project willprimarily be funded by a federal transportation grant of $1.36 million, with the Citysmatching responsibility of $340,000. The other major project for the coming fiscal yearwill be the construction of the replacement for Fire House Number One. This project willbe funded by the bond issue voters approved in April of 2011. The total amount of thebond issue is $8 million.

Regional CooperationThe City remains dedicated to cooperating with area municipalities, institutions andcorporations, as well as regional governmental agencies. This past fiscal year, the Cityhas continued this effort through a number of joint projects and initiatives. With respectto the Ferguson-Florissant School District, as well as area private schools, the City, alongwith a host of volunteer citizens and organizations, has launched the Ferguson YouthInitiative. This program has been designed to pool the resources of area businesses,churches, schools, and service organizations to address the needs of children andadolescents in the City in an effort to offer additional educational and recreationalalternatives. The City has also continued its relationship with area colleges anduniversities through an expanded internship program. Students from University ofMissouri St. Louis, Washington University, St. Louis University and LindenwoodUniversity have had opportunities to further their knowledge in areas includingadministration, economic development, public relations, planning and finance, whileproviding invaluable service to the City. The West Florissant Avenue Corridor Studywas also continued from last year, into this fiscal year. This project teams Ferguson withfive other neighboring municipalities, St. Louis County and East West Gateway Councilof Governments. The purpose of the study is to examine options to reinvigorate

commerce along our shared thoroughfare.

During the next fiscal year, Ferguson will continue to nurture all existing relationships,and will be taking on new endeavors. With respect to area institutions of higher learning,the City will be working on several particularly exciting projects. First, staff will beworking with Washington University graduate students from Planning, Social Work,Law, and Architecture on two different projects. One project will address housing issuescaused by the tornado that occurred on April 22, 2011. The other project will focus onideas for reuse of homes and properties acquired by the City in the Plaza Heights area ofthe City. The City is also working in conjunction with students from the UM St. Louis


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Master of Public Policy Administration program, who will assist staff in designing amarketing program specifically geared towards area colleges and universities, promotinghousing, services, dining and entertainment options within Ferguson. The City will alsocontinue to work closely with regional groups such as the St. Louis County MunicipalLeague on legislation that affects Ferguson and other area cities, including recentdiscussions on altering the sales tax structure for municipalities in St. Louis County.

Economic DevelopmentSales tax revenue drives the scope of many City services and initiatives; thereforeeconomic development continues to be a major focus of Administration. This past year,Ferguson held a number of City tours for area developers to demonstrate the vitality ofFergusons many successful businesses, and to showcase areas the City is interested inredeveloping. Although these developers had expressed little interest in our communityhistorically, they are agreeing to examine the opportunities available in Ferguson andestablish an initial dialogue. Despite the continued lagging national economy, Fergusonhas seen a number of new businesses and renewed commitment from existing businesses.This year the City saw the opening of 25 new businesses. The City assisted two newbusiness owners in the City through Downtown TIF Fund redevelopment agreements;those being the Ferguson Bicycle Shop and the change in ownership of the Whistle Stop.This past fiscal year also saw the renewed interest of Sams Club, one of the Cityslargest retailers, through their commitment to a complete interior and exterior renovationproject set to begin during this fiscal year. The City also took steps towards futuredevelopment by acquiring commercial property along Florissant Road, to encouragecompatible development with the existing businesses in our Downtown Business District.The City purchased 320 and 830 S. Florissant Road using money available from theDowntown TIF Fund. Those properties will be marketed to desired business types, as setout in Fergusons Downtown Strategic Development Plan.

The City of Ferguson is classified as a point-of-sale municipality within St. Louis County

meaning sales taxes collected in Ferguson directly impact the Citys revenues. Over thenext fiscal year, the City will be implementing other strategies to attract new businessesto our community, and promote our existing commercial development. The City will beattempting to work closer with our area colleges and universities, as well as regionalemployers such as Emerson, Boeing, and Express Scripts, to show their employees thatFerguson can meet many of their needs with respect to goods and services. The positionof Community Development Coordinator has been restructured to better accommodatemuch of this educational and promotional work. The City will also continue to engagearea developers through this process to help define and target commercial opportunitiesbased upon the stated needs of our local corporations and institutions. Through theFerguson Special Business District, additional funds have been budgeted this year

specifically for advertising and promotion of our Downtown.

Community FocusThe City recognizes that its greatest asset is its dedicated citizens and many engagedneighborhoods. Neighborhood groups have been firmly established in nearly everycorner of the City and they are now working on their own to better the community. Thisis evidenced by the many volunteers who coordinate the numerous City events each year,as well as some of the on-going projects such as the Neighborhood Gardens. In additionto the Ferguson Youth Initiative, Live Well Ferguson has made great strides in this area.This past fiscal year saw the hiring of a Live Well Ferguson Program Manager, a position


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funded entirely through a grant from the Missouri Foundation for Health. This position iscompletely dedicated to the successful events and programs put on by Live Well, andfocuses on developing new ways to engage the community and encourage healthierlifestyles. The Citys landbanking in the Plaza Heights area also continued this past year.Its focus is to acquire dangerous or obsolete structures, for demolition and eventualredevelopment. Removing these troubled properties from the area not only removeseyesores in the neighborhoods, but also helps create a safer environment.

The City will continue with community being a primary focus this coming fiscal yearthrough a number of new programs and initiatives. In addition to continuing their manygreat established programs, the Live Well Ferguson Program Manager and theCommunity Development Coordinator will implement the Better Block Program thisFall. This project will be geared towards promoting improvement of a largely vacantstorefront area in Downtown Ferguson and experimenting with new strategies forcontinued development to improve the walkability of Downtown. With respect toaccessibility of the Downtown and the rest of the City, the Walkable/Bikeable Study isset to be completed this year by H3 Studios. The study promises to help guide theorganization in improvements that will better connect the community for our citizens and

encourage outdoor activity. The City will also be continuing its work in our historicneighborhoods. The Citys Planning and Development Department helped establish aNational Register of Historic Places District in the Old Ferguson West Neighborhood thisyear. This designation will open up new funding mechanisms for home owners to makeimprovements necessary to maintain the historic nature of their properties.

Financial Results

The following summarizes the Citys anticipated combined revenues, expenditures, revenuedeficiency, other financing source and change in fund balance for the two fiscal years endingJune 30, 2012:

2011 2012Forecast Budget

Revenues 16,207$ 18,278$ 2,071$Expenditures

Personnel 9,735 10,151 (416)Supplies & services 3,199 3,338 (139)

Capital expenditures & debt service 3,667 13,119 (9,452)16,601 26,608 (10,007)

Revenue deficiency (394) (8,330) (7,936)

Bond issue proceeds 8,000 8,000

Change in fund balance (394)$ (330)$ 64$

FISCAL YEAR ENDED JUNE 30,Notes: All amounts rounded to nearest $1,000.

Difference

Revenues

Like virtually every other municipality in the United States, the City operates in a verydisadvantageous economic environment. This environment has been created by the economicrecession which has evolved into a lagging growth recovery, with continued abnormally highunemployment and home foreclosures. That said, the City is fortunate that overall revenues have


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remained, and are anticipated to remain, relatively stable. Significant combined revenuevariations are as follows.

As with many states and municipalities, the City is highly dependent on sales tax receipts for asubstantial portion of its combined revenues. Depending on revenues from other sources this canbe anywhere from 1/3 to over 40% of total combined revenues. In fact, in the five years endingJune 30, 2010, sales tax collections from all sources, including those separately accounted for asTIF related revenues, have decreased from about $7,927,000 to $6,653,000 or about $1,274,000.

While the countrys national recession had officially ended in late calendar year 2009 or early2010, the City continued to experience erosion in its sales tax receipts collections until October2010, at which time year-over-year sales tax receipts collections began increasing. Theseincreases were not enough to offset erosion earlier in the year. Consequently, sales tax receiptscollections from all sources are expected to decrease another 3.7% to about $ 6,408,000 in FY2010-2011.

The aforementioned improvement in sales tax receipts collections are expected to continuethrough FY 2011-2012. This improvement is expected to result in increased collections of about

$158,000 from all sources to about $6,566,000 or about 2.5%.

FY 2010-2011 was the third of the last four fiscal years to be positively impacted by receipt oflitigation settlement proceeds. Total litigation settlement revenues were about $285,000 in thisperiod and are not expected to be repeated any time in the future.

Police department voluntary turnover of over 10% of the uniformed force, resulting fromretirements in FY 2009-2010, had the effect of increasing hiring and training time and reducingtime available for traffic enforcement. This situation persisted into early FY 2010-2011, whichresulted in decreased fines and revenues. Reversal of this trend began in December 2010. Sincethat time, month-over-month fines revenues have increased resulting in an anticipated increase of

almost $60,000 for FY 2010-2011. Fines revenues for this year are expected to be increased byan additional $400,000 as a result of the installation of two red light cameras.

The passage of the general obligation bond issue by the Citys voters in April 2010 results in twoseparate, new revenue events in FY 2011 2012. First, the City anticipates the levy and receiptof property related taxes of about $700,000. Second, included as an Other Financing Source,are anticipated bond issue proceeds of about $8,000,000.

The Citys Downtown TIF fund was the recipient of grants and donations of about $160,000 inFY 2010-2011. These are not expected to recur in the future.

The City anticipates receipt of about $1,360,000 in federal highway grants through East-WestGateway Council of Governments during FY 2011-2012. This is the first half of a two partproject which should be completed in FY 2012-2013.

Expenditures

While the City anticipates substantial capital improvement activity in FY 2011-2012, the Citysstrategic plan calls for maintaining current service levels across all funds and departments.Because of the economic impact on its revenues, the City has had, and anticipates continuing tohave, insufficient revenues to cover its expenses while maintaining current service levels.Consequently, the City has chosen to fund its anticipated revenue deficiency with reserves, while


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at the same time working as diligently as possible to minimize expenses. In short, as it has beenfor the past several years, expense control will continue to be the focus of this years spendingand next years budget.

The following discussion summarizes the Citys anticipated cumulative expenses for FY 2011-2012.

The City anticipates personnel related expenditures to increase about $416,000 in FY 2011-2012.The most significant personnel related increase is for pension plan funding. It is the Cityspolicy to fully fund all actuarially recommended pension costs. This year this amount rises about$163,000 to $487,000. This increase is in large part the result of market value erosion of pensionplan assets as well as aging demographics. The City anticipates such costs to lessen in the futureas this current cost approximates normal cost and plan assets have experienced significant recentmarket appreciation.

The City anticipates employee related insurance costs, both health and workers compensation,to continue to rise at their historic rates, much faster than inflation. Accordingly, increases inthese costs are anticipated to be about $146,000 in FY 2011-2012.

Employee turnover results in less than full staffing. Assuming full staffing at all positions in FY2011-2012, the additional budgeted costs will be about $117,000.

Supplies and services expenditures are increasing $139,000 in FY 2011-2012 from those of theprior year. The majority of this increase is the result of two new expenditure types. First, about$80,000 is related to new expenditures for the Live Well Ferguson department of the Parks fund.These expenditures are entirely underwritten by a grant from the Missouri Foundation for Health.Expenditures of the Special Business District fund are increasing about $33,000. This increase isprincipally geared towards greater advertising expenditures to increase brand awareness of theDowntown Business District.

Finally, all other supply and service expenditures are increased about $20,000 in the day-to-day,out-of-pocket, expenditures of the City. This small increase is an indication the City Council andstaff have met the challenge of maintaining service levels while holding cost increases to anabsolute minimum. Any further reductions to expenditures in this area will be achieved onlythrough a closer examination of the services provided by the City, and how potential changeswould affect both the budget and residents.

Overall, capital expenditures are increasing in FY 2011-2012 by about $9,452,000. The twoprincipal expenditure increases are for the replacement construction of Fire House Number Oneof approximately $7.8 million, and construction of Phase 1 of Forestwood Drive Reconstruction

of approximately $1.7 million. As a result of these human resource intensive projects, the Cityscapital improvements program is being curtailed this year. This expenditure reduction issubstantially offset by an increase in debt service and issue costs of just over $600,000 related tothe anticipated issue of general obligation bonds.

Conclusion

FY 2010-2011 presented both a number of challenges and accomplishments the City shouldpride itself in overcoming and accomplishing. While Ferguson continued to overcome financialshortcomings brought on by the emerging dynamic of the new national economy, there wereother significant tests to our community. Not the least of which was the tornado that occurred on


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April 22, 2011. This storm, which caused devastation through several communities in St. LouisCounty, severely affected hundreds of homes and businesses in Ferguson. And although theclean-up efforts are in the completion stages, and the rebuilding effort has only just begun, theresolve of the citizens, elected officials and municipal staff was clearly evident through theirunified efforts. We still have yet to see what the financial impact will be on the Citys financeswhile Federal and State agencies are determining aid for our community, but the entire Cityshould be pleased with how the event that evening was addressed, and how the following days ofclean-up and assistance to those affected was administered. With respect to significantaccomplishments, the successful passage of Proposition S for the construction of a new FireHouse Number One was a tremendous achievement for the public officials and the citizens. Thisnew, state-of-the-art facility will replace a structurally unsound and obsolete fire house andimprove service delivery, while also adding to the character of our downtown and positioning itin a place more appropriate for this use. The City, of course, thanks our voters for theiroverwhelming support as evidenced by the election.

For FY 2011-2012, the City will continue to face challenges brought on by the state of thenational economy. Although we are pleased that service levels will continue at current levels forthis coming fiscal year, it is recognized that this comes only through use of fund balance. It is

also important to note that City employees will also make sacrifices, forgoing salary increases aspart of necessary budget cuts. However, as with last year, the City Council along with staff willwork diligently in reviewing financial forecasts and formulating strategies to provide for aresponsible budget the City will be able to sustain well into the future. To this end, the City willagain be engaging in financial planning work sessions, and reviewing new financial trend dataavailable at the end of each financial quarter. This City will also be making a concentrated effortto engage the public with any resulting proposed changes to City services for input andresolution. The future continues to be bright for our City, however it will take a combined effortof City officials and the citizenry to establish new means at accomplishing our goals.

This budget is the result of a collaborative effort between the City Council and City staff. This is

a very intensive process that requires many of hours of hard work over the course of a number ofmonths, by all persons involved. In doing so, we have ensured that City funds are used asefficiently as possible and in the best interest of Fergusons citizens. I would like to thank theMembers of the Ferguson City Council, our Department Directors and the many other employeeswho worked hard to finalize this proposed budget. Therefore, City Administration recommendsthe FY 2011-2012 Budget be adopted as presented.

Respectfully submitted,

John ShawCity Manager


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INTRODUCTION


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PRINCIPAL OFFICIALS

MAYOR James W. Knowles III

COUNCIL MEMBERS Mark Byrne

Kynan Crecelius

Fran Grecco

Dwayne T. James

Tim Larson

Michael Salant

CITY MANAGER John Shaw

ASSISTANT TO THE CITY MANAGER Pam Hylton

CHIEF FIRE DEPARTMENT Steve Rosenthal

CHIEF POLICE DEPARTMENT Thomas Jackson

DIRECTOR OF FINANCE Jeffrey Blume

DIRECTOR OF PLANNING AND DEVELOPMENT Rosalind Williams

DIRECTOR OF PUBLIC WORKS Terry ONeil

SUPERINTENDENT OF PARKS & RECREATION Stan Kreitler

CITY CLERK Megan Asikainen


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Fiscal Year 2011 2012 Budget

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Assistant to theCity Manager

Chief of PoliceChief of FireDepartment

Director of FinanceDirector of Public

Works

Superintendent ofParks and

Recreations

Personnel Patrol EmergencyMedical

GeneralAccounting

FacilityMaintenance

General Recreation

City Marketing Investigation EMT Training Revenue Collection Street Maintenance Swimming Pool

Special Projects Records Fire Suppression Cash Management Municipal Garage Concessions

Public Relations Communication Fire Prevention Purchasing Engineering Special Events

Information

Technology

Juvenile EmergencyPreparedness

Payroll Park Maintenance Senior CitizensActivities

Detention ProtectiveInspections

Municipal Courts

ADMINISTRATIVE ORGANIZATIONAL CHART

City Clerk City Attorne

City Council

Citizens of Ferguson, Missouri

City Manager


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VISION OF FERGUSONFerguson, the Community of Choice for

residents and businesses

COUNCIL GOALS FOR FERGUSON

Attract and retain quality residentsImprove the Citys image as a quality place to live and workImprove communication between and among elected officials,staff, and the community


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BUDGET USERS GUIDE

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The FY 2011 - 2012 budget document of the City of Ferguson, Missouri (the City) is organized into tensections, as follows:

Introduction Parks Fund

Budget Summaries

Special Revenue Funds Fiscal Policies Debt Service Funds Revenue Narrative Capital Projects Funds General Fund Appendix

The following is a brief overview of each section.

A. INTRODUCTION

The Introduction begins with the list of Elected City Officials, followed by the City Staff OrganizationalChart. The next page, the Vision of Ferguson, establishes the goals of the City Council.

B. BUDGET SUMMARY

The Budget Summary section is designed to provide the reader with an overview of the Citys FY 2011 -2012 budget. The statements or schedules presented in this section are for all budgeted City funds. TheCity budgets all operating, special revenue, debt service and capital project funds. It does not budget itsgovernment-wide, trust or agency funds.

This section begins with the Combining Statements of Fund Balance and Revenues and Expendituresand Changes in Fund Balance for the two years ending June 30, 2012. Following this summary is theCombined Statement of Budgeted Revenues, Expenditures, and Changes in Fund Balance - All Fundsforeach of the three years ending June 30, 2012. This summary is followed by a schedule of ComparativeCombined Summary of Revenues by Sourcefor the three years ending June 30, 2012. The last schedulein this section is Full Time Employment Levels by Department and Division for the three years ending

June 30, 2012.

C. FISCAL POLICIES

The Fiscal Policies section defines City policies and objectives designed to promote and provideguidance in maintaining the fiscal health of the City. Specific policies addressed include the following:

Revenue Policy Operating Policy Accounting Policy Cash and Investment Policy Debt Policy Capital Improvement Policy

This section also defines other significant policies and procedures of the City including the following: Summary of Significant Accounting Policies Summary of Significant Budgetary Procedures Bonded Debt Schedule


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D. REVENUE NARRATIVEThe Revenue Narrative section provides comment, insight and background on the significant revenuesources of the City. This section provides a comprehensive discussion of all significant revenuesincluding the underlying assumptions for the revenue estimates as well as revenue trends. In addition, foreach significant revenue source, graphic illustration of received or anticipated revenues for each of theten years ending June 30, 2012 is presented.

E. GENERAL FUND

This section begins with a Combined Statement of Budgeted Revenues and Expendituresfor each of thethree years ending June 30, 2012. This statement is followed by two schedules, Revenue Detail bySourceand Expenditures by Category, for each of the five years ending June 30, 2012.

The General Fund budget includes detail for each of the following departments and their respectivedivisions:

Legislative Administration Finance Planning & Development Public Safety

Public Works

The budget for each individual division includes three parts: a budgeted personnel summary, adepartmental narrative and the departments budgeted expenditures for each of the five years endingJune 30, 2012. The departmental narrative describes the departments responsibilities and activities.

F. PARKS FUND

Like the General Fund, this section begins with a Combined Statement of Budgeted Revenues andExpenditures for each of the three years ending June 30, 2012. This statement is followed by twoschedules, Revenue Detail by Sourceand Expenditures by Category, for each of the five years endingJune 30, 2012.

The Parks Fund budget includes detail for each of the following divisions: Recreation Splash at Wabash Concessions Live Well Ferguson

The budget for each individual division includes three parts: a budgeted personnel summary, a divisionalnarrative and the divisions budgeted expenditures for each of the five years ending June 30, 2012. Thedivision narrative describes the divisions responsibilities and activities.

G. SPECIAL REVENUE FUNDS

This section presents budgeted revenues and expenditures for the Citys two special revenue funds: theFerguson Special Business District (FSBD) and the Sewer Lateral Program.

Each of the funds presented in this section is represented by two statements. The first is a CombinedStatement of Budgeted Revenues and Expenditures for each of the three years ending June 30, 2012.The second is a schedule of Revenue Detail by Sourcefor each of the five years ending June 30, 2012.


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H. DEBT SERVICE FUNDS

This section presents the budgeted revenues and expenditures for the Citys three debt service funds: theGeneral Obligation Debt Service Fund, the Halls Ferry TIF Debt Service Fund and the Splash at WabashDebt Service Fund.

Each of the funds presented in this section is represented by two statements. The first is a CombinedStatement of Budgeted Revenues and Expenditures for each of the three years ending June 30, 2012.

The second is a schedule of Revenue Detail by Sourcefor each of the five years ending June 30, 2012.

More detail on the long-term debt obligations of the City is presented in the Fiscal Policy section of thebudget, under Bonded Debt Schedule.

I. CAPITAL PROJECTS FUNDS

The Capital Projects Funds identify the items or projects incorporated in the FY 2011 - 2012 budget. Thissection itemizes the project, the budgeted amount and the fund where the amount is budgeted. Thefollowing funds are included in this section:

Capital Improvement Sales Tax Fund Local Improvement Fund

Downtown TIF Fund

The first page of each of the funds in this section provides a Combined Statement of Budgeted Revenuesand Expenditures for each of the three years ending June 30, 2012. This statement is followed by aschedule of Revenue Detail by Sourcefor each of the five years ending June 30, 2012.

Following the statements for all capital projects funds is the Schedule of Capital Improvements Projectsby Department and Fund for the two years ending June 30, 2012. This schedule is a single listing of allauthorized capital projects for both periods for all funds, including the Parks Fund. These projects arelisted in the order of their fund and department.

At the end of the capital improvements schedule is a table entitled Distribution of Capital Improvementsby Fund and Department. This table cross references total capital improvement costs for the two fiscal

years ending June 30, 2012 by type or account (e.g., building and grounds, equipment, vehicles, othercapital projects, street and sidewalk replacement and debt service) for each fund and general ledgeraccount.

Each capital improvement project for the fiscal year ending June 30, 2012 listed on this schedule issupported by a Capital Project Request Form. All Capital Project Request Forms follow the capitalimprovement projects schedule and are cross referenced to the schedule. The capital projects requestforms provide a detailed description of the project, as well as its funding schedule, funding source and its

justification, goals and impact.

J. APPENDIX

This is the final section of the budget which includes the following information: Statistical and Demographic Data Copy of Approved Budget Resolution Copy of Approved 5-year Capital Budget Resolution Glossary


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SUMMARY


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7

Total revenues 11,117$ 2,033$ 27$ 199$ 878$ 4$ 1,317$ 4$ 628$ 16,207$

EXPENDITURES

Personnel 9,256 479 9,735

Supplies and services 2,663 310 123 110 30 3,236

Capital, including debt service 208 864 264 1,973 358 3,667

Total expenditures 11,919 997 123 110 864 264 1,973 - 388 16,638

Excess (Deficiency) of Revenues Over(Under) Expenditures

(802) 1,036 (96) 89 14 (260) (656) 4 240 (431)

Transfers from (to) other funds 744 (1,038) 95 (10) (13) 261 57 - (96) -

Change in Fund Balance (58) (2) (1) 79 1 1 (599) 4 144 (431)

Beginning of year, July 1 8,447 973 1 619 1,117 295 2,424 403 615 14,894

End of year, June 30 8,389$ 971$ -$ 698$ 1,118$ 296$ 1,825$ 407$ 759$ 14,463$

TOTAL REVENUES 11,250$ 2,043$ 27$ 207$ 878$ 4$ 702$ 2,699$ 4$ 464$ 18,278$

EXPENDITURES

Personnel 9,634 517 10,151

Supplies and services 2,685 390 156 110 35 3,376Capital, including debt service 336 862 264 618 10,988 50 13,118

Total expenditures 12,319 1,243 156 110 862 264 618 10,988 - 85 26,645

Excess (Deficiency) of Revenues Over

(Under) Expenditures

(1,069) 800 (129) 97 16 (260) 84 (8,289) 4 379 (8,367)

Bond Issue Proceeds 8,000 8,000

Transfers from (to) other funds 785 (1,032) 129 (10) (13) 261 (7,835) 7,835 - (119) 1

Change in Fund Balance (284) (232) - 87 3 1 249 (454) 4 260 (366)

Beginning of year, July 1 8,389 971 - 698 1,118 296 - 1,825 407 759 14,463

End of year, June 30 8,105$ 739$ -$ 785$ 1,121$ 297$ 249$ 1,371$ 411$ 1,019$ 14,097$

CITY OF FERGUSON, MISSOURIANNUAL OPERATING FORECAST AND BUDGET

COMBINING STATEMENTS OF FUND BALANCE AND

REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE

General ParksSpecial

Business

District

TotalLocalIm-

prove-

ment

Capital

Improve-ments

Sales

Tax

FUND NAME OR DESCRIPTION

Operating Special Capital Project

Down-

town TIF

SplashDebt

Service

Debt Service

GOBond

Debt

Service

Note: The Fund Balance of each fund is the total fund balance without regard to its accounting character;namely, reserved or unreserved.

Sewer

Lateral

HallsFerry TIF

Debt

Service

STATEMENTS OF FUND BALANCE

STATEMENTS OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE

[NOTE: All amounts rounded to nearest thousand dollars.]

BUDGET AS OF AND FOR THE FISCAL YEAR ENDING JUNE 30, 2012

FORECAST AS OF AND FOR THE FISCAL YEAR ENDING JUNE 30, 2011


STATEMENTS OF FUND BALANCE


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2010 2011 2012

Actual Forecast Budget


REVENUES

Sales Tax 5,981,478 5,791,100 5,949,500Utility Gross Receipts Tax 2,643,673 2,846,900 2,468,500

Intergovernmental 1,133,538 1,131,300 1,074,100

Property Taxes 1,206,583 1,121,000 1,866,800

Service Charges and Assessments 897,207 981,300 969,100

Fines and Forfeitures 1,476,103 1,545,300 2,020,300Licenses and Permits 463,113 470,800 471,100

TIF Related Taxes 1,339,737 1,313,300 1,313,300

Sewer Lateral Fees 168,342 181,500 187,500

Other Income 773,052 826,000 1,957,000

TOTAL REVENUES 16,082,827 16,208,500 18,277,200

EXPENDITURES

General Fund 11,130,178 11,881,600 12,281,000

Park Fund 1,061,513 996,700 1,242,500Special Revenue Funds

Sewer Lateral 101,578 110,000 110,000

Ferguson Special Business District 68,584 123,200 156,200

Debt Service Funds

Halls Ferry TIF Fund 818,168 863,900 862,300

Splash at Wabash COPs 263,912 263,800 263,900General Obligation Bond 618,000

Capital Projects Funds

Capital Improvement Sales Tax 1,524,623 1,973,200 10,988,100Downtown TIF 1,175,801 388,400 84,500

TOTAL EXPENDITURES 16,144,358 16,600,800 26,606,500

(61,531) (392,300) (8,329,300)

Other Financing Source: Bond Issue

Proceeds

8,000,000

(61,531) (392,300) (329,300)

FUND BALANCE

Beginning of year, July 1 14,996,783 14,935,252 14,542,952End of Year, June 30 14,935,252$ 14,542,952$ 14,213,652$

(Deficiency) of Revenues (Under) Expenditures

Fiscal Year Ending or Ended June, 30

CITY OF FERGUSON, MISSOURI

FISCAL YEAR 2011 - 2012 ANNUAL OPERATING BUDGET

COMBINED STATEMENTS OF REVENUES AND EXPENDITURES AND FUND BALANCE

ALL FUNDS

Change in Fund Balance


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2010 2011 2012Actual Forecast Amount % Budget Amount %

REVENUES

Sales Tax 5,981,478$ 5,791,100$ (190,378)$ -3% 5,949,500$ 158,400$ 3%

Utility Gross Receipts Tax 2,643,673 2,846,900 203,227 8% 2,468,500 (378,400) -13%Intergovernmental 1,133,538 1,131,300 (2,238) 0% 1,074,100 (57,200) -5%

Property Taxes 1,206,583 1,121,000 (85,583) -7% 1,866,800 745,800 67%

Service Charges and Assessment 897,207 981,300 84,093 9% 969,100 (12,200) -1%Fines and Forfeitures 1,476,103 1,545,300 69,197 5% 2,020,300 475,000 31%

Licenses and Permits 463,113 470,800 7,687 2% 471,100 300 0%

TIF Related Taxes 1,339,737 1,313,300 (26,437) -2% 1,313,300 - 0%

Sewer Lateral Fees 168,342 181,500 13,158 8% 187,500 6,000 3%Other Income 773,052 826,000 52,948 7% 1,957,000 1,131,000 137%

TOTAL REVENUES 16,082,827 16,208,500 125,673 1% 18,277,200 2,068,700 13%

EXPENDITURES

General Fund 11,130,178 11,881,600 751,422 7% 12,281,000 399,400 3%Park Fund 1,061,513 996,700 (64,813) -6% 1,242,500 245,800 25%

Ferguson Special Business Distric 68,584 123,200 54,616 80% 156,200 33,000 27%

Special Revenue Funds -Sewer Lateral 101,578 110,000 8,422 8% 110,000 - 0%

Debt Service Funds -

Halls Ferry TIF Fund 818,168 863,900 45,732 6% 862,300 (1,600) 0%

Splash at Wabash COPs 263,912 263,800 (112) 0% 263,900 100 0%General Obligation Bond - - - - 618,000 618,000 0%

Capital Projects Funds -

Capital Improvement Sales Tax 1,524,623 1,973,200 448,577 29% 10,988,100 9,014,900 457%

Local Improvement - - - - -

Downtown TIF 1,175,801 388,400 (787,401) -67% 84,500 (303,900) -78%

TOTAL EXPENDITURES 16,144,358 16,600,800 456,442 3% 26,606,500 10,005,700 60%

(Deficiency) of Revenues

(Under) Expenditures (61,531) (392,300) (330,769) (8,329,300) (7,998,531) 2039%

Other Financing Source:

Bond Issue Proceeds

- - -8,000,000 8,000,000 N/A

Change in Fund Balance (61,531)$ (392,300)$ (330,769)$ 538% (329,300)$ 1,469$ 0%

Difference Difference



COMBINED STATEMENTS OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE

ALL FUNDS


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Fiscal Year Fiscal Year Fiscal Year

2009 - 2010 2010 - 2011 2011 - 2012

City Council and Clerk 10 1 1 1Administration:

City Manager's Office 11 3 3 2Human Resources 14 1 1 1Information Technology 23 1 1 1

Finance 25 3 3 3

Planning & Development:Planning & Development 28 4 4 4

Public Safety:Municipal Court 12 3 3 3Police 40 63 63 63

Fire 41 27 27 27Public Works:

Administration 13 3 3 2Code Enforcement 32 6 6 6Municipal Services:

Streets and Parks 51 16 16 16Municipal Garage 95 3 3 3

Parks & Recreation 71 4 4 4

Total Full-time Permanent Employment:Beginning of Fiscal Year 138 138 136Beginning of Prior Fiscal Year 140 138 138

Net Change -2 0 -2

Department/Division



FULL-TIME EMPLOYMENT LEVELS BY DEPARTMENT AND DIVISION

Employees


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FISCAL POLICIES


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FISCAL POLICIESA. PURPOSE

The Council and staff of the City of Ferguson, Missouri (the City) have many important responsibilities tothe Citys residents and corporate citizens. Among those responsibilities are to properly account forpublic funds, to manage municipal finances wisely and to plan for adequate funding of services andfacilities required or desired by the public. The purpose of establishing a set of fiscal policies is to

promote public trust. By adopting a set of fiscal policies, the City establishes the framework under whichit will conduct its fiscal affairs, ensuring that it is and will continue to be able to provide and fundappropriate local government services.

The Citys fiscal policies have specific objectives designed to promote its fiscal health. These objectivesare to:

1. Maintain Council policy-making ability by ensuring that important fiscal decisions are not driven byemergencies or financial problems

2. Provide Council with information so that policy decisions can be made timely and accurately3. Provide sound financial principles to guide Council and management in decision making4. Employ revenue policies which attempt to prevent undue reliance on a single source of revenue

and which distribute the cost of municipal services fairly among all programs, as appropriate5. Protect and maintain the Citys credit rating6. Ensure legal compliance with the budget through systems of internal control

The Citys fiscal policies are separated into the following areas: Revenue Cash Operating Debt Accounting Capital Improvements

B. REVENUE POLICY

1. The City will continually engage in efforts designed to both broaden and diversify its revenuebase and to prevent revenue shortfalls due to reliance on a single revenue source, wherepossible

2. All existing and potential revenue sources will be reviewed annually to ensure the Citysunderstanding of revenue trends and circumstances are kept current

3. Single event revenues will be used only for single event expenditures. The City will avoid usingtemporary revenues to fund ongoing services.

4. Monthly reports comparing actual to budgeted revenues will be prepared and presented to theCity Manager, the Mayor, and the City Council

5. At a minimum, user charges and fees will be established at a level related to the cost of providingthe service

C. OPERATING POLICY

1. When necessary, where appropriate and as required by circumstances, the City will institute

expenditure controls in an attempt to ensure that current operating expenditures will not exceedcurrent operating revenues

2. Monthly reports comparing actual to budgeted expenditures will be prepared and presented to theCity Manager, the Mayor, and the City Council

3. Program measurements will be part of the annual operating budget4. The City will maintain a competitive pay structure for its employees5. The Citys comprehensive annual financial report and its annual budget will be submitted to the

Government Finance Officers Association for the purpose of obtaining the awards presented ineach category


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Remainder of this page

intentionally left blank

D. ACCOUNTING POLICY

1. The City will use generally accepted accounting principles (GAAP) in recording all transactionsand in all external financial reporting. These principles will be monitored and updated, asrequired.

2. An annual audit will be performed by an independent public accounting firm, which will issue itsprofessional opinion on the fair presentation of the Citys financial statements and a managementletter describing items or issues which, in its opinion, require managements attention

3. As required, full disclosure will be made in the Citys external financial statements and bondrepresentations

4. Financial systems will be maintained to monitor revenues and expenditures on a monthly basis,with an analysis and adjustment of the annual budget at appropriate times

E. CASH AND INVESTMENT POLICY

1. The City of Ferguson will invest idle funds in obligations of the United States Treasury and UnitedStates agencies, obligations of the State of Missouri, or the City itself, time deposit certificatesand repurchase agreements as authorized by Missouri state statutes

2. Public funds will be invested in a manner which will provide the highest investment return with themaximum security while meeting the daily cash flow demands of the City and conforming to all

state and local statutes governing the investment of public funds3. The City will monitor compliance with the Citys Investment Policy that stipulates the objectives,delegation of authority, ethics and conflicts of interest, authorized financial dealers andinstitutions, authorized and suitable investments, collateralization, safekeeping and custody,diversification, maximum maturities, internal controls, performance standards, and reportingrequirements

F. DEBT POLICY

1. The City will not issue debt to finance operating expenditures2. Capital projects which are financed using debt instruments or capitalized lease obligations will be

financed for a period not to exceed the useful life of the underlying project asset3. The City will follow bonded indebtedness requirements, as required by Sections 95.115 and

95.120 of the Missouri Revised Statutes (1986) which limit such debt to 10% of the assessedvalue of taxable tangible property, except in the case of street related projects where the limit is20%

G. CAPITAL IMPROVEMENT POLICY

1. Annually, City staff will prepare for the Councils adoption, a five year Capital ImprovementProgram (CIP) which will list each capital project, its estimated cost, its description andanticipated funding source. Future operating costs associated with new capital improvements willbe projected and included in the operating budget forecast, as required.

2. The City will determine and use the most effective and efficient method for financing all newcapital projects


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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Ferguson, Missouri (the City) was incorporated on November 12, 1894. The City operatesunder a City Manager/Council, home rule charter form of government. The present Charter of the Citywas adopted February 3, 1998. Services provided by the City to its approximately 22,000 residents and1,200 businesses include public safety (police and fire protection), street and sidewalk maintenance,improvement and/or replacement, cultural and recreational activities, public improvements, planning andzoning and general governmental services.

The financial statements of the City are prepared in conformity with U.S. generally accepted accountingprinciples (GAAP) as applied to government units. The Governmental Accounting Standards Board(GASB) is the accepted standard-setting body for establishing governmental accounting and financialreporting principles. The City's significant accounting policies are as follows:

A. THE FINANCIAL REPORTING ENTITY

The City defines its financial reporting entity in accordance with provisions established by GASB. GASBrequirements for inclusion of component units are primarily based upon whether the City's Council, itsgoverning body, has any significant amount of financial accountability for potential component units(PCU). The City is financially accountable, if it appoints a voting majority of a PCU's governing body andis able to impose its will on that PCU and there is a potential for the PCU to provide specific financial

benefits to or, impose specific financial burdens on the City. Based on these criteria, the City hasdetermined that its financial reporting entity consists of the City (the primary government) and oneblended component unit, the Ferguson Special Business District (FSBD).

B. FUND ACCOUNTING

The City uses funds and account groups to report its financial position and results of operations. Fundaccounting is designed to demonstrate legal compliance and to aid financial management by segregatingtransactions of certain government functions or activities.

A fund is a separate accounting entity with a self-balancing set of accounts. An account group is afinancial reporting device designed to provide accountability for certain assets and liabilities that are notrecorded in the funds because they do not directly affect net expendable available financial resources.

Funds are classified into three categories: governmental, proprietary, and fiduciary. Each category, inturn, is divided into separate fund types.

1. Governmental Funds - Governmental funds are those through which most governmentalfunctions of the City are financed. The acquisition, use, and balance of the Citys expendablefinancial resources and related liabilities are accounted for through governmental funds. The Cityreports the following governmental funds:

OPERATING FUNDSa. The General Fund is the primary operating fund of the City. It is used to account for all

financial resources, except those required to be accounted for in another fund.

b. The Parks Fund is used to account for the receipt of taxes levied on all property within theCity for the purpose of providing public park facilities, to account for expenditures forrecreational and park purposes and to account for revenues derived from recreationalprogram fees. The Parks Fund also is used to account for the cent Parks and StormwaterSales Tax, approved by voters in November 2004. In adopting the legislation locally andplacing the measure before the Citys voters, the City Council chose to reserve these taxesstrictly for parks operations and improvement purposes.

DEBT SERVICE FUNDSa. The General Obligation Bond Debt Service Fund is established to (1) account for the sale

proceeds of the Citys sole general obligation bond anticipated to occur in Fall 2011 andrelated issuance costs, (2) transfer acquisition and construction costs to the CapitalImprovement Sales Tax Fund, (3) levy and collect property taxes and (4) make all debtservice payments.


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b. The Halls Ferry TIF Bonds Fund was established as required by state statutes to accountfor payments in lieu of taxes and incremental economic activity [nee Sales] taxes received inthe Halls Ferry Tax Increment Financing District. It was originally used to pay principal andinterest on $8,385,000 of tax increment financing bonds issued September 12, 1997. Thesebonds were refinanced on March 1, 2005 by Ordinance number 2005-3230, authorizingissuance of tax increment revenue bonds, Series 2005 in the amount of $7,370,000.

c. The Splash @ Wabash Pool Project - Certificates of Participation Fund was establishedto account for funds appropriated in the Parks Fund budget to pay principal and interest on$3,480,000 of Certificates of Participation issued on October 3, 2002 for the purpose ofupgrading the Citys pool and recreation facilities located in January-Wabash Park.

SPECIAL REVENUE FUNDSa. The Special Business District Fund was established to account for the proceeds of a

special business license fee levied on all businesses within the specified boundaries of theFerguson Station Special Business District and for expenditures made for the purpose ofimproving, promoting and attracting new businesses to the District.

b. The Sewer Lateral Fund is a Special Revenue Fund that is used to account for the proceedsof an annual fee levied on all residential property of six or less dwelling units for the repair ofsewer lateral service lines and for expenditures of said proceeds for repairing such lines.

CAPITAL PROJECT FUNDS

a. The Capital Improvements Sales Tax Fund was established to receive collection of taxesof the cent Capital Improvements Sales Tax levied on all sales within the Citysboundaries, as well as any other capital asset related revenues. The purchase of all capitalassets, except those made by the Parks Fund or the Vehicle Replacement Fund, are madeby the Capital Improvements Sales Tax Fund.

b. The Downtown TIF Redevelopment Fund is a Capital Projects Fund established to accountfor payments in lieu of taxes and the incremental economic activity taxes received in theDowntown Tax Increment Financing District and used to finance downtown redevelopmentactivities and projects.

c. The Local Improvement Fund is a Capital Projects Fund that was established and ismaintained in accordance with the City Charter. The fund consists of the original bond issuewhich established the fund, subsequent transfers from general revenue and interest on thosefunds. The $200,000 proceeds of the original bond issue may not be withdrawn from thisfund and may be used only to finance special assessments for public improvements.

2. The City sponsors a pension plan, City of Ferguson, Missouri Pension Plan (the Plan), forsubstantially all full-time employees. The Plan is accounted for in essentially the same manneras a proprietary fund. Contributions to the Plan are appropriated and made from the CitysGeneral Fund, based on actuarially developed recommendations.

3. The City maintains two fiduciary type funds. They are both agency funds. They are custodial innature and do not involve the measurement of results of operations. In addition, the City retainsno equity interest in these funds. They are

a. The Bail Bond Fund. This fund is used to account for monies received from privateindividuals for the cash bonds required by City ordinance.

b. The Victorian Plaza Fund is used to account for private donations to be used for aestheticimprovements made in the downtown business district.

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENTPRESENTATION

The accounting and financial reporting treatment applied to a fund is determined by its measurementfocus. All governmental funds are reported using the economic resources measurement focus. With thismeasurement focus, revenues are recognized as soon as they are both measurable and available.


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Revenues are considered to be available when they are collectible within the current period or soonenough thereafter to pay liabilities of the current period. For this purpose, the government considersrevenues to be available, if they are collected within 60 days of the end of the fiscal period.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,debt service expenditures, as well as expenditures related to claims and judgments are recorded onlywhen payment is due.

Property, sales and franchise taxes, licenses, some grants and interest associated with the current fiscalperiod are all considered to be susceptible to accrual and so have been recognized as revenues of thecurrent fiscal period. All other revenue items are considered to be measurable and available only whencash is received by the government. This includes licenses and permits, charges for services, fines andforfeitures, and miscellaneous revenues.

D. CASH, CASH EQUIVALENTS AND INVESTMENTS

Cash and cash equivalents include amounts in demand and time deposits, as well as short-terminvestments with a maturity date within three months of the date acquired. Statutes authorize the City toinvest in obligations of the U.S. Treasury and U.S. agencies and instrumentalities and repurchaseagreements. In addition, the Pension Plan, conforms with state statutes related to investments by

insurance carriers and, as such, is authorized to invest in commercial paper, corporate bonds, andcorporate stocks.

Investments, exclusive of those held in the Pension Trust Fund, are carried at cost which approximatesfair market value. Pension Trust Fund investments are carried at fair market value. No investments arereported at amortized cost. The City has Investment Policies for both the Pension Plan and allGovernmental Funds. Its Debt Service Funds conform to its General Funds policies. The InvestmentPolicy for the governmental funds was established to minimize the following types of risks:

Credit Risk This is the risk that an issuer or other counterparty to an investment will not fulfill itsobligation. The City minimizes credit risk by:

1. Pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors withwhich the City does business

2. Diversifying the portfolio so that potential losses on individual securities will be minimized

Interest Rate Risk - Is the risk that changes in interest rates will adversely affect the fair marketvalue of an investment. Investments held for longer periods are subject to increased risk ofadverse interest rate changes. The City minimizes interest rate risk by:

1. Structuring the investment portfolio so that securities mature to meet cash requirementsfor ongoing operations, thereby avoiding the need to sell securities on the open marketprior to maturity

2. Investing operating funds primarily in shorter-term securities

Concentration of Credit Risk - Is the risk of loss attributed to the magnitude of the Citysinvestment in a single issuer. The City minimizes concentration of credit risk by diversification.

Custodial Credit Risk - Is the risk that, in the event of a bank failure, the Citys deposits may not

be returned or the City will not be able to recover collateral securities in the possession of anoutside party. As specified by RSMo 30.270, the Citys bank deposits are required by state law tobe secured by the deposit of certain securities with the City or a trustee institution. The value ofthe securities must be greater than the total of the Citys cash not insured by the Federal DepositInsurance Corporation.


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E. FUND EQUITY

Governmental funds report reservations of fund balance for amounts that are not available forappropriation or are legally or contractually restricted by the contributing party(ies) as to their use for aspecific purpose.

F. ENCUMBRANCES

Encumbrances represent commitments related to unperformed contracts for goods or services.Encumbrance accounting, under which purchase orders, contracts, and other commitments for theexpenditure of monies are recorded in order to reserve that portion of the applicable appropriation, isemployed as an extension of formal budgetary integration in the governmental fund types.Encumbrances outstanding at year-end are reported as reservations of fund balances since they do notconstitute expenditures or liabilities. All unexpended and unencumbered annual appropriations lapse atyear-end.

SUMMARY OF SIGNIFICANT BUDGETARY PROCEDURES

A. BUDGET COMPONENTS

The budget is intended to present a complete financial plan for the coming budget or fiscal year andincludes the following information:

1. A budget message describing the important features of the budget and major changes from thepreceding year;

2. Estimated revenues to be received from all sources for the budget year, with a comparativestatement of actual or estimated revenues for the preceding two years, itemized by year, fundand source;

3. Proposed expenditures for each department and division for the budget or fiscal year, togetherwith a comparative statement of actual or estimated expenditures for the preceding two years;

itemized by year, fund, activity and object of expenditure;

4. The amount required for payment of interest, principal and redemption charges, if any, on anydebt of the city;

5. A general budget summary. (RSMO 67.010)

B. BUDGET BASIS

Budgets are prepared on a basis consistent with Generally Accepted Accounting Principles, except thatencumbered amounts are treated as expenditures for budgetary purposes. Annual appropriated budgetsare prepared and adopted for all of the Citys governmental funds previously identified. They are notprepared for its proprietary, fiduciary, or government-wide funds. Nor are they prepared for its component

unit.

C. BUDGET PREPARATION PROCEDURES AND SCHEDULE

Before March 1st

of each year, all departments of the City submit requests for appropriations to the CityManager. After review of these requests, the proposed annual operating budget is prepared by fund,function and department.

Prior to May 1st, the budget proposed by staff is submitted to the City Council for its review. The City

Council holds at least one public hearing and may add to, subtract from, or change appropriations. Prior


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to June 30th

of each year, the Council adopts, by resolution, the revised or unrevised budget, for the fiscalyear beginning the following July 1

st.

The following summarizes the Citys budget schedule:

Fiscal Year 2011 - 2012 Budget Schedule

Distribute Budget Worksheets to Department Heads via email(Includes budget worksheets, variance justification, departmentalnarratives, departmental goals, and departmentalaccomplishments)

February 1, 2011

Deadline for submission of Budget Documents to Finance Director February 28, 2011

City Manager and Director of Finance meet with Department Headsto review submitted budget

March, 2011

Budget Adjustments completed and preliminary budget documentprepared

April 1-29, 2011

Preliminary Budget Draft delivered to City Council April 29, 2011

Work Session with City Council, City Manager, Finance Director,and Department Heads

May, 2011

Finalize all revenue and expenditure allocations Through June 10, 2011

Public Hearing June 14, 2011

Final Budget components reviewed and completed June 24, 2011

Council Consideration and Budget Adoption June 28, 2011

Implement Fiscal Year 2011 - 2012 Budget July 1, 2011

D. BUDGET AMENDMENT PROCESS

Legal budgetary control is at the departmental level. Any transfers of budgeted amounts from onedepartment to another requires approval of the City Council. Budgeted amounts are as originally adoptedor as amended by the City Council or City Manager, as appropriate. Supplemental appropriations aremade to cover large unanticipated items.

E. BALANCED BUDGET

The proposed budget and any revised budget must conform to the statutory requirement that the totalproposed expenditures from any fund shall not exceed the estimated revenues to be received, includingdebt issuances, transfers from other funds, and advances from other funds plus any unencumberedbalance or less any deficit estimated from the beginning of the budget year. (RSMO 67.010).

F. FISCAL YEAR

The Citys fiscal year begins each July 1st

and runs through the following June 30th.

Before the beginning of each fiscal year, the City Council must approve the budget and take suchadditional action as may be required to produce the revenues estimated in the budget. (RSMO 67.030)


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BONDED DEBT SCHEDULE

The City of Ferguson, Missouris long-term debt includes Tax Increment Refunding Bonds, Certificates ofParticipation and Variable Rate Capital Improvement Bonds. This overview describes each type of debtand provides a summary of the Citys indebtedness.

A. GENERAL OBLIGATION BONDS

General obligation bonds are issued to finance a variety of public projects and require voter approval.These bonds are backed by the full faith and credit of the City. Limitations for bonding capacity are set bystate statutes.

Under Article VI Sections 26(b) and 26(c) of the Missouri Constitution, the City, by vote of 4/7th

of thequalified electors thereof, may incur general obligation bonded indebtedness for City purposes in anamount not to exceed 10% of the assessed valuation of taxable tangible property within the City asascertained by the last completed assessment for State or County purposes. Under Section 26(d) of saidArticle VI, the City may incur general obligation indebtedness not exceeding in the aggregate anadditional 10 percent of the aforesaid assessed valuation for the purpose of acquiring right-of-way,constructing, extending, and improving the streets and avenues and acquiring rights-of-way, constructing,and improving sanitary or storm sewer systems, and under Section 26(e) of said Article VI, additionalgeneral obligation indebtedness may be incurred for purchasing or constructing waterworks, electric, or

other light plants to be owned exclusively by the City, provided that the general obligation indebtedness ofthe City shall not exceed 20% of the assessed valuation.

Currently, the City has no general obligation bonds outstanding. However, in April 2011, the Citys votersauthorized sale of up to $11,000,000 in general obligation bonds for the purpose of constructing areplacement of the Citys Fire House Number 1 and other building rehabilitation. Prior to this vote, theCity Council by resolution committed to limit bonds issued to $8,000,000. In Fall 2011, the Cityanticipates sale of these bonds with their first interest payment due March 1, 2012 and to levy an advaloremtax due on December 31, 2011.

Bonding capacity of the City as of August 31, 2010 the last date of property valuation, is as follows:

COMPUTATION OF LEGAL DEBT MARGIN

Total assessed value Real & personal property $ 205,207,000

Debt Limit 10% of real and personal property $ 20,520,700

Amount of indebtedness applicable to debt limit

Total bonded debt$ -

Less: Assets in debt service fund -Total Indebtedness applicable to debt limit -

Legal debt margin $ 20,520,700

B. CERTIFICATES OF PARTICIPATION

Certificates of Participation are used to finance a variety of public projects. The Citys Certificates ofParticipation are subject to annual appropriation and are not backed by the full faith and credit generalobligation pledge. Certificates of Participation debt is not included in the calculation of the legal debtlimitation described in Part A. of this section. It does not require a vote of the citizens.


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Certificates of Participation, issued in 2002, provided for improvements to the Splash at Wabash AquaticComplex. The Parks Fund is responsible for debt service on this issue.

SCHEDULE OF DEBT SERVICE REQUIREMENTS2002 CERTIFICATES OF PARTICIPATION

Certificates of ParticipationFor the Years Ending June 30,

Principal Interest Total2012 155,000 105,803 260,803

2013 160,000 99,974 259,9742014 170,000 93,574 263,5742015 175,000 86,674 261,6742016 180,000 79,462 259,4622017 200,000 71,500 271,5002018 200,000 62,250 262,2502019 205,000 52,125 257,1252020 220,000 41,500 261,5002021 230,000 30,250 260,2502022 240,000 18,500 258,5002023 250,000 6,250 256,250

$2,385,000 $747,862 $3,132,862

C. VARIABLE RATE CAPITAL IMPROVEMENT BONDS

The Citys Variable Rate Capital Improvement Bonds were used to acquire, construct, rehabilitate, equipand/or improve certain capital assets. The bonds and interest thereon are special, limited obligations ofthe City, payable solely from available revenues and subject to annual appropriation by the City Council.The bonds do not constitute a debt of the City and do not constitute indebtedness within the meaning ofany statutory or constitutional debt limitation or restriction.

Following is a schedule reflecting the first issuance of Line of Credit variable rate bonds and thecorresponding payment schedule. This schedule includes both bonds issued in September 2005 in theamount of $2,250,000 and those issued in September 2006 in the amount of $2,750,000:

SCHEDULE OF DEBT SERVICE REQUIREMENTS2005 & 2006 VARIABLE RATE CAPITAL IMPROVEMENT BONDS

Variable Rate Capital Improvement BondsFor the Years Ending June 30,

Principal Interest Total2012 350,000 147,721 497,7212013 370,000 132,926 502,9262014 380,000 117,939 497,9392015 395,000 102,344 497,3442016 410,000 86,387 496,3872017 430,000 69,328 499,3282018 445,000 51,809 496,809

2019 465,000 33,580 498,5802020 480,000 14,698 494,698

$3,725,000 $756,732 $4,481,732


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D. TAX INCREMENT REFUNDING REVENUE BONDS

On September 12, 1997 the City issued $8,385,000 in Tax Increment Revenue Bonds to financenecessary public improvements for the Crossings at Halls Ferry Redevelopment Project. The bonds wereissued pursuant to the Real Property Tax Increment Allocation Redevelopment Act, Section 99.800 of theRevised Statutes of Missouri. Interest and principal on the bonds were originally scheduled to be paidannually on April 1 beginning in the year 2000, with a final maturity date of April 1, 2018. However, onMarch 1, 2005, the City issued $7,370,000 in Tax Increment Revenue Bonds to refund bonds issued on

September 12, 1997. Beginning on October 1, 2005, interest on the bonds is scheduled to be paid semi-annually. Beginning April 1, 2006, principal on the bonds is scheduled to be paid annually. The bondsand the interest thereon are special, limited obligations of the City, payable solely from payments in lieu oftaxes attributable to the increase in assessed value of real property and from incremental increases ineconomic activity taxes in the redevelopment district. The bonds do not constitute a general obligation ofthe City and, therefore, constitute indebtedness within the meaning of any statutory or constitutional debtlimitation or restriction.

TAX INCREMENT REFUNDING REVENUE BONDS, SERIES 2005CROSSINGS AT HALLS FERRY PROJECT

For the years ending June 30, Principal Interest Total

2012 560,000 218,650 778,6502013 585,000 194,570 779,5702014 610,000 166,800 776,8002015 645,000 133,250 778,2502016 680,000 101,000 781,0002017 715,000 43,500 758,5002018 70,000 4,000 74,000

$3,865,000 $861,770 $4,726,770


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REVENUE NARRATIVE


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MAJOR SOURCES OF REVENUES FISCAL YEAR 2011 - 2012

PROPERTY BASED TAXES

Real Property Taxes, Personal Property Taxes and Railroad and Utility Taxes are all ad valoremtaxes.They are based on the assessed value of all property within the City of Ferguson, Missouri (the City).Property values are established by the St. Louis County Assessor. The City is permitted to levy each of

these taxes for both its General and its Parks Fund.

As its collection agent, St. Louis County pursues all collection matters on the City's behalf. All of thesetaxes are billed in November of each year and are due by December 31

st. Taxes are collected by the St.

Louis County Collector of Revenue and disbursed to the City throughout the year as a lump sum withoutdifferentiation as to fund. Accordingly, the City splits the receipts from each of these taxes between itsGeneral and its Parks Funds, based on the ratio of each funds total anticipated revenues. That allocationratio is re-evaluated in odd numbered calendar re-assessment years.

Beginning in calendar year 2009, as a result of S.B. 711, the property tax rate setting cycle is accelerated.Consequently, assessed values are distributed by St. Louis County early enough to allow for their use inestimating current calendar year tax levy rates in the Citys budget.

In calendar year 2009, re-assessment resulted in a slight decrease in residential real property values.This was offset by a slight increase in commercial real property values. The results of calendar year 2011reassessment are unknown. By state statute, property tax assessment rates are indexed for inflation.This is done by the state auditor whose office is responsible for making the spreadsheet calculatoravailable to the states political subdivisions. In 2010, the state auditor set that index rate at 1.10%. TheCity is limited to real property tax rates of $0.45 and $0.20 per $100 assessed value for its general andparks assessments, respectively.

REAL PROPERTY TAXES

Real Property Tax revenues are based on tax rates levied on residential, agricultural and commercialproperties which are assessed at 19%, 12% and 32% of market value, respectively. The Citys calendar2010 real property tax levies per $100 assessed value were

Type of PropertyFund NameResidential Agricultural Commercial

AllocationRatio

General $0.3770 $0.4270 $0.4240 70%Parks 0.1560 0.1690 0.1820 30%Total $0.5330 $0.5960 $0.6060 100%

For several years, real property tax revenues increased as a result of modest residential and commercialconstruction and inflation adjustment. However, they have plateaued and are anticipated to remain so inFY 2011 - 2012. The graph below combines real property taxes of the General and Parks Funds for eachthe 10 years ending June 30, 2012 and illustrate