Work Session Two

2011 City Budget ~ Manhattan ~ Kansas

2011 City Budget

Declining ending cash balances Minimal reserves Increasing property tax requirements from

some outside agencies Increasing property tax requirements for the

Bond & Interest Fund Future rate increases across all enterprise

funds

2011 budget challenges

A. Health Insurance (Information Requested)

Comparative data is not readily measureable given the differences that exist across each program.

Total premium cost of City’s self-insured program compares very favorably to that of other local and regional governmental entities.

Comparative data does not reflect the City’s aggressive, ongoing “wellness program” that is currently in place.

2011 City Budget

B. Delinquency Rates (Information Requested)

Property tax delinquency for the past five years has averaged 2%.

For two of the past three years, the City has not levied a delinquency rate in an effort to keep the property tax levy low.

Although the special assessment delinquency rate remains higher than in the past, a majority of the amount delinquent is collected within three years.

2011 City Budget

C. RCPD Revenue Analysis (Information Requested)

The City Finance Department does not have access to reserve status or other revenues collected by the Riley County Police Department.

Based on past history, the City applies some of the residual cash balance at the end of one fiscal year to help make up any shortfall in the following fiscal year.

Please note that the City transferred an additional $117,481 from the General Fund in 2008 to RCPD—the only year that a delinquency rate was not applied.2011 City Budget

D. Bonding Options (Information Requested)

Based on the City’s debt policy… City debt will be amortized for the shortest period

consistent with a fair allocation of costs to current and future beneficiaries or users.

The City normally shall issue bonds with an average life of 15 years or less for general obligation bonds and 20 years for revenue bonds and special assessment bonds.

To the extent possible, the City will design the repayment of its overall LTO issues so as to rapidly recapture its credit capacity for future use.

As one benchmark, the City shall strive to repay at least 20% of the principal amount of its general obligation bonds, within five years and at least 40% within ten years.

2011 City Budget

E. DMI Financing (Information Requested)

Two distinct benefit district projects: (1) Alleys and Mews at $678,141 and (2) Poyntz improvements at $1,656,897.

City-at-large would pay for 2/3 of the cost for both projects.

Based on a 20-year bond issue, the mill levy impact for the City would range from .183 mills to .322 mills.

2011 City Budget

F. Current/Future Debt (Information Requested)

Proposed 2011 mill levy increases by 3.696 mills.

Proposed mill levy rate continues to increase by about 3 mills through 2015.

Cash reserves for a debt fund are nominal at $1,000,000. Same reserves were budgeted at $2,521,847 in 1998.

Credit rating agencies continue to express concern over the City’s direct and overall debt burden which is expected to increase. This concern is somewhat mitigated by (1) reserve levels and (2) rapid rate of retiring debt.2011 City Budget

G. STAR Revenue (Information Requested)

Additional 1% state sales tax effective this July will have a favorable impact on the STAR bond issue.

Additional revenues of over $2.5 million are expected and could retire the entire STAR bond issue seven years earlier than expected.

2011 City Budget

2011 City Budget

2011 Proposed Property Tax LeviesProjected

Property Taxes for Outside Agencies Levies ChangeRCPD 27.025 1.463

Library 4.247 0.000Library EBF 0.932 0.000

Riley County Health Department 0.576 0.04532.781 1.509

Property Taxes for City ServicesGeneral Fund 2.721 0.000

Employee Benefit Fund 1.459 0.722Fire Equipment Reserve 0.116 0.000

General Improvement 0.000 0.000Park Development 0.000 0.000

KP&F 0.174 (0.173)Industrial Promotion 0.000 0.000

Bond & Interest Fund 5.791 3.69510.261 4.244

Possible 2011 Mill levy 43.041 Estimated increase over 2010 Mill Levy 5.752

2011 City Budget

Historical Property Tax Levies----- Property Taxes -----

Mill Taxes As a PercentYear Levy Levied of Valuation Per Capita

2010 37.289 16,102,722 3.73% $298

2009 34.268 14,734,675 3.43% $276

2008 31.683 13,110,873 3.17% $249

2007 33.089 12,157,634 3.31% $235

2006 36.235 11,648,970 3.62% $232

2005 40.832 12,053,013 4.08% $244

2004 43.540 11,799,297 4.35% $252

2003 44.388 10,725,792 4.44% $240

2011 City Budget

2011 Budget Summary

(Proposed) Percent2007 2008 2009 2010 2011 Change

General Fund $ 19,407,122 $ 20,801,075 $ 22,130,617 $ 23,122,213 $ 23,244,180 0.53%

Total of All Special Revenue Funds

30,497,451 36,172,813 41,053,860 41,542,422 42,057,139 1.24%

Total of All Enterprise Funds

19,437,073 20,030,586 20,254,822 21,008,905 22,175,500 5.55%

Bond & Interest Fund 10,642,557 12,106,658 11,955,567 13,484,910 17,724,023 31.44%

Total City Budget: $ 79,984,203 $ 89,111,132 $ 95,394,866 $ 99,158,450 $ 105,200,842 6.09%

ExpendituresProperty

Taxes Mills

Special Assessments $ 6,445,436 $ 322,272 0.746

Miscellaneous Expenses & Cash Reserves 1,106,662 1,106,662 2.563

Approved Capital Projects (Not Yet Bonded) 1,066,700 - 0.000

Approved CIP Started (Not Yet Bonded) 469,013 469,013 1.086

Downtown Redevelopment 287,535 94,314 0.218

Proposed CIP 136,123 113,990 0.264

Current Debt 5,215,837 394,674 0.914

$ 14,727,306 $ 2,500,925 5.791

Status of Bond & Interest Fund Debt

Current Bond & Interest mill levy = 2.096

2011 City Budget

Need to finalize decisions on… Citizens CIP requests, especially DMI Any other budgetary concerns

The following will be incorporated into future plans… Fire station expansion aTa funding for the future

2011 Budget Considerations

2011 City Budget

June 22nd Third Budget Work Session on the 2011 City Budget and

Presentations by Outside Agencies

Reminder…