[Page intentionally left blank]
Table of Contents
Table of Contents Section 1: Introduction .............................................................................................................5 History ................................................................................................................................... 6 Mayor and City Council ......................................................................................................... 9 Organization Chart ................................................................................................................ 11 Budget Calendar.................................................................................................................... 14 Section 2: Administrative Summary ..........................................................................................15 City Manager’s Budget Message........................................................................................... 16 Strategic Planning ................................................................................................................ 29 Section 3: Budget Overview......................................................................................................43 Fund Structure and Overview Numbers ............................................................................... 44 Budget Ordinance ................................................................................................................. 52 Financial Policies ................................................................................................................... 56 Section 4: Revenue Projections.................................................................................................71 Section 5: General Fund Overview ............................................................................................83 Section 6: General Fund Department Budgets ...........................................................................94 Administration ...................................................................................................................... 95 Municipal Court .................................................................................................................... 99 Development Center............................................................................................................. 102 Finance .................................................................................................................................. 105 Fire ........................................................................................................................................ 108 Law ........................................................................................................................................ 111 Planning and Neighborhood Services ................................................................................... 112 Police ..................................................................................................................................... 115 Public Works Engineering ..................................................................................................... 119 Public Works Operations ...................................................................................................... 122 Section 7: Special Revenue Funds .............................................................................................126 Parks and Recreation Funds.................................................................................................. 127 Other Special Revenue Funds ............................................................................................... 154 Section 8: Capital Projects Funds ..............................................................................................158 Section 9: Proprietary Funds.....................................................................................................177
City of Lee’s Summit Annual Budget FY15
Table of Contents Internal Service Funds........................................................................................................... 179 Enterprise Funds ................................................................................................................... 191 Section 10: Debt Service Funds .................................................................................................208 General Obligation Debt ....................................................................................................... 210 Park COP Debt ....................................................................................................................... 214 Appendix .................................................................................................................................215 Miscellaneous Statistics ........................................................................................................ 226
City of Lee’s Summit Annual Budget FY15
Introduction HISTORY Lee’s Summit is 150 years old and we’re celebrating this milestone all year long! The City’s Truly 150 Committee has been busy planning numerous Sesquicentennial communitywide events for everyone to enjoy. The Committee is comprised of nearly 30 dedicated civic, business and government representatives who started meeting in 2013 to organize special events honoring Lee’s Summit’s 150th birthday. We kicked off the celebratory festivities in January at the Mayor’s Character Breakfast followed by the Opening of the 1965 Time Capsule; Planting of 150 trees; A Fair to Remember event at Paradise Park in May; and Celebrate 150! Parade and Evening Extravaganza in August. The birthday-themed parade began at the Lee’s Summit High School, and provided a unique opportunity for individuals and groups to share their birthday wishes with the whole community. The Evening Extravaganza showcased a variety of local talent comprised of dancers, musicians, Trumpet Fanfare, and Matt Lewis (Elvis impersonator) and Drew Six! Be sure to mark your calendar for these upcoming Sesquicentennial events: • October 18 - Founders Day Celebration at City Hall: Dedication of our new time capsule. • December 11-12 – Holiday Magic & Memories at Lee’s Summit High School: Join us for the finale featuring local performances by the Lee’s Summit Symphony and other special guests. We thank everyone who has volunteered and supported our Sesquicentennial events to date and encourage people of all ages to join us as we plan for upcoming celebrations. We need your continued support to make these memorable events successful. Visit Truly150.com to join our newsletter, volunteer, donate or just to keep up to date on our upcoming events.
City of Lee’s Summit Annual Budget FY16
6|Page
Introduction Over a hundred and years ago, the small 11 block Town of Strother straddled the Missouri Pacific Railroad tracks. Today, that small town consists of 65.24 square miles and is known as the City of Lee's Summit. In the late 1800's, a man by the name of William B. Howard was drawn to this fertile, gently rolling prairie land with the dream of building a city. Today, nearly 93,000 residents have been enticed to this progressive, yet restful and family-oriented community atmosphere, with a unified dream to create a dynamic, vital city. From yesterday to today, the story of this once small town has been filled with the courage, dedication, and quiet determination of its citizens, making Lee's Summit an ideal city in which to live and work. On October 28, 1865, William B. Howard founded the Town of Strother by filing a plat containing the 11 blocks that currently encompass the downtown business district. At the time of incorporation, the population count stood at one hundred people. In November of 1868, the name was changed and the area incorporated as the "Town of Lee's Summit". Although the "Summit" portion of the name was obviously based on the fact the town's elevation is the highest point on the railroad between Kansas City and St. Louis, there are numerous opinions and theories on the origin of "Lee". According to one theory, the town was named after Civil War General Robert E. Lee, since incorporation took place shortly after the war and the majority of citizens migrated from the Southern states. However, another version suggests the town was named after a prominent early settler, Dr. Pleasant Lea. The discrepancy in the spelling of "Lea" has been attributed to railroad sign painters. Lee's Summit's most infamous citizen was Cole Younger, called "The Last of the Great Outlaws" by author Homer Croy. According to history, soldiers drove Younger to a life outside the law after his father's murder and subsequent robbery. While Union forces were enforcing Order #11, the command issued in 1862 ostensibly to burn homes belonging to those with Southern ties, Younger and his brothers were credited with saving some of the original homes within Lee's Summit, the most prominent of which belonged to William B. Howard. Order #11 helped to unify the transplanted southern population in Missouri and compelled Younger to join the Confederate guerrilla band known as Quantrill's Raiders. Cole Younger was arrested after an attempted bank robbery in Northfield, Minnesota. Following 25 years of imprisonment for his crimes, Cole Younger was paroled in 1901. Three years later, Younger returned to Lee's Summit where he lived as a model citizen until his death in 1916. His grave is located in the Lee's Summit Historic Cemetery. The Fire of 1885 demonstrated yet again the stamina personified by citizens in Lee's Summit. While most of the town's residents were attending Sunday morning church services, fire erupted in the downtown district, which consisted of dry, wooden buildings. A detailed account of the fire, as printed in the April 16, 1885, issue of The Lee's Summit Journal, stated the buildings burned "...like greased wood". Virtually the entire business district was destroyed and the loss aggregated at $87,000, with a total of 25 buildings consumed by the flames. However, the stalwart citizens took their losses in stride and promptly commenced to rebuild the town. Almost 30 years later, Mr. R. A. Long, a prominent Kansas City lumberman, began building his dream, which became a reality with the construction of Longview Farm. In 1912, Mr. Long purchased approximately 1,700 acres in the southwest portion of Lee's Summit. Mostly self-sufficient, the farm
City of Lee’s Summit Annual Budget FY16
7|Page
Introduction included five major barn groups and 42 buildings. When completed and functional, Longview Farm became internationally known for the horses and livestock contained within its white rail fences and was one of only three dozen such showplace farms. The history of Lee's Summit abounds with the tragedies and triumphs of courageous people who have never failed in their dream of creating a city that will continually progress and prosper. Most importantly, Lee's Summit is comprised of dedicated people who never lose touch with the basic values that make a community livable. We feel Lee's Summit has lived up to the dreams of its forefathers.
City of Lee’s Summit Annual Budget FY16
8|Page
Introduction City of Lee’s Summit Mayor and City Council
District 1
Rob Binney
Mayor Randy Rhoads
Diane Forte District 3
Derek Holland
District 2
Patricia Carlyle
Allan S. Gray II
District 4
Diane Seif
City of Lee’s Summit Annual Budget FY16
Bob Johnson
Dave Mosby
9|Page
Introduction The City of Lee’s Summit operates under a Mayor/City Council form of government. Mayor The Mayor is elected at-large for a four-year term and is recognized as the head of the city for all legal and ceremonial purposes and by the Governor of Missouri for all purposes of military law. The Mayor presides at City Council meetings, executes all ordinances, resolutions, proclamations, grants and executive orders. Any ordinance or resolution adopted by the City Council may be vetoed by the Mayor; however, the Mayor may only vote in the event of a tie. The Mayor presents a State of the City address at least once annually as to the affairs of the city and any recommendations of the Mayor. City Council The City Council consists of eight members. Two Councilmembers are elected by qualified voters from each of the four respective districts of the city, as provided by Section 9.4, City Council Districts. City Councilmembers shall be elected to serve staggered four-year terms. At each regular municipal election, Councilmembers shall be elected to fill the offices of those whose terms expire. Budget Committee A new City Council standing committee was established by Ordinance 7145 on February 16, 2012. This committee’s purpose is to review the City Manager’s proposed budget prior to its consideration by the City Council. The committee shall report on all bills, proposed ordinances, measures or questions referred to it pertaining to appropriations and the overall financial condition and future needs of the City. For the FY15 budget process, the committee consisted of the following members: Bob Johnson, Chair Diane Forte Allan Gray Derek Holland
City of Lee’s Summit Annual Budget FY16
10 | P a g e
Introduction
Organization Chart
City of Lee’s Summit Annual Budget FY16
11 | P a g e
Introduction AWARD FOR DISTINGUISHED BUDGET PREPARATION
The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Lee’s Summit, Missouri for its annual budget for the fiscal year beginning July 1, 2014. The award reflects the City’s commitment to meeting the highest principles of governmental budgeting. This signifies that Lee’s Summit’s budget rated proficient in serving as: a policy document, a financial plan, an operations guide, and a communications device. This award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.
City of Lee’s Summit Annual Budget FY16
12 | P a g e
Introduction
2015 – 2016 Budget Calendar
City of Lee’s Summit Annual Budget FY16
13 | P a g e
Introduction The annual budget calendar is developed by the City Manager and Chairman of the Budget Committee. The calendar includes the Budget Committee meeting schedule and important milestones to guide the budget process.
FY16 Budget Calendar Overview September 9, 2014 September 16, 2014 2:00pm October 21, 2014 2:00pm October 29, 2014 November 4, 2014 November 18, 2014 2:00pm November 2014 December 2, 2014 December 4, 2014 December 8, 2014 December 11, 2014 December 9, 2014 December 16, 2014 2:00 PM January 20, 2015 2:00 PM January 29, 2015 January 30, 2015 January 2015 February 6, 2015 February 6, 2015 February 6, 2015 February 17, 2015 2:00 PM February 20, 2015 February 25, 2015 February 2014 March 17, 2015 2:00 PM April 2014 April 2014 April 21, 2015 2:00 PM April 29, 2015 6:00 PM May 1, 2014 May 5, 2015 2:00 PM May 12, 2015 2:00 PM May 19, 2015 2:00 PM May 21, 2015 6:15 PM June 4, 2015
September 2014 MT meeting: Prep for FY16 Budget Process; Review Calendar; Set Action Items Regular F&B Cmt Meeting: Agenda: Review FY16 Budget Process (Calendar) October 2014 Regular F&B Cmt Meeting: Agenda: Review FY14 YE, Review FY15/16 GF Assumptions, Discussion of FY16 Reductions (2yr Plan) Budget Kickoff November 2014 MT Meeting: Update on VRMP and revised FY16 Outlook Regular F&B Cmt Meeting: Agenda: Updated FY16 Financial Outlook, Consideration of additional 1% merit Pre Budget meetings with Internal Service departments & HR December 2014 LBP Training: Navigation and Entry (2:00pm in the ITS Training Room) LBP Training: Navigation and Entry (9:00am in the ITS Training Room) LBP Training: Workforce and Reporting (1:30pm in the ITS Training Room) LBP Training: Workforce and Reporting (9:00am in the ITS Training Room) MT Meeting: Status update on FY16 reductions Regular F&B Cmt Meeting: Agenda: Update on VRMP; Personnel Services, Consideration of additional 1% merit January 2015 Regular F&B Cmt Meeting: Agenda: Update on FY16 Budget Reduction process Core Expenditure Numbers due All FY15 year end projections due Departments prepare FY16 budget requests February 2015 All expansion requests due for City Manager Review (HR, Fleet, Capital, ITS) City Manager Review of FY15 YE Projections Changes to the Schedule of Fees Due Regular F&B Cmt Meeting: Agenda: FY15 Projections, Continued: Reduction Analysis Department budget meetings with City Manager begin New Department / Peformance Excellence goals due Parks and Recreation budget to Park Board March 2015 Regular F&B Cmt Meeting: (St. Patrick's Day) Agenda: FY16 revenue projections, Changes to Schedule of Fees April 2015 Department budget meetings with City Manager conclude Annual Report to City Council (TBD) Regular F&B Cmt Meeting: Agenda: B&I Review; PSA Review and presentations Special F&B Cmt Meeting: Agenda: Presentation of City Manager's proposed FY16 Budget May 2015 Notice of public hearing due by noon Special F&B Cmt Meeting: Agenda: Reorganization Plans; Continued Discussion of FY16 Budget Special F&B Cmt Meeting: (If needed) Agenda: Continued review of City Manager's proposed budget Regular F&B Cmt Meeting: Agenda: Continued review of City Manager's proposed budget City Council Meeting: PUBLIC HEARING June 2015 City Council Meeting: Vote on Ordinance; PSAs
City of Lee’s Summit Annual Budget FY16
14 | P a g e
2: Administrative Summary
CITY MANAGER’S BUDGET MESSAGE Mayor and City Council, We have prepared for you an executive summary outlining the proposed budget for the upcoming fiscal year. As City Manager, I am appreciative of the team approach that is used to develop the budget. As a group of elected leaders, management team executives, and budget staff, we continually seek a way to provide outstanding services while maintaining a stable positive financial condition. Our work together has produced budgets that provide consistent, reliable municipal services and programs, and strategically guided our organization through the tumultuous economic depression that began in 2007. While our national and local economy continues to stabilize and recover we must find a new balance, one that supports the bold direction necessary for future prosperity and the need for careful planning to maximize our scarce financial resources. The fiscal year 2015-2016 (FY16) budget is our operations guide and financial plan designed to support the vision statement of the Lee’s Summit City Council.
City Council Vision Statement As the elected body of the City of Lee’s Summit, Missouri, we are collectively in pursuit of; A culturally rich community with diverse economic sectors to create a prosperous and dynamic community in perpetuity.
I.
Budget Request
The City has approximately 70 different funds, each categorized by purpose. We are proposing a comprehensive expenditure of $182.8M. This includes all proposed funding for daily operations, capital improvements, debt service, internal service, and enterprise operations. General Fund: This fund includes budgets for 10 departments that provide the mission critical services to our residents, such as police and fire protection, street maintenance, planning, codes, court, and general administration of the City. Special Revenue Funds: Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than
City of Lee’s Summit Annual Budget FY16
Total Budget
GENERAL FUND SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS ENTERPRISE FUNDS INTERNAL SERVICE FUNDS
$ $ $ $ $ $
FY15 Budget 60,445,927 20,438,767 11,935,213 30,765,038 47,974,663 11,749,853
FY16 Proposed $ 61,185,805 $ 21,672,789 $ 14,653,548 $ 24,292,376 $ 47,059,856 $ 14,013,080
TOTAL PROPOSED EXPENDITURES
$ 183,309,461
$ 182,877,454
FUND
16 | P a g e
2: Administrative Summary expendable trust or major capital project) requiring separate accounting because of legal or regulatory provisions or administrative action. This includes the Parks, grants, business and industry, tax increment financing (TIF), and transportation development district (TDD) funds. Debt Service Funds: The city utilizes two funds to record the receipt and disbursement of monies used to repay principal and interest charges on city issued debt. The General Obligation Debt Service Fund and Park COP Debt Service Fund are used to account for the annual retirement of bonds issued from 2003 through 2015. Capital Project Funds: The capital improvement funds include budgets that allocate expenses for infrastructure improvements. The City’s capital projects are funded by a variety of different sources. The City’s road and bridge maintenance projects and capital improvements are funded by a ½-cent sales tax. Other projects are funded by tax increment financing and through the sale of general obligation bonds.
FY16 Budget Request 8% 33% 25%
GENERAL FUND SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS ENTERPRISE FUNDS
12%
14%
INTERNAL SERVICE FUNDS
8%
Enterprise Funds: The City’s enterprise funds hold the budgets for departments that operate in business-type activities. These funds rely on revenues generated from sales of materials or services. The enterprise funds include budgets for our Water Utilities, Solid Waste, and Airport activities. Internal Service Funds: The City uses internal service funds, or Proprietary Funds, to account for its fleet of vehicles and equipment, information technology systems, central building services, and trust funds. The internal service departments allocate costs for the reimbursement of services to other departments. With these funds it is my intent to assign resources in support of the City Council’s goals, maintain the needed levels of service, and pursue strategic initiatives that would benefit the City.
II.
Review of Financial Condition – General Fund
In previous years we have discussed challenging financial conditions stemming from the economic depression that began in 2007. The economic downturn forced our organization to make difficult decisions to protect our long term financial condition. Over the last two fiscal years, the City’s general fund budget has been reduced approximately $2.0m by utilizing a variety of cost cutting strategies and analyzing our service delivery processes. During the FY15 budget process I introduced a two year plan that continued budget reduction efforts in response to the challenges brought on by the recession. Our goal was to return the General Operating Funds from a projected deficit of approximately $1.4m in FY2014-15 to a balanced budget in 2015-16. I am proud to say that due to our quick actions and positive revenue trends we accomplished this feat in 12 months and not 24 months. Key elements of the two year plan included reductions to personnel services expenses and revenue enhancements. These elements were necessary to make a structural adjustment where revenue growth matched or exceeded growth in general fund operating expenditures.
City of Lee’s Summit Annual Budget FY16
17 | P a g e
2: Administrative Summary General Fund: 5-Year Revenue/Expense Model FY16 Conservative Revenue Growth FY16 Revenue Assumptions: 1.5% sales tax growth from FY15 Proj; 2% decrease in Franchise Tax FY16 Expenditure Assumptions: 10% increase for Health Insurance, 2% merit increase FY12 Actual Revenues: Total operating revenues
56,172,029
FY13 Actual
FY14 Budget
FY14 Actual*
59,963,634
FY15 Budget
58,984,132
FY15 Projected
FY16 Request
FY17 Projected
FY18 Projected
FY19 Projected
FY20 Projected
60,381,952
61,187,360
62,585,101
64,264,306
65,536,209
66,973,473
57,943,246
57,931,188
Percent Change
-3.59%
3.15%
-0.02%
3.49%
1.74%
4.15%
2.04%
2.28%
2.68%
1.98%
2.19%
Salaries/Total Revenues
70.73%
70.82%
71.22%
69.26%
70.80%
68.56%
69.25%
70.64%
71.82%
73.46%
74.94%
*unaudited
Expenditures: Total operating expenditures Percent Change
Net Operating Rev - Exp
$
56,124,759
57,794,309
58,393,225
58,126,921
59,745,927
59,247,288
61,185,806
63,266,325
65,451,554
67,693,408
69,993,891
2.58%
2.97%
1.04%
0.58%
2.79%
-0.83%
5.26%
3.40%
3.45%
3.43%
3.40%
148,937 $
(462,037) $
(761,795) $
1,134,664 $
47,270 $
1,836,713 $
1,554 $
(681,224) $ (1,187,249) $ (2,157,199) $ (3,020,417)
One-Time: Revenues Expenditures
1,000,000
750,000
1,000,000
Retirement Maximization Prgm Use Tax
Rev - Exp (after one-time) $
1,000,000 0
(700,000)
735,408 $
1,908,856 $
537,963 $
2,836,713 $ (1,461,795) $
180,000
180,000
180,000
300,000
300,000
300,000
(477,229)
657,435 $
1,554 $
300,000 (381,224) $
(707,249) $ (1,677,199) $ (2,540,417)
Revenues (with one-time) $ 57,172,029 $ 59,703,165 $ 58,931,188 $ 60,963,634 $ 58,984,132 $ 60,381,952 $ 61,187,360 $ 62,885,101 $ 64,744,306 $ 66,016,209 $ 67,453,473 Exp (with one-time) $ 56,524,759 $ 57,794,309 $ 58,393,225 $ 58,126,921 $ 60,445,927 $ 59,724,517 $ 61,185,806 $ 63,566,325 $ 65,751,554 $ 67,993,408 $ 70,293,891
Recovery from the economic depression relied on reducing operating costs and growth of the revenue base. In FY15 we see positive indicators both nationally and locally of economic recovery as the City’s general fund revenues have exceeded budgeted amounts. Nationally, reports of increased gross domestic production (GDP), a reduced unemployment rate, lower gas prices, and a decreased retail vacancy rate are some of the positive factors that indicate a potential for increased revenue in the future. In Lee’s Summit, private investment from economic development projects, increased population, and increased assessed valuation are positive factors that indicate a potential for general fund revenue growth. While we have made difficult decisions to reduce operating costs and see signs of revenue growth and recovery, we must continue our practice of analyzing expenditures, looking for opportunities to add revenue, and forecasting realistic or conservative revenue and expenditure budgets. This practice has helped us gain financial sustainability and continue our incremental growth of our unallocated reserve balance.
III.
General Fund Overview
In FY16, general fund revenue estimates total $61,187,360 which will be used to fund a general fund operating budget of $61,185,805. General Fund Revenues: General fund services are funded by three major revenue sources; property taxes, sales taxes, and franchise taxes. These revenues account for approximately 77% of all general fund revenues in FY16. Overall, for FY16, revenues are expected to be $1.89m, or 3.2%, above last year’s amount. Key Revenue Variances: •
Property Tax: FY16 property tax estimates are based on reassessment values provided by Jackson County for business and residential property. This reassessment is provided every other
City of Lee’s Summit Annual Budget FY16
18 | P a g e
2: Administrative Summary year and provides actual property tax billing amounts for FY16. In FY16, the assessed value of residential property increased $51,978,469, or 4.09%, above FY14 assessed values. Additional growth is expected in FY16 following a projected increase of 300 new homes valued at an average price of $150k. In addition to increased assessed values, FY16 revenue estimates include a forecasted increase of payments in lieu of tax (PILOT) revenue. A PILOT payment is collected by the City and then disbursed to businesses that have been approved for economic development incentives. In FY16, PILOT revenues are expected to increase $508k. •
FY15 Change from FY15 Budget FY16 Sales Tax: Current year sales Account Budget Requested $ % Property Taxes 17,929,506 18,770,513 841,007 4.7% tax amounts show a Sales Taxes 13,478,056 14,690,702 1,212,646 9.0% significant increase above Franchise Taxes 13,978,424 13,640,847 -337,577 -2.4% Use Tax 3,189,933 3,397,624 207,691 6.5% budget and prior year Other Taxes 312,041 331,239 19,198 6.2% amounts. Through Q3 of Use Tax 1,328,566 1,532,144 203,578 15.3% Use Tax 1,568,441 1,655,673 87,232 5.6% FY15, sales tax wais $889k, Intergovernmental 755,470 979,021 223,551 29.6% or 7.6% above budget and Charges for Services 3,633,578 3,566,230 -67,348 -1.9% 79,405 0 -79,405 -100.0% $1.39m, or 12.4% above last Investment Earnings Other 1,664,410 1,557,065 -107,345 -6.4% year’s amount. This rate of Transfers In 1,066,302 1,066,302 0 0.0% Total 3.7% 58,984,132 61,187,360 2,203,228 growth is not expected in FY16. Sales tax estimates assume a 1.5% increase above the current year projection to account for an inflationary increase and population growth. In FY16 the new Todd George Marketplace development is scheduled to open which features 23 new store fronts that are expected to generate $61,898 in gross sales tax revenue. A similar increase of 1.5% is expected for economic activity taxes (EATs) which are a portion of gross sales tax revenue used to finance development projects that have been approved for incentives. The estimated FY16 net sales tax revenue for the general fund is $14.69m, an increase of $1.2m, or a 9% increase above the FY15 budget and an increase of $261k, or 1.8%, above current year projections.
•
Franchise Tax: Franchise tax revenue is collected from utilities that use the City’s rights of way to deliver their service which include electric, natural gas, telephone, and cable providers. Franchise tax revenues from electric and natural gas providers are largely dependent on weather and consumption of these FY16 Proposed utilities. Using the two and three year average, these franchise taxes Property taxes 2%2% Sales tax are estimated to remain relatively 6% Franchise tax flat in FY16. Telephone franchise 3% 2% 31% Motor vehicle taxes tax revenue is estimated to Other taxes 6% decrease $364k, or 10%, following Fines and forfeitures recent trends and consumer Licenses and permits choices to utilize mobile Intergovernmental connections. In total, franchise tax 22% Charges for services revenue is expected to decrease Investment earnings 24% $337k, or 2.5%, from FY15 budget Other amounts.
•
Motor Vehicle Taxes: The general fund receives 3 major revenue categories of motor vehicle taxes; fuel tax, sales tax, and license and transfer tax. In FY15 it was anticipated that less revenue would be received while the economy continued to recover. However, current year projections estimate an increase of $160k, or 5%, in total for all 3 categories. In FY16, revenue
City of Lee’s Summit Annual Budget FY16
19 | P a g e
2: Administrative Summary estimates were calculated using the two and three year average while factoring for elasticity to control for a potential spike that has possibly occurred in the current year. Total revenue from motor vehicle taxes are expected to be $48k, or 1.4%, above current year projections in FY16. General Fund Expenditures: The challenge during every budget planning process is to efficiently maximize the scarce resources provided by tax payers and residents of the community. In FY16, I have proposed a total general fund expenditure budget of $61,185,805 that will be used to provide services to the citizens of Lee’s Summit. During the previous two fiscal years, our organization has had to adjust how services are delivered to residents in an effort to reduce expenditures. Our Management Team and budget staff has continued this thinking as the FY16 budget was developed. Key Expense Variances: •
Personnel Services: A variety of pay and compensation changes have occurred that resulted in a projected reduction of $87k, or.2%, in total personnel costs. A one-time retirement maximization program to incentivize early retirement will end resulting in a $700k reduction in personnel costs for FY16. This reduction is offset by increased costs for health insurance. The FY16 budget assumes a $631k, or 10%, increase for health insurance costs. The City’s retirement program, managed by the State of Missouri, has experienced a positive return on investment which has decreased the City of Lee’s Summit’s employer contribution by $542k, or 13%. In addition to these changes I have proposed a 2% performance based merit adjustment with the purpose of ensuring that our pay and compensation is competitive to attract and retain our best employees. Pay and compensation is budgeted for partial funding to account for anticipated vacancy savings that occurs as a result of employee turnover and separation.
•
Account $ % Budget Requested Other Supplies, Services, and Personal Services 42,460,090 42,372,284 -87,806 -0.2% Supplies for Resale 137,980 141,000 3,020 2.2% Charges: This category of Other Supplies/Services 7,923,079 8,237,357 314,278 4.0% expenses account for the non Repairs & Maintenance 1,301,073 1,383,654 82,581 6.3% Utilities 1,723,693 1,707,842 -15,851 -0.9% personnel costs used in daily Fuel & Lubricants 692,853 696,139 3,286 0.5% operations and service delivery. Miscellaneous 129,680 148,390 18,710 14.4% Capital Outlay 0 0 0 n/a Included in this category are Interdepartmental Charges 5,413,811 5,479,125 65,314 1.2% expenses like insurance costs, Transfers 663,668 1,020,014 356,346 53.7% Total 60,445,927 61,185,805 739,878 1.2% printing, postage, professional fees, employee training, prisoner expenses, election costs, bad debt expense, PILOT disbursements, and collection fees. The significant variances for this category include a $194k cost for PILOT payments, increased professional fees expense of $318k, a decrease in insurance costs of $61k, and a decrease in prisoner expenses of $27k.
•
Transfers Out: A transfer from the general fund is budgeted to fund a variety of projects and onetime expenses like information technology projects and equipment replacement program payments that will be accounted separately in another fund. In FY16 a significant one-time expense
FY15
FY16
FY16 Proposed
3%
1%
9%
Personal services
2%
Supplies for resale Other supplies, services and charges Repairs and maintenance
2%
Utilities
14%
Fuel and lubricants Miscellaneous 69%
City of Lee’s Summit Annual Budget FY16
Change from FY15 Budget
Interest Capital outlay
20 | P a g e
Interdepartment charges
2: Administrative Summary of $293,904 is planned to replace 8 LIFEPAKs, an emergency rescue device, equipped on the City’s ambulance and fire response vehicles. The LIFEPAK is an advanced monitoring device which gives the paramedic the ability to monitor critical values of the patient such as end Oxygen, Carbon Dioxide, and presence of Carbon Monoxide and helps the paramedic detect hard-to-diagnose conditions and improve patient care delivery with noninvasive monitoring. The LIFEPAK is utilized by LSFD paramedics to perform advanced cardiac monitoring in treating cardiac patients. The LIFEPAK continuously monitors all 12 leads in the background and alerts the paramedic of EKG changes that may occur while transporting the patient, after acquiring the initial 12-lead EKG. The LIFEPAK monitor/defibrillator functions as a defibrillator which is needed to treat lethal arrhythmias by delivering electrical energy to reset the electrical system of the heart, or serve as a pacemaker if the electrical system of the heart stops working. Included in the proposed general fund budget is funding for the following key initiatives: Key Initiatives: A high performing successful organization will seek opportunities to continuously improve operations, be forward thinking by planning for the future, and align resources to efficiently deliver services. It is necessary for our organization to make these steps and implement new business practices to meet future realties. In the FY16 budget I have proposed the following key initiatives that will strategically plan and align our organization to meet the needs of our community. To accompany the reorganization plans described below, I have attached a proposed organizational chart to this message. (Please see last page) 1.
Reorganization of personnel resources
The most important resource of any organization is an employee. Professional staff members bring to the organization ideas, expertise, experience, and capacity to serve and deliver services. As City Manager, it is my responsibility to ensure that the City’s staff resources are aligned in support of our organization’s mission and goals. In the FY16 budget, I have proposed a reorganization plan to ensure the needs of the City Council and residents is met through the reassignment of responsibilities and the creation and reclassification of existing positions. As part of this plan, an Assistant City Manager will lead and direct our economic development and communications initiatives. A second Assistant City Manager will oversee our operating departments such as Public Works and Water Utilities. Responsibility for general administrative services including human resources and budget development will be assigned to a new Director of Administration position. This reclassification of existing positions will eliminate the Assistant City Manager of Internal Service, Assistant City Manager of Development and Human Resources, and the Assistant to the City Manager positions. These changes also reflect the removal of the Deputy City Manager position in 2015-16. These changes are proposed in an effort to control personnel costs while ensuring we have the capacity to carry out our core functions. 2.
Enhancement of public communication
It is important to make informed decisions based on performance measure outcomes and through customer feedback. The recent Citizen Satisfaction Survey highlighted opportunities to enhance existing services in an effort to improve citizen satisfaction. One opportunity presented in the survey indicated a need to enhance public communication efforts. From 2008 to 2013 our residents’
City of Lee’s Summit Annual Budget FY16
21 | P a g e
2: Administrative Summary satisfaction of the City’s communications practices decreased 5% from the previous survey conducted in 2007. This decrease is not unexpected considering the changing preferences for how we choose to receive information and what information is desired. The FY16 budget includes funding for a new approach to public communication for the City. As a result of the communication audit we plan to reassign our communication resources by redesigning the duties and responsibilities of existing positions to create a communication team that will include a Communication Director, Public Engagement Specialist, and Communications Officer position whose assignment will be to build upon our traditional communication methods and tools like the City’s website and newsletters by increasing the City’s social media presence and utilization of proactive communication and citizen engagement tools. These changes will eliminate the Public Communications Coordinator and Economic Development Communications Manager positions. 3.
Economic Development
New investment in our community from the business sector creates opportunities to enhance our economic base and quality of life for the residents of our community. It is important for our community to pursue these opportunities strategically and efficiently to maximize the use of our land and financial resources. In FY16 I have proposed to streamline the development process for those making an investment in our community by combining land use planning and development engineering and inspections functions under the supervision of the Development Center department. In addition to this customer service improvement, we will initiate a proactive approach to identifying market opportunities for development within the City’s nine targeted areas. The FY16 budget also includes continued funding of $200k for the pursuit of economic development opportunities. 4.
Review of processes and procedures
To evolve and improve as an organization it is important that we review our operating processes and procedures to find efficiencies and best practices so that we adapt to customer needs and expectations. Each year I am required by ordinance to submit a recommendation for a performance review or management audit of City operations. Funding has been included in the FY16 Budget to review and audit our document management system and processes. A challenge for local government is to maintain transparency and openness of documentation and data. New business practices and technology have drastically increased the intake of communication and our output of information used in the decision making process. It is important that we maintain these records in an orderly and systematic manner. In addition, I have also proposed a review of administrative costs that are recovered from our other funds and business units and a network security audit to assess the safety and vulnerability of the City’s network technology infrastructure.
IV.
Enterprise & Internal Service Funds
Enterprise and Internal service funds receive revenues from user fees and charges directly from internal and external customers. These funds are not directly supported by tax revenue, but by charges to City departments and users. Included in these funds are the Water Utilities, Airport, Harris Park, Resource Recovery Park (Enterprise Funds) and the Fleet Management, Building Services, and Information Technology Funds (Internal Service Funds).
City of Lee’s Summit Annual Budget FY16
22 | P a g e
2: Administrative Summary •
Water Utilities: The Water Utilities Department is responsible for providing clean, safe drinking water to the City with the exception of two areas served by other water districts. The Department purchases treated water from Independence and Kansas City to serve over 35,000 residential, commercial and irrigation accounts. Similarly, the Department operates and maintains facilities to collect wastewater from its customers so that it is conveyed to Little Blue Valley Sewer District for treatment. The Department provides sanitary sewer service to approximately 32,500 accounts. Key Initiatives: Enhance the City’s growth opportunities through the acquisition of additional water supplies from Kansas City and other jurisdictions. Utilize economic development zones as well as other actors to prioritize water and sewer main rehabilitation projects for inclusion in the Capital Improvement Plan. Continue increased level of maintenance for water and sewer repairs.
•
Airport: The Aviation Division provides general management and administration of resources to operate, maintain, market, and promote the airport which operates two runways and eight taxiways totaling over 166,044 square yards of pavement, 22 buildings.
Enterprise Funds FY15 Budget Water/Sewer Fund 39,000,851 Airport Fund 4,732,366 Solid Waste Management 3,038,106 Harris Park Community Ctr 1,203,339 Total 47,974,663
FY16 Proposed 37,464,516 4,934,852 3,083,688 1,576,799 47,059,856
Key Initiatives: Manage and coordinate the construction project for earthwork in preparation to extend runway (18-36); this is the 1st phase of construction of a 5,500 foot long concrete-paved runway with an estimated completion date in 2019, pending federal funding. Continue marketing efforts to attract new tenants and retain current tenants, and perform a customer satisfaction survey. In advance of completion of runway improvements, marketing will increase to attract new customers who cannot currently use the airport due to its shorter runway lengths. •
Resource Recovery Park: The Solid Waste Division provides area residents and businesses with access to responsible choices for the disposal of solid waste. The City’s solid waste management plan includes operation of a municipal landfill, two drop-off recycling centers, yard waste processing facility, electronics and carpet recycling, household hazardous waste facility, appliance and tire recycling, pavement recycling operation and asphalt shingle recycling. Key Initiatives: Ensure compliance of all local, state, and federal regulations pertaining to landfill operations. Continue pad reconstruction for relocation of household hazardous waste and recycling drop off locations. Continue development of recycling programs by finding efficiencies for electronics, mattress, and carpet recycling. Continue planning for the closure of the landfill. The landfill is anticipated to reach its permitted capacity in late 2017.
City of Lee’s Summit Annual Budget FY16
23 | P a g e
2: Administrative Summary •
Information Technology Services: Office of Information Technology provides central management of information technology resources and initiatives within the entire organization. Key Initiatives: Upgrade the City’s email system. Replace the fire dispatch assistance system. Install upgrade for Granicus document sharing system. Implement an online employment application system.
•
Internal Service Funds FY15 Budget Central Building Services 1,274,808 Fleet Operations 5,379,697 ITS Services 3,934,140 Short Term Disability Fnd 32,954 Unemployment Trust Fund 33,931 Claims & Damages Reserve Fund 150,000 Work Comp Self Insurance 906,418 Total 11,711,948
FY16 Proposed 1,599,552 6,228,659 4,314,721 33,533 32,262 875,000 929,352 14,013,080
Fleet Management: The Central Vehicle Maintenance department provides oversight and management of the City’s motor vehicle and equipment fleet, including administration of the Vehicle and Equipment Replacement Program (VERP), motor pool, maintenance and repair services, acquisition and disposal of the city’s fleet units. Key Initiatives: Continue transition to a new fuel management system. Coordinate the replacement of the compact pickup truck that is no longer manufactured. Systematically implement wing plows and advanced truck brine systems into the Fleet for snow removal.
•
Central Building Services: Provides oversight and management of City’s facilities including administration of the Building and Equipment Replacement Program, Project Management, Facility Maintenance Services and Custodial Services Programs; as well as maintenance and repair services for excess properties and leased facilities. Key Initiatives: Assist Water Utilities management staff by providing oversight during the construction phase of the new Operations Facility. Assist Public Works Operations Department by providing construction oversight during the new conveyor and brine system installation. Assist Solid Waste and Public Works Operations Departments during relocation and extension of KCP&L three phase electrical service. Complete pavement, roofing, and HVAC repairs or replacements at Fire Stations, Police HQ, City Hall and Maintenance Facility utilizing BERP program funding.
V.
Capital Improvement Plan
The 2016-2020 Capital Improvement Plan (CIP) has been divided into eight major categories, plus the Public Works and Water Utility Programs. The total estimated cost of all projects included in the fiveyear plan is $284,700,000.
City of Lee’s Summit Annual Budget FY16
24 | P a g e
2: Administrative Summary All funding sources that may be used for various capital improvements are reviewed each year. Much of the work to develop the CIP focuses on the balancing of available resources with the identified capital needs. Consideration must be given to factors such as annual revenue projections from various sources, restrictions on the uses of certain funds, legal limitations on debt capacity, and City policies relative to project funding. For budgeting purposes, the first year’s funding is included in the annual budget with subsequent years funding added to each future annual budget respectively. In FY16, major CIP projects receiving funding Capital Project Funds include: FY15 • Overlay and Slurry Seal maintenance Budget Water & Sewer Construction 14,269,038 program: $3m Bridges, Streets, Signals 12,020,000 • Annual Curb and Gutter Replacement Facilities 2,634,000 program: $1m Capital Equipment Replacement 1,042,000 • Construct Pavement for Runway 18-36: Airport 425,000 $1.6m Parks Construction 375,000 • Blackwell Road Interchange with US50: Total 30,765,038 $7.4m • Sanitary Sewer Main Replacement program: $1m • Water Main Replacement program: $1.9m
VI.
FY16 Proposed 5,957,376 12,339,000 0 678,000 3,043,000 2,225,000 24,242,376
Workforce & Expansion Requests
Each year during the budget process departments may identify capital equipment, job positions, or onetime expenditures that could be funded to enhance services or improve processes. These expansion requests are reviewed to ensure that they support the goals and objectives of the organization and can be financially supported. The following expansion requests have been approved for funding consideration in FY16: • Purchase of a skid steer tractor, truck, trailer (Water Utilities): $112k • Update of Cultural Arts Master Plan (General Fund): $15k • Replacement and Update of Audio/Visual Equipment (General Fund): $6k Additionally, as part of the reorganization plan, I have proposed to create and reclassify the following positions.
City of Lee’s Summit Annual Budget FY16
25 | P a g e
2: Administrative Summary FY16 Personnel Changes Reclassified Positions: Current Position Title: New Position Title: Assistant to the City Manager Management Analyst Assistant City Manager - Internal Services Assistant City Manager - Operations Assistant City Manager - Development Assistant City Manager - Dev & Comm Economic Development Communication Officer City Communications Officer Public Communications Coordinator Communications Director Office Manager/Executive Assistant Executive Assistant - City Manager Secretary to Mayor and City Council Executive Assistant - Mayor and City Council Manager of Building Inspections Field Services Manager Building Inspector Field Building Inspector Public Works Inspector Field Engineering Inspector Building Inspector Senior Field Building Inspector Senior Staff Engineer Engineering Technician Field Supervisor Street Operations Supervisor (4 positions) Manager of Streets Public Works Operations Manager Operations Superintendent Assistant Director of Public Works Operations Assistant City Attorney II Chief of Litigation Assistant City Attorney/Risk Mgr Chief Counsel of Management & Operations Deputy City Attorney Staff Attorney Media Service Supervisor Media Service Supervisor Jr. Systems Administrator Technical Services Specialist FY16 New or Additional FTE's: Public Engagement Specialist Director of Administration Assistant Development Center Director Permit Technician (Water Utilities) Water Utilities Management Analyst FY16 Eliminated Positions: Deputy City Manager Organizational Development Director Supervisory Engineer Total Net Increase/(Decrease) Total Net Increase/(Decrease) General Fund * Includes Salary and Benefit costs
*Net Impact: $ (12,334) $ $ $ $ 10,202 $ (8,759) $ 2,692 $ $ $ $ $ (39,000) $ 21,563 $ 7,112 $ 22,123 $ 6,522 $ 6,105 $ (24,976) $ 10,841 $ (4,661) $ $ $ $ $
79,086 122,033 107,185 71,353 63,691
$ (163,840) $ (133,535) $ (112,120) $ 31,283 $ (27,747)
Workforce, or employee counts, is described as a ratio of full time equivalents (FTE) where one full time employee is estimated to work 2,080 hours annually or 2,912 hours for certain fire department personnel. In the FY16 budget the workforce includes 674 full time positions and 475 part time positions of which 515 full time positions and 24 part time positions are included in the General Fund. Fund General Fund Parks & Recreation Water Utilities Airport Solid Waste CBS Fleet ITS Total
Full Time Equivalents (FTE) FY14 FY15 FY16 531.24 528.74 526.11 116.18 113.95 111.52 59.98 59.5 60.5 6.3 6.22 6.26 14.8 14.8 14.8 8.75 8.62 10.62 9 9.12 9.12 26.23 25.89 24.71 772.48 766.84 763.64
City of Lee’s Summit Annual Budget FY16
Change from FY15 $ % -2.63 -0.5% -2.43 -2.1% 1 1.7% 0.04 0.6% 0 0.0% 2 23.2% 0 0.0% -1.18 -4.6% -3.2 -0.4%
26 | P a g e
2: Administrative Summary
VII.
Summary
A strength shared by our elected officials, community, and City staff is an ability to plan and adjust our thinking so that we can position ourselves for future success. In FY16 our organization will change in an effort to adapt to new priorities, new directions, and new expectations. Change is often difficult but always necessary to continue the delivery of high quality municipal services. In the FY16 annual budget, these plans have been carefully developed to make the best use of our financial resources. I am appreciative of our elected officials, management team, and city staff’s dedication to continuous improvement while protecting the City’s financial condition and resources. Sincerely,
Stephen Arbo City Manager
City of Lee’s Summit Annual Budget FY16
27 | P a g e
2: Administrative Summary
Guiding Documents The City of Lee’s Summit actively participates in strategic planning to improve organizational capabilities by embracing a cycle of continuous improvement. These plans help organize resources to ensure optimal results are achieved. The City has three guiding documents which inform the organization’s decision making process. Priorities are formed when these documents share similar objectives. As shown in the diagram below, the City will focus on the priorities that overlap within the guiding documents.
LS360
Council Goals FY15 Priorities
Business Plan
Council Goals: The Council held a retreat to establish goals and objectives for the next year. The City Council will be updated on the progress made semi-annually and reconvene each year to reaffirm future priorities. LS360: The City of Lee’s Summit and the National League of Cities organized a community wide strategic planning process for residents to engage in visioning and planning for the Lee’s Summit community. Based on their input, goal and objectives were developed that were merged with the departmental goals and objectives. Business Plan: The City of Lee’s Summit is currently developing a 5 year internal business plan utilizing the national Baldridge program. A systematic and repeatable process was used to set the strategic direction for internal operations as well as the tactical plans to be implemented each year to ensure consistent forward progress in organizational performance.
City of Lee’s Summit Annual Budget FY16
28 | P a g e
2: Administrative Summary
Introduction The City of Lee’s Summit has embarked on a new path to redesign and remake our local government into a high performing organization. High performing organizations are confident of their reason for existing and what they are attempting to accomplish. This includes utilizing work processes to systematically pursue ever-higher levels of overall organizational and individual performance, leading to improved service for customers and other stakeholders. Because of the City’s commitment to continuous improvement, we instituted a program in 2010 known as Performance Excellence to help us do just that. This entails the ongoing improvement of services, programs, and processes by small increments or even major breakthroughs, such as innovation and re-engineering to better the performance of our organization as a whole. As we shift towards our goal to become a high performing organization we must abandon old and out of date models that silo traditional city provided services into separate departmental units. The old approach documented in previous budgets identified over 145 goals developed by the departments. With so many goals that were often disjointed it became clear that our organization lacked a singular strategic set of goals that identified opportunities for advancement and continuous improvement. Our new model of decision making and goal setting is captured in the City’s Business Plan. For example, one of our goals is to maintain effective delivery of services and ensure they meet customer expectations. The way to add value and improve customer service is to measure the results of applicable processes as evidence of effectiveness and efficiency. If a department finds that there is a problem with customer service or hand-offs to another department in providing the service, they can utilize the Plan, Do, Check, Act process to evaluate where improvements can be made following these steps (Shewhart cycle): -
Plan-define the process that requires improvement based upon customer requirements and planned work. Do-Execute the plan. Collect required data. Check-analyze data. Did the plan work? Did results meet customer expectations? Act-if so, standardize and document system. If not, take action to correct.
City of Lee’s Summit Annual Budget FY16
29 | P a g e
2: Administrative Summary The City of Lee’s Summit Business Plan Our Business Plan, adopted by City Council resolution on October 16, 2014, supports the community goals and guides our work as an organization to achieving even higher levels of organizational performance. The City Manager and 11 department directors form the senior leadership (SL) team and guide day-to-day operations toward deploying the city’s Business Plan. . The Business Plan documents the goals and objectives of our organizational units. This is our operations guide as it coordinates all of our organizational initiatives through the development and implementation of associated action plans and performance measurement tracking. Mission / Vision / Values In 2014, selected employees of the City of Lee’s Summit embarked upon a journey to define the organizational mission and Core Values. The City Manager and Organizational Development Director facilitated an employee team to define the City’s purpose and to craft the mission statement. The Management Team established the organizational Core Values; a second employee team developed an educational program to introduce them to the workforce and to help make them relevant to every workforce member in every department. These Core Values explain how our workforce is expected to operate and behave; they reflect and reinforce the desired culture. They also support and guide the decision making of every workforce member, helping the City to accomplish its mission and attain the vision in an appropriate manner. When Core Values are wholly integrated, they become a measurement for employee and organizational success. The City Council established the vision to articulate where the organization is headed and how they desire for it to be perceived in the future.
City of Lee’s Summit Annual Budget FY16
30 | P a g e
2: Administrative Summary
Goal Areas and Objectives In early 2010, twelve employees were selected to conduct an internal assessment of our organization, utilizing the Malcolm Baldridge performance excellence leadership model criteria. This involved focus groups with external stakeholders and employee interviews to collect valuable feedback regarding organizational strengths as well as opportunities for improvement. Further, the City’s Management Team convened a long term planning process in May, 2010, utilizing a SWOT analysis to identify
City of Lee’s Summit Annual Budget FY16
31 | P a g e
2: Administrative Summary potential threats to organizational sustainability. All information was instrumental in the development of the Business Plan’s goals for the duration of the plan, and objectives which remain in place for the 2013-2018 five year timeframe. Employee teams were formed to develop strategies to address improvement opportunities, led by organizational department directors. Those strategies were converted into action plans to align and focus the work of the organization at all levels; many of these action plans have been implemented as a result of this process over the last two years. The best organizations in every sector have demonstrated that all parts of the system must be effectively integrated to optimize performance. Consequently, five high level organizational goal areas were identified along with corresponding objectives: Goal One: Customer Focus Objectives: • • •
Customer Focus Customer Focus
Goal
Ensure customer engagement Maximize customer satisfaction through proactive and effective relationship building Foster customer self-sufficiency with a focus on technology Objectives
Strategy
Ensure Customer Engagement
Outreach of public engagement activities
Maximize customer satisfaction
Customer Satisfaction Plan
Strategy Measure
Measure Definition
Strategy Status Description
Outreach of public PPT employee training Satisfaction with quality engagement developed-need pilot of programs activities program
# action plans implemented
# action plans implemented postsurvey
Conduct citizen survey followup-dept action plans
Goal Two: Delivery of Services Objectives: • • • •
Utilize technology to facilitate optimum delivery of services Ensure a systems-based process to organizational management and planning Ensure City infrastructure supports and facilitates the delivery of service to customers Ensure the delivery of the right services at the right time to customers
City of Lee’s Summit Annual Budget FY16
32 | P a g e
2: Administrative Summary Strategy
Objectives
Delivery of Services
Delivery of Services
Goal
Ensure City infrastructure supports and facilitates the delivery of service to customers
PDCA process
Strategy Measure
Measure Definition
# depts/divisions utilizing PDCA for process improvement
# depts/divisions utilizing PDCA for process improvement
Effectiveness of plan and ease of use
Snap shot surveySatisfaction with plan
Ensure delivery of the right services at the Systematic life cycle approach right time to Life cycle approach customers.
# applicable departments who developed life cycle approach using strategic planning process
Strategy Status Description
Need to capture # of depts utilizing process
Testing strategic planning guide with Admin department
Goal Three: Workforce Focus Objectives: • • •
Ensure employee satisfaction and engagement Proactively manage workforce capacity and capability Foster employee technological self-sufficiency
City of Lee’s Summit Annual Budget FY16
33 | P a g e
2: Administrative Summary Objectives
Workforce Focus
Workforce Focus Workforce Focus Workforce Focus
Workforce Focus
Goal
Strategy
Employee engagement
Employee productivity
Employee engagement
HR Analytics
Ensure appropriate workforce capability
Ethics policy
Ensure appropriate workforce capability Ensure organizational workforce capacity consistent with organizational needs
Succession Planning
Strategy Measure
% employee turnover Average # sick hours used
Measure Definition
Strategy Status Description
% employee turnover
Waiting on turnover, Average # of sick hours work comp claim data used every six months from HR WC claims per 100 Work comp claims employees
# of employees trained
% of total
% of Departments Using Succession Planning
% of Departments Using Succession Planning
MT performance evaluation designed to include this strategyreviewing previous dept director plans
Improve collaboration and Plan Completed Plan Completed and City Mgr to meet alignment between staff and and alignment with alignment with Council quarterly with district Council Council Direction direction council members
Goal Four: Communication Objectives: • •
Maximize employee effectiveness through internal communication Ensure effective stakeholder and citizen satisfaction through external communication
City of Lee’s Summit Annual Budget FY16
34 | P a g e
2: Administrative Summary Goal
Objectives
Strategy
Strategy Measure
Communication
Clarity Content Employee communication
Employee communication Frequency
Communication
Communication
Timeliness
Employee effectiveness
External Communication
Internal communication
External communication
Measure Definition
Satisfaction with clarity of message content Increase in satisfaction with communication content Satisfaction with frequency of employee communication Satisfaction with timeliness of internal communication
Satisfaction with Satisfaction with Methods of internal methods of internal communication communication
Strategy Status Description
Safety Fair and dept monitors are being considered as additional options for communication opportunities
Intranet finalized June 30, 2014, weekly emails developed and delivered, supervisory training completed Reviewing communication auditways to get ongoing feedback from stakeholders-LS Engage?
Goal Five: Fiscal Accountability Objectives: • •
Ensure financial resources are available to meet strategic and daily operational needs effectively and efficiently Effectively communicate financial tools and results to stakeholders
City of Lee’s Summit Annual Budget FY16
35 | P a g e
2: Administrative Summary
Fiscal Accountability
Fiscal Accountability Fiscal Accountability Fiscal Accountability
Goal
Strategy Measure
Measure Definition
Increase in customer satisfaction
Increase in customer satisfaction
Objectives
Strategy
Fiscal Accountability
Communication 2014-2015
Fiscal Accountability
effectiveness of Economic development plan plan as evaluated by stakeholders
Fiscal Accountability
Stakeholder education
Strong fiscal policies
# policies completed and implemented % of total policies in compliance with GFOA
Quality of Identification of economic communication development tools 2014-2015 plan
Strategy Status Description
Develop an approach to standardized stakeholder messaging
Policy developed and satisfaction with plan as communicated. Areas evaluated by for development stakeholders identified. Number of policies completed and implemented policies compliant with GFOA
Quality of communication plan
3 of 5 policies waiting for adoption
Schedule of incentive projects done and max identified from past practice
Key work and internal support processes A systems approach to organizational performance management requires key work processes to be defined as depicted in the Customer Focus and Delivery of Services goals above. They are our most important internal value-creation processes. These key work processes are those that involve the majority of the workforce and produce customer and stakeholder value.. (They do not include projects since those are unique work processes intended to produce an outcome and then go out of existence.) In addition to the key work processes, key support processes are depicted in the Workforce Focus, Communication and Fiscal Accountability goals above. They support our value-creation processes as well as leaders and other workforce members engaged in service delivery, customer interactions, and business and enterprise management. This brings other internal service divisions into budget reporting to ensure the support processes are well designed to help the City achieve operational success. Scorecard and Dashboard The Malcolm Baldrige National Quality Award has increasingly emphasized the business aspects of the Total Quality Management of the 90’s, moving away from a narrow definition of quality as defects in a process or service. The dominant themes are a data-based approach to problem solving, a strong
City of Lee’s Summit Annual Budget FY16
36 | P a g e
2: Administrative Summary emphasis on organizational and behavioral considerations, a customer-oriented market-sensitive approach to the design and delivery of both programs and services, and a desire for continual improvement. Other approaches to total quality management practices include the ISO 9000 standards, the W. Edwards Deming, Joseph Juran, and Phillip Crosby philosophies from the early years of initiating total quality management to improving productivity beginning in 1927 through today.
The City’s goals and objectives were directly aligned with four Balanced Scorecard perspectives (Kaplan and Norton framework), that of stakeholders, employees, operations and financials. This scorecard displays progress on the key measures that the Performance Excellence teams identified for each strategic goal area. For instance, to measure employee learning and growth, the City conducts an employee “snap shot” survey every year to determine satisfaction levels. The resulting scores can be benchmarked with like municipalities and organizations (such as ICMA) or other industry leaders and trended internally over time to evaluate the strength of the City’s own performance results. The scorecard utilizes color codes to depict the level of performance for quick and easy identification of at risk areas through exceptional performance. Reports are reviewed on a quarterly basis with the Management Team which also includes assessing and evaluating the progress on tactical strategies utilizing a dashboard. This report contains associated timelines to identify those action plans behind schedule as well as ahead of schedule. Additional reports aid in determining where additional resources are needed to achieve the goals and objectives. Summary This process helps us to better understand our organization and to define what it considers the most important. Our organizational core competencies are our final checkpoint to ensure the budget reports on the areas we believe to be our greatest expertise. They are those strategically important capabilities that are central to fulfilling our mission and make us unique within our service environment. Listed below are each core competency and its relationship to the mission: Core Competency Resource Management
How Core Competency Supports Mission Without money, equipment, buildings and people we can’t get our jobs done
Community Relations
Without the ability to build relationships, we won’t have political good will and trust from our stakeholders
Service Delivery
Without the ability to add value in our programs and services, the organization will not be viewed as progressive, effective, and efficient
This information helps us to demonstrate performance excellence and continuous improvement utilizing effective and efficient processes. These are many of the factors that are both necessary to achieve optimum performance over time. We want to manage the components of the City as a unified whole in
City of Lee’s Summit Annual Budget FY16
37 | P a g e
2: Administrative Summary order to operate in a fully interconnected, and mutually beneficial manner. We understand that change is not easy and that progress must be made at all departmental levels for lasting change to take place. By aligning our work processes with the strategic direction and standardizing for consistency from one department to another, as applicable, employees in different parts of the organization avoid working at cross-purposes.
City of Lee’s Summit Annual Budget FY16
38 | P a g e
2: Administrative Summary
City of Lee’s Summit Performance Excellence Balanced Dashboard The City’s Business Planning review process is conducted on an ongoing basis, both with the employee teams and weekly during Management Team meetings. It follows a systematic process where organizational measures in the balanced scorecard are reviewed as well as the measures reflecting performance against action plans.
City of Lee’s Summit Annual Budget FY16
39 | P a g e
2: Administrative Summary
City of Lee’s Summit Annual Budget FY16
40 | P a g e
2: Administrative Summary
City of Lee’s Summit Annual Budget FY16
41 | P a g e
2: Administrative Summary
City of Lee’s Summit Annual Budget FY16
42 | P a g e
3: Budget Overview
Fund Structure The City budget is divided into 70 different funds which fall into one of two major categories: Governmental Fund Types Governmental Funds are those which rely on taxes for support. The taxes are deposited into the revenue accounts of the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds. Proprietary Fund Types Proprietary Funds rely on user charges for support and include the Enterprise Funds, which provide services to and collect fees from the general public. The Internal Service Funds provide service to and collect fees from the General Operating Fund, Special Revenue Funds, and Enterprise Funds that are directly benefited. Governmental Fund Types General
General
Special Revenue
Parks & Recreation Fund Gamber Center Legacy Park Community Ctr Summit Waves Cemetery Trust Fund Business & Industry Fund Entitlement Fund VAWA Grant Fund Public Safety Equipment Replacement Fund
Debt Service
GO Debt Park COP Debt
City of Lee’s Summit Annual Budget FY16
Proprietary Fund Types Capital Project
SummitWoods East TIF Hartley's Block TIF I470 Business Center TIF Chapel Ridge TIF Longview TIF Longview TDD Ritter Plaza TIF Todd George/50 Hwy TIF Water Tap Fund Sewer Tap Fund Water Construction Sewer Construction WU Equipment Replacement Fund ERP System Airport Construction Fund Capital Improvement Sales Tax R&B Improvement Fund Park Development Fund Neighborhood Park Renovations Water/Sewer Bonds Public Safety 2010 Cultural Arts 2013 Bonds Road Improvments 2013 Bonds
Enterprise
Water/Sewer Fund Airport Fund Solid Waste Management Fund Harris Park Recreation Center
Internal Service
Central Building Services Fleet Operations ITS Services ST Disability Fund Unemployment Trust Fund Insurance Trust Fund Work Comp Self Insurance
44 | P a g e
3: Budget Overview
Review of Funds The following table lists the estimated beginning fund balance or retained earnings; projected revenues; and expenditures (including interfund transfers) and the projected ending fund balance for all City funds. Unaudited Balance 6/30/2015 GOVERNMENTAL FUNDS General Fund Total Governmental Funds
19,797,207 19,797,207
FY16 Budget Add Less Revenues Expenditures 61,187,360 61,187,360
61,185,805 61,185,805
Projected Balance 6/30/2016 19,798,762 19,798,762
SPECIAL REVENUE FUNDS Gamber Center Legacy Park Community Center Parks & Recreation Fund Summit Waves Aquatics Business and Industry CDBG Entitlement Cemetery Trust Fund Summit Woods TDD Longview TDD Violence Against Women Grant Fund Public Safety Equipment Replacement Postclosure Trust Fund Total Special Revenue Funds
332,753 771,921 1,713,944 104,538 156,839 (9,067) 1,241,590 633 4,145 342,218 87,038 4,757,298 9,490,476
521,172 1,934,839 3,366,418 592,820 366,715 262,782 304,334 379,776 7,728,856
458,725 1,809,755 3,207,072 590,401 328,502 372,008 238,698 23,000 37,342 152,167 332,366 7,550,036
395,200 897,005 1,873,290 106,957 195,052 (381,075) 1,265,674 (22,367) (33,197) 494,385 134,448 4,757,298 9,669,296
DEBT SERVICE FUNDS G.O. Debt Service Fund Park Certificate of Participation Debt Fund Total Debt Service Fund
7,081,717 1,967,825 9,049,542
8,248,940 3,506,215 11,755,155
11,091,013 3,562,535 14,653,548
4,239,644 1,911,505 6,151,149
3,450,871 515 306,567 31,219,379 938,255 (26,405) 457,243 6,019,710 11,897,541 469,718 18,308,902 14,967,356 6,337,089 4,490,651 250,402 (6,672,250) 4,408,935 186,254 1,094,879 (509,485) 81,209 2,405,025 (3,618,409) 33,645 99,415,827
2,709,865 44,026 7,434,818 1,728,521 300,915 1,141,361 1,607,162 3,050,107 3,241,057 695,000 7,416,526 89,941 1,087,197 677,672 2,000,500 7,152,367 50,000 -
2,450,605 295,243 562,800 1,680,499 431,371 3,043,000 230,000 807,376 2,825,000 2,095,000 678,000 8,361,000 266,316 8,435,920 2,225,000 180,000
CAPITAL PROJECT FUNDS Summitwoods East TIF Hartley Block (TIF) I-470 Business Center TIF Capital Improvements Sales Tax Chapel Ridge TIF Longview TIF Airport Improvement Water Tap Fund Sewer Tap Fund Water District 14 Water Construction Sewer Construction Water/Sewer Equipment Replacement Road & Bridge Improvement Ritter Plaza TIF Todd George/50 Hwy TIF Road & Bridge Excise/Sales Tax Neighborhood Park Development Road Improvement 2010 Tudor Road Improvement 2010 TIF Application Fund Road Improvements 2013 Blue Parkway & Colbern CID Fund US 50/Rte 291S Interch Bonds Total Capital Project Funds ENTERPRISE FUNDS Harris Park Community Center Airport Operating Water Utility Operating Solid Waste Management Total Enterprise Funds INTERNAL SERVICE FUNDS Short-Term Disability Trust Unemployment Trust Claims & Damages Reserve Fund Workers Compensation Self-Insurance Central Building Services Fleet Operations Information Technology Systems Total Internal Service Funds Grand Total
Net Change Percent Amount 1,555 1,555 62,447 125,084 159,346 2,419 38,213 (372,008) 24,084 (23,000) (37,342) 152,167 47,410 178,820 (2,842,073) (56,320) (2,898,393)
0.0% 0.0% 18.8% 16.2% 9.3% 2.3% 24.4% 4102.9% 1.9% -3633.5% -900.9% 44.5% 54.5% 0.0% 1.9% -40.1% -2.9% -32.0%
40,427,035
50,000 2,405,000 9,000 1,384,000 38,415,130
3,710,131 (250,702) (256,233) 38,654,197 986,277 (156,861) (2,585,757) 6,931,071 12,697,327 469,718 18,534,009 16,113,413 6,354,089 3,546,177 74,027 (14,020,973) 5,086,607 (38,246) 914,879 6,642,882 81,209 25 (3,627,409) (1,350,355) 106,405,496
7.5% 259,260 (251,217) -48780.0% (562,800) -183.6% 23.8% 7,434,818 48,022 5.1% 494.1% (130,456) (3,043,000) -665.5% 15.1% 911,361 6.7% 799,786 0.0% 1.2% 225,107 7.7% 1,146,057 0.3% 17,000 -21.0% (944,474) -70.4% (176,375) 110.1% (7,348,723) 15.4% 677,672 (224,500) -120.5% -16.4% (180,000) 7,152,367 -1403.8% 0.0% (2,405,000) -100.0% 0.2% (9,000) (1,384,000) -4113.5% 2,011,905 2.0%
348,894 33,326,142 162,582,067 2,574,541 204,675,878
1,492,259 5,552,830 35,227,819 2,992,035 45,264,943
1,576,799 4,934,852 37,464,516 3,083,688 47,059,855
264,354 33,944,120 160,345,370 2,482,888 202,880,966
(84,540) 617,978 (2,236,697) (91,653) (1,794,912)
-24.2% 1.9% -1.4% -3.6% -0.9%
134,412 75,123 125,641 1,394,130 2,206,050 9,396,471 3,067,971 16,437,424
33,736 20,353 897,477 912,159 1,702,699 3,352,840 3,617,765 10,537,029
33,533 32,262 875,000 929,352 1,599,552 6,228,659 4,314,721 14,013,079
134,615 63,214 148,118 1,376,937 2,309,197 6,520,652 2,371,015 12,961,374
203 (11,909) 22,477 (17,193) 103,147 (2,875,819) (696,956) (3,476,050)
0.2% -15.9% 17.9% -1.2% 4.7% -30.6% -22.7% -21.1%
358,866,354
176,900,378
182,877,453
357,867,043
(5,977,075)
-1.7%
City of Lee’s Summit Annual Budget FY16
45 | P a g e
3: Budget Overview
Combined Revenues by Type General
Special Revenue
Debt Service
Property taxes $ Sales tax Franchise tax Motor vehicle taxes Bed tax Other taxes Fines and forfeitures Licenses and permits Intergovernmental Charges for services Material and fuel sales Investment earnings Other Sale of property Bond Proceeds Interdepartment revenues Transfers in
18,770,513 14,690,702 13,640,847 3,397,624 331,239 1,532,144 1,655,673 979,021 3,566,230 1,557,065 1,066,302
$ 3,111,019 351,515 2,500 23,250 305,034 2,836,568 153,417 12,498 142,549 101,000 689,506
$
8,162,690 3,502,715 41,250 48,500 -
$
61,187,360
$ 7,728,856
$ 11,755,155
Capital Projects $
3,869,568 16,508,783 677,672 533,537 1,271,247 331,485 1,455,000 7,152,367 8,627,376
$ 40,427,035
Internal Service
Enterprise $
289,412 22,000 3,905,382 38,626,590 1,075,424 83,681 412,471 849,983
$
28,087 750 812,090 9,013,699 682,403
Total $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
33,913,790 34,702,200 13,640,847 3,397,624 351,515 1,011,411 1,886,056 1,677,673 5,722,974 46,300,635 1,228,841 504,251 3,567,835 913,090 7,152,367 9,013,699 11,915,570
$ 45,264,943
$ 10,537,029
$ 176,900,379
Enterprise
Internal Service
Total
Combined Expenses by Type General
Special Revenue
Debt Service
Capital Projects
Personal services $ Supplies for resale Other supplies & services Repairs and maintenance Utilities Fuel and lubricants Depreciation Miscellaneous Interest Debt service Capital outlay Construction Interdepartment charges Transfers out
42,372,284 141,000 8,237,357 1,383,654 1,707,842 696,139 148,390 5,479,125 1,020,014
$ 3,646,128 $ 2,289,125 140,603 551,679 381,936 45,954 33,883 1,540,945 10,997,000 372,192 (121,360) 266,301 84,198 1,975,000
$
$
61,185,805
$ 7,550,035
$ 38,415,130
$ 14,653,548
6,752,254 4,500 1,979,000 29,547,000 132,376
$
6,140,066 16,310,468 4,424,959 693,892 811,059 355,361 5,120,948 87,423 1,123,253 287,175 955,100 10,750,152
$ 47,059,855
$ 3,327,232 2,394,279 548,478 268,836 7,200 2,168,450 4,829,304 (31,061) 496,110 4,250
$ $ $ $ $ $ $ $ $ $ $ $ $ $
55,485,709 16,451,468 24,238,578 3,177,703 3,169,673 1,104,654 7,289,399 269,696 2,668,698 10,997,000 7,467,671 29,394,579 7,196,636 13,965,990
$ 14,013,080
$ 182,877,453
Transfers Out: Includes payments for expansion items, appropriations for the Arts Council, Beautification th Commission, and 4 of July event expenses.
City of Lee’s Summit Annual Budget FY16
46 | P a g e
3: Budget Overview
CHANGES IN FUND BALANCES Lee's Summit, Missouri Combining Funds Statement By Fund Types For Fiscal Year 2016 Special Revenue
General Est. Beginning Balance $
19,797,207
Revenues Transfers In
60,121,058 1,066,302
$ 9,490,476
Debt Service $
9,049,542
Capital Projects
Enterprise
Internal Service
Total
$ 99,415,827
$ 204,675,878
$ 16,437,424
$ 358,866,354
7,039,350 689,506
11,755,155 0
31,799,659 8,627,376
44,414,960 849,983
9,854,626 682,403
164,984,809 11,915,570
Total Resources
80,984,567
17,219,332
20,804,697
139,842,862
249,940,821
26,974,453
535,766,733
Less: Expenditures Transfers out
60,165,791 1,020,014
7,465,837 84,198
12,678,548 1,975,000
38,282,754 132,376
36,309,703 10,750,152
14,008,830 4,250
168,911,463 13,965,990
Ending Balance $ Fund Balance Change: Amount Percent
19,798,762
$ 9,669,297
$1,555 0.0%
$178,821 1.9%
$
6,151,149
($2,898,393) -32.0%
$ 101,427,732
$2,011,905 2.0%
$ 202,880,967
($1,794,911) -0.9%
$ 12,961,373
($3,476,050) -21.1%
$ 352,889,280
($5,977,074) -1.7%
Fund and Department organization The General Fund: This fund includes budgets for 10 departments that provide the mission critical services to our residents, such as police and fire protection, street maintenance, planning, codes, court, and general administration of the City. Special Revenue Funds: Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trust or major capital project) requiring separate accounting because of legal or regulatory provisions or administrative action. This includes the Parks, grants, business and industry, tax increment financing (TIF), and transportation development district (TDD) funds. Debt Service Funds: The city utilizes two funds to record the receipt and disbursement of monies used to repay principal and interest charges on city issued debt. The General Obligation Debt Service Fund and Park COP Debt Service Fund are used to account for the annual retirement of bonds issued from 2003 through 2014. Capital Project Funds: The capital improvement funds include budgets that allocate expenses for infrastructure improvements. The City’s capital projects are funded by a variety of different sources. The City’s road and bridge maintenance projects and capital improvements are funded by a ½ sales tax. Other projects are funded by tax increment financing and through the sale of general obligation bonds. Enterprise Funds: The City’s enterprise funds hold the budgets for departments that operate in business-type activities. These funds rely on revenues generated from sales of materials or services. The enterprise funds include budgets for our Water Utilities, Solid Waste, and Airport activities.
City of Lee’s Summit Annual Budget FY16
47 | P a g e
3: Budget Overview Internal Service Funds: The City uses internal service funds, or Proprietary Funds, to account for its fleet of vehicles and equipment, information technology systems, central building services, and trust funds. The internal service departments allocate costs for the reimbursement of services to other departments.
General Fund Departments FY15 FY16 Change from FY15 Budget Department $ % Budget Budget 8.6% Administration 3,609,723 3,951,437 341,714 -15.1% 3,842,083 3,337,049 -505,034 Pub. Wks./Engineering 2.5% 19,245,826 19,738,636 492,810 Law Enforcement -2.8% 15,543,898 15,114,975 -428,923 Fire/Ems Services 4.7% 6,092,469 6,395,253 302,784 Finance -39,714 -3.3% Legal Services 1,258,971 1,219,257 0 -795,735 Planning & Codes 795,735 809,800 9,193 1.1% Municipal Court 800,607 -4.6% PW Operations Division 7,079,262 6,769,131 -310,131 1,198,238 0 -1,198,238 Codes Administration 66.1% Development Center 979,114 2,887,583 1,908,469 0 962,684 962,684 Planning & Neighborhood Srvcs Special Revenue Fund Departments -5.2% Parks & Recreation 3,373,659 3,207,072 -166,587 635,077 458,725 -176,352 -38.4% Gamber Center -12.7% Legacy Park Community Center 1,912,028 1,697,269 -214,759 590,401 -78,009 -13.2% Summit Waves Aquatic Center 668,410 -15.1% Cemetery 274,667 238,698 -35,969 Enterprise Fund Departments -4.1% Water Utilities 39,000,851 37,464,516 -1,536,335 Airport 4,732,366 4,934,852 202,486 4.1% Solid Waste (Landfill) 3,038,106 3,083,688 45,582 1.5% Harris Park Community Center 1,203,339 1,576,799 373,460 23.7% Internal Service Fund Departments Central Building Services 1,274,808 1,599,552 324,744 20.3% Fleet 5,379,697 6,228,659 848,962 13.6% ITS (Information Technology) 3,934,140 4,314,721 380,581 8.8%
City of Lee’s Summit Annual Budget FY16
48 | P a g e
3: Budget Overview Full Time Equivalents (FTE) FTE’s are positions or employees that are expressed as a ratio of hours worked. One FTE is assumed to work 2,080 hours per year. For Firefighters, 1 FTE is assumed to work 2,912 hours per year. The table below lists all approved FTEs for FY16. Example FTE Calculation: Position Hours Worked Hours Available Management Analyst 1500 ÷ 2080 =
Fund General Fund Parks & Recreation Water Utilities Airport Solid Waste CBS Fleet ITS Total
Full Time Equivalents (FTE) FY14 FY15 FY16 531.24 528.74 526.11 116.18 113.95 111.52 59.98 59.5 60.5 6.3 6.22 6.26 14.8 14.8 14.8 8.75 8.62 10.62 9 9.12 9.12 26.23 25.89 24.71 772.48 766.84 763.64
FTE 0.72
Change from FY15 $ % -2.63 -0.5% -2.43 -2.1% 1 1.7% 0.04 0.6% 0 0.0% 2 23.2% 0 0.0% -1.18 -4.6% -3.2 -0.4%
A summary of variances can be found in the general fund overview section on page 87 and the individual department summaries. 900 800
772
766
763
ITS
700
Fleet
600
CBS
500
Solid Waste
400 300
Airport 531.24
528.74
526.11
Water Utilities
200
Parks & Recreation
100
General Fund
0 FY14
City of Lee’s Summit Annual Budget FY16
FY15
FY16
49 | P a g e
3: Budget Overview Key Financial Trends The City’s Budget Committee is updated monthly regarding the City’s financial condition and financial trends. In addition to the monthly information, the Budget Committee reviews key trends when presented midyear projections and budget estimates. In FY16, the City’s major sources showed marginal growth following rapid development that started early in 2000 and slowed during the most recent recession. New growth of approximately 2.5% is expected to occur over the next five year period.
General Fund Major Revenues 20 18
Millions
16 14 12 Sales Tax
10
Franchise Tax
8
Property Tax
6 4 2 2006
2007
2008
2009
2009
2010
2012
2013
2014
2015
2016 Budget
In addition to revenue analysis, key expenditure trends are presented for Budget Committee review. The largest category of expenditures, excluding capital costs, is for personnel. An important trend the City is monitoring is the increase in health insurance costs. Health insurance is growing faster than any other operating cost.
City of Lee’s Summit Annual Budget FY16
50 | P a g e
3: Budget Overview
General Fund Major Expenses $35,000
Thousands
$30,000
Salaries
$25,000
Benefits calc on Salary
$20,000
Health/Dental
$15,000 Other Supplies, Service, & Charges Repairs and Maintenance
$10,000 $5,000 $FY09
FY10
FY11
FY12
FY13
FY14
FY15 Proj
FY16 Budget
Fuel & Lubricants
Beginning in FY15 and continuing to FY16, the City Manager presented to the City Council a two year plan that would adjust general fund expenditures to a level that could be supported by regular, reoccurring revenues and achieve a balanced budget. The FY15 budget anticipated the use of approximately $1.4m of funding from the reserve balance however, through revenue growth and cost cutting measures the general fund reserve balance is expected to grow by approximately $2.4m.
General Fund Reserve Balance 28.00 26.00 24.00
Millions
22.00 20.00 Fund balance—beg.
18.00
Fund balance—end.
16.00 14.00 12.00 10.00 FY08
FY09
FY10
FY11
City of Lee’s Summit Annual Budget FY16
FY12
FY13
FY14
FY15 FY16 Proj Budget
51 | P a g e
3: Budget Overview The FY16 Adopted Budget, as outlined in the ordinance, followed recommendations from the Budget Committee. For more information about these recommendations please see the General Fund Overview Section.
City of Lee’s Summit Annual Budget FY16
52 | P a g e
3: Budget Overview
City of Lee’s Summit Annual Budget FY16
53 | P a g e
3: Budget Overview
City of Lee’s Summit Annual Budget FY16
54 | P a g e
3: Budget Overview
City of Lee’s Summit Annual Budget FY16
55 | P a g e
3: Budget Overview Organizational Policies and Procedures Summary of Significant Accounting Policies The City of Lee’s Summit, Missouri (the City) was incorporated in 1868 and covers an area of approximately 64 square miles in Jackson and Cass Counties, Missouri. Lee’s Summit is a charter city operating under an elected Mayor-City Council form of government. The City Administrator is the chief administrative officer of the City. The City provides services to more than 70,000 residents in many areas including law enforcement, fire protection, water and sewer services, community enrichment and development, and various social services. Educational services are provided by separate governmental entities. The accounting and reporting policies of the City conform to generally accepted accounting principles (GAAP) applicable to local governments. The following represent the more significant accounting and reporting policies and practices of the City. The Financial Reporting Entity The City is governed by an elected eight-member council and a mayor. As required by GAAP, these financial statements present the City of Lee’s Summit (the primary government). The following component unit is included in the City’s reporting entity because of the significance of its operational and financial relationship with the City. Blended Component Unit The following legally separate entity is a component unit which is, in substance, a part of the City’s general operations. This component unit provides services almost entirely to the primary government and provides services which almost exclusively benefit the primary government. Data from this unit is combined with data of the primary government for financial reporting purposes. The Lee’s Summit, Missouri Municipal Building Authority (the Authority) is a not-for-profit corporation incorporated under the laws of the state of Missouri on August 13, 1994. The Authority is governed by a three-member board appointed by the City Council. The Authority was established to promote, acquire, develop, construct, own and lease facilities within the City which are approved by the City Council for the purpose of promoting the economic, social, industrial, cultural and commercial growth and for the general benefit of the City and its residents. Administration of its various programs is performed by City employees. Although it is legally separate from the City, the Authority is reported as if it were part of the primary government because its sole purpose is to finance and construct the City’s public buildings. Separate financial statements for the Authority are not prepared. Basis of Presentation The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, equities, revenues and expenditures or
City of Lee’s Summit Annual Budget FY16
56 | P a g e
3: Budget Overview
expenses. The various funds are grouped by type in the general purpose financial statements. The following fund types and account groups are used by the City. Governmental Fund Types The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trust or major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, principal, interest and fiscal charges on long-term obligations other than obligations payable from the operations of Proprietary Fund Types. Capital Project Funds are used to account for financial resources segregated for the acquisition or construction of major capital facilities other than those financed by Proprietary Fund Types or Expendable Trust Funds. Proprietary Fund Types Enterprise Funds are used to account for operations which provide a service to the general public and are financed primarily by user charges from such services. Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. Fiduciary Fund Types Expendable Trust Funds are used to account for assets held in trust by the City for others. The City’s Expendable Trust Funds include the Entitlement Fund. Account Groups The General Fixed Assets Account Group is established to account for all fixed assets of the City other than those accounted for in the Proprietary Fund Types. Construction in progress, which recognizes the value of assets not completed, is also included in this fund. The General Long-Term Debt Account Group is established to account for all long-term indebtedness of the City except that accounted for in the Proprietary Fund Types. Basis of Accounting The accounting and financial reporting applied to a fund is determined by its measurement focus. All Governmental Fund Types and Expendable Trust Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e.,
City of Lee’s Summit Annual Budget FY16
57 | P a g e
3: Budget Overview
revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used by all Governmental Fund Types, Expendable Trust Funds and Agency Funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available). “Measurable” means the amount of the transaction can be determined, and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes as available if they are collected within 60 days after year-end. A one-year availability period is used for revenue recognition for all other Governmental Fund revenues. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the Debt Service Fund for payments to be made early in the following year. Those revenues susceptible to accrual are property taxes, franchise taxes and interest. Sales taxes collected and held by the state at year-end on behalf of the City also are recognized as revenue. Fines, licenses and permits are not susceptible to accrual because, generally, they are not measurable until received in cash. All Proprietary Fund Types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary Fund Type operating statements present increases (e.g., revenues, non-operating revenues and operating transfers in) and decreases (e.g., expenses, nonoperating expenses and operating transfers out) in net total assets. The accrual basis of accounting is utilized by the Proprietary Fund Types. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City does not apply Financial Accounting Standards Board (FASB) statements issued after November 30, 1989 for its Proprietary Funds. Cash Equivalents Cash equivalents include investments with original maturities of less than three months. Other Taxes and Revenues Recognized state shared taxes, such as motor, gas and liquor taxes, represent payments received during the current fiscal period. Federal and state grant aid is reported as revenue when the related reimbursable expenditures are incurred. Unrestricted aid is reported as revenue in the fiscal year the entitlement is received. Charges for services are generally susceptible to accrual and are recorded as revenue when earned.
City of Lee’s Summit Annual Budget FY16
58 | P a g e
3: Budget Overview
Licenses, fees, fines, forfeitures and other revenues are generally not susceptible to accrual and are recorded when received in cash. Inventories Inventories, which primarily consist of water line maintenance materials, are valued at cost using the first-in, first-out (FIFO) method. The costs of Governmental Fund Type inventories are recorded as expenditures when consumed rather than when purchased. Prepaid Insurance Prepaid insurance represents the payment of insurance premiums for coverage that benefits more than one fiscal period. The premium amounts are amortized over the policy periods. Deferred Bond Issue Costs and Unamortized Bond Discount Deferred bond issue costs and unamortized bond discount are amortized over the life of the debt using the effective interest method. Property, Plant and Equipment Property, plant and equipment owned by the Proprietary Fund Types are stated at actual or estimated historical cost, less accumulated depreciation. Contributed assets are recorded at estimated fair market value at the time received. Assets acquired through capital leases are recorded in the appropriate property, plant and equipment accounts and are depreciated over their estimated useful lives. Amortization of assets recorded under capital leases is included within Proprietary Fund Type depreciation expense. Depreciation of plant and equipment is provided on the straight-line basis over the estimated useful lives of the respective assets as follows:
Buildings
20–40 years
Plant and water/sewerage systems
35–75 years
Machinery and equipment
3–15 years
It is general practice to charge maintenance and repairs to expenses. Major expenditures for renewals and betterments are capitalized and depreciated over their estimated useful lives. Cost of assets sold or retired and the related amounts of accumulated depreciation are eliminated from the accounts in the year of sale or retirements, and any resulting gain or loss is reflected in the general purpose financial statements. General Fixed Assets General fixed assets have been acquired for general governmental purposes. Assets purchased are recorded as expenditures in the Governmental Fund Types and capitalized at actual or estimated
City of Lee’s Summit Annual Budget FY16
59 | P a g e
3: Budget Overview
historical cost in the General Fixed Assets Account Group. In the case of gifts or contributions, such assets are recorded in General Fixed Assets Account Group at fair market value when received. Certain improvements, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not been capitalized. No depreciation is provided on general fixed assets. Interest Expenditures Expenditures for interest on general long-term debt are accounted for in the year of payment. Compensated Absences Under the terms of the City’s personnel policy, City employees are granted vacation and sick leave in varying amounts. In the event of termination, an employee is paid for accumulated vacation days up to the equivalent of two years’ vacation (maximum of six weeks). Employees are paid for one-eighth of accumulated sick leave upon termination if they have five or more years of employment with the City. All employer related costs of vacation and sick leave are accrued and recorded when earned. Only the current portion of accrued vacation and sick leave is recorded in the Governmental Fund Types, and the remainder of the liability is reported in the General Long-Term Debt Account Group. All employer related costs of accrued vacation and sick leave in the Proprietary Fund Types is recorded entirely within those funds. Budgetary Procedures The reported budgetary data represents the final approved budget after amendments as adopted by the City Council. Amendments to the original budget were not material, and appropriations lapse at yearend. The basis of accounting is the same for both budgeting and GAAP reporting purposes. The City Council utilizes the following procedures in establishing the budgetary data reflected in the general purpose financial statements. (1) Prior to the beginning of the fiscal year, the City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget provides a complete financial plan of all funds and activities for the upcoming fiscal year. In no event shall the total proposed expenditures exceed the estimated revenues to be received plus any unencumbered cash reserves estimated to be on hand at the beginning of the budget year. (2) Public hearings are conducted to obtain taxpayer comments. (3) Prior to July 1, the budget is legally enacted through passage of an ordinance. The appropriated budget is prepared by fund, department and program. Department heads may make transfers of appropriations within their departments. Upon written request by the City Administrator, the Council may, by ordinance, transfer part or all of any unencumbered appropriation balance from one department to another. The legal level of budgetary control is the department level.
City of Lee’s Summit Annual Budget FY16
60 | P a g e
3: Budget Overview
Although the City is legally required to prepare budgets for all funds, there is no legal requirement to report on those budgets. Therefore, the Combined Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual presents a comparison of budget and actual for only the General Fund, Special Revenue Funds, Debt Service Fund and the Expendable Trust Fund. All special revenue funds have annual appropriated budgets except for the Federal Emergency Management Measures Fund (FEMA). The FEMA Fund is activated only when the City is declared a state or federal disaster area. Capital projects are budgeted on a project basis rather than on an annual fiscal basis; therefore, a comparison of actual to budget for Capital Project Funds would not be meaningful
Budget Adoption and Administration As adopted by City Charter and Council Policy The following procedures will be followed in the preparation, adoption, administration, and control of departmental budgets within city organizations. Preparation The following fund types shall be budgeted:
• • • • • •
General Operating Special Revenue Debt Service Capital Projects Enterprise Internal Service
Prior to the preparation of departmental budget requests, the City Manager and Department Directors shall meet with the City Council to discuss priorities for the coming fiscal year. The priorities shall be the basis for which the Department Directors then prepare individual Program Budget requests for the upcoming year. The City Manager and Department Directors will meet to present and discuss their respective budget requests at least two months prior to the beginning of the new fiscal year. They will make adjustments as necessary to meet the overall budget goals and funding levels of the City. Budget Adoption The City Manager and Department Directors will submit their combined budget proposal to the Budget Committee one month prior to adoption. The Mayor and City Council will review the proposed budget draft during the Work Session preceding the meeting of adoption. The City Council shall publish in one or more newspapers in the City a general summary of the budget and a notice stating: 1) the times and places where copies of the message and budget are available for City of Lee’s Summit Annual Budget FY16
61 | P a g e
3: Budget Overview inspections by the general public; and 2) the time and place, not less than two weeks after such publication, for a public hearing on the budget. Adoption of the budget will be by passage of the budget ordinance by the City Council and approval by the Mayor, as provided by law. The budget shall provide a complete financial plan of all city funds and activities for the ensuing fiscal year and, except as required by law or this Charter, shall be in such form as the City Manager deems desirable or the Council may require. The budget must be balanced, in which expenses do not exceed revenues. In no event shall the total proposed expenditures exceed the estimated revenues to be received plus any unencumbered cash reserves estimated to be on hand at the beginning of the budget year. Expense categories for the City of Lee’s Summit include:
• Personal Services: Control of expenditures in the area of personal services is provided through position control. No new positions may be created without the approval of the City Manager, Mayor, and City Council. • Commodities: The Commodities category shall include uniforms that are purchased, office equipment and furniture, small tools, janitorial, fuel and lube and other items consumed in performing the function of the department. • Contractual Services: Contractual Services are professional fees such as organizational memberships, legal fees, auditing, testing, service and equipment rentals, and maintenance and repair expenses incurred in the routine operation of the department. • Maintenance & Repairs: The Maintenance & Repairs category is for buildings, vehicles and equipment used in the delivery of service by the department. This also includes the Internal Services overhead charge. • Utilities: Utilities expenditures are those incurred for gas, electric, phone, cell phones, water and sewer. • Fuel & Lubricants: These are the petroleum expenditures incurred for motorized equipment and vehicles. • Depreciation: The periodic expense of assets based on value and estimated life of the capital assets. • Debt Service: This is the principal, interest and fiscal agent expenditures relating to general obligation, revenue bonds, and certificates of participation as well as any lease purchase type debt instruments. • Interfund Transfers: Interfund transfers are used to provide resources on a program basis while still maintaining fiscal integrity by fund source and type. • Capital Outlay: Capital Outlays are expenditures incurred through the acquisition or enhancement of capital assets, to the extent the expenditure exceeds $5,000 and has a
City of Lee’s Summit Annual Budget FY16
62 | P a g e
3: Budget Overview
useful life or can be expected to extend the life two years or more. A more detailed explanation of this account may be found in the City's Capital Asset Policy. Administration No Capital Expenditure will be made unless:
• It was specifically budgeted for in the adopted budget, or the Assistant to the City Manager determines that there are funds available in the department's budget, and the City Manager approves the purchase in writing. • The City Council upon recommendation of the appropriate standing committees shall authorize the unbudgeted expenditure if it exceeds $10,000 to the extent that the reappropriation of funds does not diminish the overall goal and objectives of the departments program for which these funds are taken. The request for such approval shall be highlighted on the Council's Regular Agenda, and backup material provided which explains the purpose of the change and its impact on budget priorities. The City Manager shall approve all transfers of funds between line items within each department's budget which exceed $10,000. The City Manager may transfer part or all of any unencumbered appropriation balance among programs within a department and, upon written request by the City Manager, the Council may by ordinance transfer part or all of any unencumbered appropriation balance from one department to another. Reporting: The Administration Department will provide timely reports of budget position to each Department Director, the City Manager, Mayor, and City Council. Expenditure Projection and Analysis: The Administration Department will analyze the expenditures of each department on a monthly basis and inform each Department Director whose expenditures appear to be exceeding the adopted budget. By the end of the seventh month of each budget year, the Administration Department will notify all Department Directors whose budgets are likely to be exceeded. The City Manager, Mayor, and City Council shall also be notified. Each Department Director so notified shall, within two weeks, inform the Finance Director and City Manager of the actions he/she will take to avoid exceeding the departmental budget. CONTROL OF BUDGET OVERRUNS Budget Overruns: If, during the budget year, the Administration Department shall determine that a department's expenditures will exceed the approved budget, the Assistant to the City Manager shall with the approval of the City Manager prepare an adjustment to the budget. If the department's expenditures are expected to exceed the approved budget a Budget Amendment shall be prepared for
City of Lee’s Summit Annual Budget FY16
63 | P a g e
3: Budget Overview submission to the Mayor and City Council. In the event of an emergency, the City Manager may authorize an expenditure by a department which is in an "overrun" situation. Summary The Director of each department shall be held responsible and accountable for the expenditures of his/her department. The Assistant to the City Manager shall, through timely reports and analysis, keep Department Directors and elected officials informed of any possible budget problems. A department shall not exceed its approved budget without authorization from the City Manager. Amendments which change the total budgeted appropriations for any fund will be made through adoption of a budget revision ordinance.
CASH MANAGEMENT PROCEDURES As adopted by Council Policy
The City’s idle funds shall be invested in accordance with the Investment Policy adopted by the Mayor and City Council. Supplemental to these general policies and procedures the City’s Cash Management Officer shall monitor the cash and investment portfolio to maintain adequate collateral of deposits in excess of FDIC insurance. A schedule of collateral shall be maintained and monitored to insure that market values are equal to, or greater than 105% of estimated deposits in the overnight money market account. Weekly cash flow projections should be determined and/or calculated by comparing general ledger cash balances (cash board) with expected receipts or funds needed to cover next two payments cycles, security maturities and payments. If cash on hand is projected to exceed short term needs, then an analysis should be made to invest excess in a fixed maturity security. The new investment maturity should attempt to provide continuous monthly maturities up to a maximum of three years. The interest rate quoted may be tied to another rate to allow for market fluctuations (i.e, the most recent ninety-day (90) treasury bill plus or minus basis points). Any such rate must be subject to independent verification. To accomplish the above listed duties the following activities should be performed on a daily basis: • • • • •
Log on to the Bank On-Line Account Inquiry system and print the account balance for that day. Compare the bank balance with the General Ledger Cash Board for reasonableness, i.e. recently issued checks or deposits that may not have cleared. Compare the accounts payable open items list for large payments scheduled for the current and subsequent week to arrive at a cash needs amount. Project any significant cash receipts due that would correspond with outgoing payments, i.e. sales tax normally wired on the tenth of the month, franchise tax receipts and any grant or tax payments. Establish regular vendor payments utilizing ACH process.
City of Lee’s Summit Annual Budget FY16
64 | P a g e
3: Budget Overview
DEBT MANAGEMENT POLICY As adopted by Council Policy
DEBT TYPES The City of Lee's Summit is authorized to issue General Obligation Bonds, Revenue Bonds, and LeasePurchase Certificates of Participation.
In determining the type of bond to issue, the following factors should be considered: The direct and indirect beneficiaries of the project. A significantly large proportion of citizens should benefit from projects financed from general obligation bonds. o o o o o o
The time pattern of the stream of benefits generated by the project. The revenues that may be raised by alternative types of user charges. The cost-effectiveness of user charges. The effect of the proposed bond issue on the City's ability to finance future projects of equal or high priority. The true interest cost of each type of bond. The impact on the City's financial condition and credit ratings.
General Obligation Bonds The city is authorized to issue General Obligation Bonds payable from ad valorem taxes to finance capital improvements and equipment upon a two-thirds majority vote, and on general election dates a four-sevenths majority vote, of the qualified voters. The Missouri constitution permits the City to incur general obligation indebtedness for City purposes not to exceed 10% of the assessed valuation of taxable tangible property; and to incur general obligation indebtedness not exceeding an additional 10% for acquiring rights of way; constructing and improving streets, sanitary sewers, and storm sewers; and purchasing or constructing waterworks plants. General obligation, property tax-supported bonding should be used to finance only those capital improvements and long term assets, which have been determined to be essential to the maintenance or development of the City. The City should maintain a General Debt and Interest Fund balance which is at least 50% of the average annual debt service.
City of Lee’s Summit Annual Budget FY16
65 | P a g e
3: Budget Overview
Revenue Bonds The City is also authorized to issue Revenue Bonds to finance capital improvements to its combined water and sewerage system, airport and sanitary landfill facilities. These types of Revenue Bonds require a simple majority vote. Revenue Bonds do not carry the full faith and credit of the City in servicing bond indebtedness, and such bonds are not considered in determining the legal debt margin resulting from the 20% limitation described above. However, if any taxes are pledged or dedicated to the payment of revenue bonds (sales taxes, property taxes etc.) the bonds must be voted as general obligation bonds, the debt limit must be observed, and all bonds must be paid off within 20 years.
Revenue supported bonds should be used to limit potential dependence on property taxes for those projects with available revenue sources, whether self-generated or dedicated from other sources. Adequate financial feasibility studies should be performed for each project to provide assurances as to the self-liquidating nature of the project or adequacy of dedicated revenue sources. 63-20 Corporations (Municipal Building Authority) Internal Revenue Service Ruling 63-20 allows the City to create not-for-profit corporations. Through these corporations, the City can issue tax-exempt bonds for the lease purchase of equipment and facilities without the voter approval required for the issuance of general obligation bonds--the City's obligation under a one-year annually renewable lease is not an "indebtedness" according to the Missouri Constitution. The City has financed several projects and equipment purchases through the Lee's Summit Municipal Building Authority. Lease financing is appropriate whenever the introduction of leased equipment and/or a capital improvement results in verifiable operating savings that, properly discounted, outweigh the lease financing costs. Adequate financial feasibility studies should be performed for all innovative financing proposals such as lease and lease-purchase agreements, tax increment financing, pool participation, and special assessment projects. Long term borrowing will be confined to construction of capital improvements and acquisition of capital equipment too large to be financed from current revenues.
City of Lee’s Summit Annual Budget FY16
66 | P a g e
3: Budget Overview Proceeds from long-term debt should only be used for construction project costs, acquisition of other fixed assets, bond issue costs, debt service reserve requirements, and refunding of outstanding bond issues and will not be used for current, ongoing operations. Debt will be extinguished within a period not to exceed the expected useful life of the capital project or equipment. The City should actively monitor its investment practices to ensure maximum returns on its invested bond funds while complying with Federal arbitrage guidelines. The Finance Department should continually monitor outstanding debt issues to verify compliance with debt covenants. The City's financial management policies should be oriented to maintain a balanced relationship between issuing debt and pay as you go financing. Financial Advisor The City shall retain the services of a Financial Advisor to assist the city in identifying capital financing alternatives and planning its debt program. The financial advisor's role in the debt issuance will vary depending on whether bonds are issued through a competitive or negotiated method of sale. The financial advisor should have no affiliation with the underwriting of a particular issue of the city. The financial advisor and or employees of the financial advisor shall not have made political contributions to any candidate for public office in the city for a period of two years preceding their selection as financial advisor. Method of Bond Sale When appropriate, new debt issues will be offered utilizing the competitive bid process. In a competitive sale, the financial advisor will assist in determining the structure and timing of the issue, prepare bond documents and rating agency presentations and evaluate the best bid and assist in the closing transaction. Refunding of Existing Debt The city will consider undertaking a refunding when one or more of the following three conditions exist: 1.
The present value of all refunding costs, (including interest, call premium, bond counsel, financial underwriter spread/discount and other issuance costs) is less than the present value of the current interest. Net present value savings should approximate a minimum of three percent (3%).
2.
The city wishes to restructure debt service.
City of Lee’s Summit Annual Budget FY16
67 | P a g e
3: Budget Overview 3.
The city wishes to eliminate old bond covenants that may have become restrictive.
Financial Underwriter The financial underwriter shall determine which bid for the city's bonds is best by reviewing the pricing of comparable issues, talking to potential investors, identifying other similar issues that are likely to be in the market at the same time, and assessing the level of competition among various underwriting firms utilizing the Negotiated Sale process. The financial underwriter and or employees of the financial underwriter shall not have made political contributions to any candidate for public office in the city, for a period of two years preceding their selection as financial underwriter. Federal Arbitrage Compliance Arbitrage is the difference between the yield on an issuer's tax exempt bond and the investment income earned on the proceeds. Arbitrage profits are earned when lower-yielding tax-exempt bond proceeds are invested in higher-yielding taxable securities. Federal arbitrage restrictions imposed by the federal government prohibit an issuer from retaining arbitrage profits when investing bond proceeds at a yield that exceeds the yield on the bonds. The city will calculate or contract with a reputable firm to calculate, any arbitrage liability, and rebate such, to the U.S. Treasury in accordance with federal guidelines.
CAPITAL IMPROVEMENT PROJECTS (CIP) BUDGET ADOPTION AND ADMINISTRATION POLICY As referenced by City Charter and Council Adopted Policy
The following procedures will be followed in the preparation, adoption, administration, and control of capital projects. Preparation and Adoption The City’s Charter mandates the development and annual review of a capital improvements plan and estimated operating and maintenance costs of the proposed improvements. The plan is formally adopted each year by the Planning Commission as part of the Comprehensive Plan. This approach addresses legal requirements for public hearings on the location, nature and extent of all projects. All costs identified for the first year of the plan are included in the City’s Operating Budget, which is adopted by the Mayor and City Council, for the upcoming fiscal year.
City of Lee’s Summit Annual Budget FY16
68 | P a g e
3: Budget Overview Capital Expenditures Capital Expenditures are expenditures incurred through the acquisition or enhancement of fixed assets, to the extent the expenditure exceeds $1,000 and has a useful life or can be expected to extend the life three years or more. Capital Project Financing The City of Lee's Summit is authorized to issue General Obligation Bonds, Revenue Bonds, and Lease-Purchase Certificates of Participation. In determining the type of bond to issue, the following factors should be considered: • • • • • • •
The direct and indirect beneficiaries of the project. A significantly large proportion of citizens should benefit from projects financed from general obligation bonds. The time pattern of the stream of benefits generated by the project. The revenues that may be raised by alternative types of user charges. The cost-effectiveness of user charges. The effect of the proposed bond issue on the City's ability to finance future projects of equal or high priority. The true interest cost of each type of bond. The impact on the City's financial condition and credit ratings.
General Obligation Bonds The city is authorized to issue General Obligation Bonds payable from ad valorem taxes to finance capital improvements and equipment upon a two-thirds majority vote, and on general election dates a four-sevenths majority vote, of the qualified voters. The Missouri constitution permits the City to incur general obligation indebtedness for City purposes not to exceed 10% of the assessed valuation of taxable tangible property; and to incur general obligation indebtedness not exceeding an additional 10% for acquiring rights of way; constructing and improving streets, sanitary sewers, and storm sewers; and purchasing or constructing waterworks plants. General obligation, property tax-supported bonding should be used to finance only those capital improvements and long term assets, which have been determined to be essential to the maintenance or development of the City. The City should maintain a General Obligation Debt Service and Interest Fund balance which is at least 50% of the average annual debt service. Revenue Bonds The City is also authorized to issue Revenue Bonds to finance capital improvements to its combined water and sewerage system, airport and sanitary landfill facilities. These types of Revenue Bonds require a simple majority vote. Revenue Bonds do not carry the full faith and credit of the City in servicing bond indebtedness, and such bonds are not considered in determining the legal debt margin resulting from the 20% limitation described above. However, if any taxes are pledged or dedicated to the payment of City of Lee’s Summit Annual Budget FY16
69 | P a g e
3: Budget Overview revenue bonds (sales taxes, property taxes etc.) the bonds must be voted as general obligation bonds, the debt limit must be observed, and all bonds must be paid off within 20 years. Revenue supported bonds should be used to limit potential dependence on property taxes for those projects with available revenue sources, whether self-generated or dedicated from other sources. Adequate financial feasibility studies should be performed for each project to provide assurances as to the self-liquidating nature of the project or adequacy of dedicated revenue sources.
63-20 Corporations (Municipal Building Authority) Internal Revenue Service Ruling 63-20 allows the City to create not-for-profit corporations. Through these corporations, the City can issue tax-exempt bonds for the lease purchase of equipment and facilities without the voter approval required for the issuance of general obligation bonds--the City's obligation under a one-year annually renewable lease is not an "indebtedness" according to the Missouri Constitution. The City has financed several projects and equipment purchases through the Lee's Summit Municipal Building Authority. Lease financing is appropriate whenever the introduction of leased equipment and/or a capital improvement results in verifiable operating savings that, properly discounted, outweigh the lease financing costs. Adequate financial feasibility studies should be performed for all innovative financing proposals such as lease and lease-purchase agreements, tax increment financing, pool participation, and special assessment projects. Long term borrowing will be confined to construction of capital improvements and acquisition of capital equipment too large to be financed from current revenues. Proceeds from long-term debt should only be used for design and construction project costs, acquisition of other fixed assets, bond issue costs, debt service reserve requirements, and refunding of outstanding bond issues and will not be used for current, ongoing operations. Debt will be extinguished within a period not to exceed the expected useful life of the capital project or equipment. The City's financial management policies should be oriented to maintain a balanced relationship between issuing debt and pay as you go financing.
City of Lee’s Summit Annual Budget FY16
70 | P a g e
4: Revenue Projections
Revenue Projections The primary support for general services comes from diverse revenue sources such as property taxes, sales taxes, and utility franchise taxes. Combined, these major revenue sources comprise approximately 78% of all general fund revenues. The balance of revenues is derived from user charges, fines and forfeitures, investment income, intergovernmental revenues and miscellaneous fees and charges. In previous years, these revenue sources experienced steady growth allowing the City to maintain and in some service areas expand the level of service. Recovery from the recent economic downturn has slowly occurred. In FY16, modest growth was budgeted in property and sales tax revenues but remained flat for franchise taxes. Anticipated growth is budgeted to be less than 2.5% compared to over 4% growth annually before the start of the recession. The following revenue projection pages are prepared for all major revenue sources over $1 million. They are presented in order of highest to lowest total revenue. The starting point for all account revenue projections begins with the new construction building permit activity of the past year. From this, assessed valuations are projected for the property tax accounts. The building permit information also provides an estimation of population growth, which is normally factored into the various accounts such as license, permits and fees. Historical account activity is tracked to also provide trend information to provide a comparative basis for projections. Each revenue page has five sections, which lists the account code, legal authorization, description, basis of revenue projection and the fund collection/distribution. 1. The Account Code section lists the specific line item that the receipt will be posted to in the city's general ledger accounting system. 2. The Legal Authorization section should list either the state statute or city ordinance, which allows the city to levy and receive this source of funds. 3. The Description section provides a brief explanation of the formula (i.e. tax levy times assessed valuation or building permit square footage times rate per foot), or established schedule of fees. 4. The Basis of Revenue Projection section describes the logic and/or assumptions used to arrive at the projected amounts and possibly he history or trend analysis of the particular account. The Fund Collection/Distribution section lists the most recent five years of actual receipt activity in the account, plus a projection for the current fiscal year and the upcoming budget year. In the case where a single revenue account is received in more than one fund, all funds are listed by fund category and then totaled.
City of Lee’s Summit Annual Budget FY16
72 | P a g e
4: Revenue Projections
Property Tax Legal Authorization:
Account Codes:
State Statute : Chapter 94, Chapter 137 City Ordinance : N/A
4000, 4001, 4003, 4004, 4005
Description: Revenue from the ad valorem tax, levied on all real and personal property is based upon the assessed valuation as established by the County Assessor on January 1st of each year. Real property assessed valuation is determined by applying the market value times the appropriate assessment ratios. They are as follows: Commercial/Industrial - 32%; Residential - 19%; Agricultural - 12%. Personal property assessed valuation is set at 33% of market value and is determined by the State Tax Commission. Each year the City Council must set the rates to be levied for the City’s property taxes. In odd numbered years, all county assessors are required to re-assess property values in their county. The Hancock Amendment applies to Previously Assessed Property (property assessed prior to 2015—all AV from 2014), and, limits the increase in 2015 Revenues generated by that property to the lesser of 5%, the CPI or the increase in assessed values for previously assessed property. Budget amounts are calculated using the previous calendar year's final assessment or preliminary assessment. Because reassessment only occurs in odd numbered years, budgeted amounts fall short of actual amounts because of conservative growth projections at the time of calculation.
Basis of Projection & Analysis:
Financial Trend $35,000,000 $33,000,000
Jackson County provided a preliminary assessment for FY14, CY 2013, of property values. The assessment indicated 1% growth in property tax values which will not require a levy adjustment.
$31,000,000 $29,000,000 $27,000,000 $25,000,000
The AV for previously assessed property for 2015 in LS is approximately 4.18% higher than 2014. Thus, the increase in revenues is limited to the CPI increase set by the State Tax Commission for 2015 Tax Levy purposes (0.800%). Therefore, the Revenues to be generated from previously assessed property is roughly 100.8% of revenues from 2014.
$23,000,000 $21,000,000 $19,000,000 $17,000,000 $15,000,000 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016
Annual
Actual Actual Actual Actual Actual Actual Actual Actual Budget Projected Budget
General Fund
Parks Fund
13,300,401 14,195,891 14,602,478 14,547,687 14,892,688 15,848,556 17,105,687 17,157,136 16,974,698 16,951,077 17,307,087
2,359,127 2,513,405 2,585,937 2,585,795 2,637,233 2,815,820 3,027,000 7,894,182 8,033,772 8,033,772 8,162,690
City of Lee’s Summit Annual Budget FY16
Debt Service Fund 7,201,005 7,670,169 7,888,020 7,895,226 7,773,817 7,594,422 8,024,576 7,894,182 8,033,772 8,033,772 8,162,690
Percent
TOTAL
Change
22,860,533 24,379,465 25,076,435 25,028,708 25,303,738 26,258,798 28,157,263 32,945,500 33,042,242 33,018,621 33,632,467
22.8% 6.6% 2.9% -0.2% 1.1% 3.8% 7.2% 25.5% 0.3% -0.1% 1.9%
73 | P a g e
4: Revenue Projections
City of Lee’s Summit Annual Budget FY16
74 | P a g e
4: Revenue Projections
Sales Tax Account Codes:
Legal Authorization: State Statute :
Sections 94.500 to 94.550, 94.575-94.577 & 94.70094.705, and Chapter 144
City Ordinance :
1-7(2)
4020, 4021
Description: The City imposes a total sales tax of 2.25% on all goods and commodities sold within the City limits, and it is broken down into four funds as detailed below . Transportation and Park Development local sales taxes are not levied on utilities. The State of Missouri receives the tax from the respective business and distributes the funds monthly to the City. In an April 5, 2005 special election, the City voted to extend the Park Development Fund's local sales tax for a period of ten years beginning April 1, 2008 at a rate of one-quarter of one percent (1/4 of 1%). This rate was a .125% reduction from what was then the current rate. In an April 3, 2007 special election, the City also voted to extend the Capital Improvements sales tax for streets and related projects for a period of ten years from its pending expiration of March 31, 2008 with no rate change. Therefore, beginning April 1, 2008, the City's total sales tax rate was reduced from 2.375% to 2.25% due the reduction of .125% in the Park Development Fund.
Basis of Projection:
Financial Trend
FY15 budget estimated 1.5% growth on FY14 year to date actuals and includes new growth of $91k following a new grocery store development that is expected to be open in January.
$37,000,000
In FY15 Sales Tax Revenue grew approximately 10% from FY14 causing a significanct variance. FY16 estimates project a small 1.5% growth above FY15 amounts.
$33,000,000
$35,000,000
$31,000,000 $29,000,000
Sales tax is broken between four funds as follows:
$27,000,000 $25,000,000
General Fund Transportation Fund Capital Projects Local Park Development Fund
1.000% 0.500% 0.500% 0.250%
$23,000,000 $21,000,000 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
General Fund
Park Development Fund
11,912,066 12,395,589 12,293,604 11,988,325 12,807,628 13,313,301 13,133,037 14,149,200 14,142,595 15,068,377 15,354,713
City of Lee’s Summit Annual Budget FY16
4,283,737 4,091,315 2,957,206 2,862,358 3,056,886 3,169,317 3,094,709 3,321,232 3,362,797 3,362,797 3,661,528
Transportation Tax Fund 5,712,776 5,889,151 5,834,171 5,720,233 6,116,282 6,337,138 6,190,196 6,641,048 6,818,854 6,818,854 7,677,357
Capital Project Fund 5,954,905 6,196,483 5,995,944 5,991,814 6,402,173 6,655,532 6,565,125 7,073,186 7,032,029 7,032,029 7,677,357
Annual Percent
TOTAL
Change
27,863,484 28,572,538 27,080,925 26,562,730 28,382,969 29,475,288 28,983,067 31,184,666 31,356,275 32,282,057 34,370,955
6.7% 2.5% -5.2% -1.9% 6.9% 3.8% -1.7% 7.6% 0.6% 3.0% 6.5%
75 | P a g e
4: Revenue Projections
Utility Franchise Fees Electric, Natural Gas, Telephone, and Cable Account Codes:
Legal Authorization:
4040, 4041 4042, 4043
State Statute : Sections 94.110 - 94.120 City Ordinance : 28-90 through 28-97; 28-121 through 28-125; 28-150 through 28-153; 8-39 Description:
Electric: The City charges a license fee of 7% of the gross receipts derived from the sale of electric energy for domestic and commercial consumption within the City. The fee is collected by the utility company and remitted to the City the following month. Natural Gas: The City charges a license fee of 7% of the gross receipts derived from the sale of natural gas for domestic and commercial consumption in the City. The fee is collected by the utility company and remitted to the City the following month. Fees collected are highly dependent on weather conditions in the City. Wholesalers are also contracting with large volume users to purchase direct from the well fields avoiding the franchise fee. Cable: The City charges a license fee of 5% of the gross receipts derived on all service charges for customers subscribing to cable television service. The fee is assessed on regular monthly billing, and cable companies remit their fees on a quarterly basis to the City. Telephone: The City charges a license fee of 7% on the gross receipts derived from telecommunication services provided in the City. The fee is collected by the telecommunications companies and is then remitted to the City.
Basis of Projection & Analysis:
Financial Trend $18,000,000
In FY15 franchise tax revenue was budgeted close to the 3 year averages while factoring trend data. The lack of growth in franchise tax has prompted the City to conduct a franchise tax audit to determine if all tax revenue due is being remitted.
$16,000,000
In FY16 all categories of Franchise Tax were budgeted to decrease following change in demand, service price, customer choices, and milder weather.
$10,000,000
$14,000,000 $12,000,000
$8,000,000 $6,000,000 2007
2009
2011
2013
2015
2016
General Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
Electric 4,659,832 5,945,521 5,752,438 6,424,501 6,879,663 7,013,016 6,897,629 7,031,470 6,924,255 6,809,289 6,811,281
City of Lee’s Summit Annual Budget FY16
Natural Gas 2,458,654 2,729,717 2,775,436 2,445,981 2,670,556 1,918,302 2,195,122 2,308,681 2,194,766 2,222,766 2,331,670
Telephone 1,005,314 5,020,069 3,194,742 4,838,274 5,525,907 3,739,688 3,668,256 3,490,461 3,616,686 3,292,268 3,251,957
Cable 898,264 967,484 1,014,328 1,116,837 1,173,511 1,072,791 1,319,367 1,253,171 1,242,717 1,242,154 1,245,939
TOTAL 9,022,064 14,662,791 12,736,944 14,825,593 16,249,638 13,743,797 14,080,374 14,083,783 13,978,424 13,566,477 13,640,847
76 | P a g e
4: Revenue Projections
EATS -- Local Sales Tax Account Codes:
Legal Authorization: State Statute : Section 99.820, 99.845 City Ordinance :
4020, 4021
Description: For redevelopment projects approved by ordinance after August 31, 1991, fifty percent of the total additional revenue from taxes, penalties and interest which are imposed by the municipality or other taxing districts, and which are generated by economic activities within the area over a determined base amount, but excluding certain taxes, shall be allocated to, and paid to the municipality, who shall deposit such funds in a separate segregated account within a special allocation fund. Lee's Summit has seven active TIF redevelopment projects which are/will generate economic activity taxes (EATS): Summit Woods, Chapel Ridge, I-470 Business and Technology, Longview, Hartley Block, Todd George and 50 Highway and Summit Fair. In an April 5, 2005 special election, the City voted to extend the Park Development Fund's local sales tax for a period of ten years beginning April 1, 2008 at a rate of one-quarter of one percent (1/4 of 1%). This rate was a .125% reduction from what was then the current rate. In an April 3, 2007 special election, the City also voted to extend the Capital Improvements sales tax for streets and related projects for a period of ten years from its pending expiration of March 31, 2008 with no rate change. Therefore, beginning April 1, 2008, the City's total sales tax rate was reduced from 2.375% to 2.25% due the reduction of .125% in the Park Development Fund.
Basis of Projection & Analysis:
Financial Trend $3,700,000
EATs payments for a major shopping center ended in 2013. This amounts to an estimated $1 million reduction for general fund receipts. The same proportionate reduction was anticipated for the other funds. In FY15, a new retail/grocery store development is planned to open. The TIF district is expected to generate approximately $300k in new sales tax. This partial increase reflects the stores opening mid fiscal year.
$3,200,000 $2,700,000 $2,200,000 $1,700,000 $1,200,000
In FY15 Sales Tax Revenue grew approximately 10% from FY14 causing a significanct variance. FY16 estimates project a small 1.5% growth above FY15 amounts.
$700,000 $200,000 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
General Fund
Park Development Fund
Transportation Tax Fund
466,996 464,489 392,347 331,991 377,262 394,228 14,229 141,266 146,230 146,230 158,313
615,968 658,311 737,002 663,981 754,491 788,456 28,458 282,531 276,100 276,100 332,006
1,245,288 1,316,622 1,474,003 1,327,463 1,508,982 1,576,913 56,916 565,063 664,539 638,707 664,011
City of Lee’s Summit Annual Budget FY16
Capital Project Fund 622,644 658,311 658,488 663,981 754,491 788,456 28,458 282,531 292,457 292,457 332,006
Annual Percent
TOTAL 2,950,896 3,097,733 3,261,840 2,987,416 3,395,227 3,548,053 128,061 1,199,927 1,379,326 1,353,494 1,486,336
Change 8.5% 5.0% 5.3% -8.4% 13.7% 4.5% -96.4% 837.0% 15% -1.9% 9.8%
77 | P a g e
4: Revenue Projections
Payment in Lieu of Taxes (PILOT) Legal Authorization:
Account Code:
State Statute : Section 100.010 to 100.200, 353.030, and 99.800 to 99.865 City Ordinance : N/A
4006
Description: The City promotes economic development by utilizing several state authorized tax incentive mechanisms: 1. Chapter 100 - provides an incentive for new industries to locate in the area, as well as encourages companies already in the area to remain, by assisting them in improving their present facilities or in building new ones; ad valorem taxes on bond-financed property are abated, and negotiated PILOTs are made by the company to the City and each political subdivision. 2. Tax Increment Financing (TIF) - encourages development of blighted, substandard, or economically under-utilized areas that would not develop without public assistance; the PILOTs are made by property owners in the redevelopment area on the increase in current equalized assessed valuation of each such parcel, and such payments are deposited into the special allocation fund (SAF); payments to the SAF may be used to pay for the redevelopment project costs or to repay any obligations (i.e., bonds or promissory notes) issued by the municipality to pay for the redevelopment project costs.
Basis of Projection:
Financial Trend $9,000,000
Chapter 100 Bonds Summit Technology, BHA Technologies Inc., and Kokam America are reflected in the General Fund category below. The PILOTs are generated pursuant to the terms of Section 100.010 to 100.200, RSMo. The allocation of the PILOT for distribution to the City is based on the City's levy in effect when the Section 100 Bonds were issued.
$8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000
Tax Increment Financing Hartley's Block, I-470 Business Center, Summitwoods Crossing, Chapel Ridge, Longview, Northeast, Summit Fair, and Todd George/50 Highway TIF revenues are reflected in the Tax Increment Financing Funds category below. The PILOTs are generated pursuant to the terms of the Real Property Tax Increment Allocation Redevelopment Act.
$1,000,000 $0 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
General Fund 716,571 694,165 685,679 839,760 832,033 937,569 1,015,795 954,808 954,808 1,289,492 1,463,426
City of Lee’s Summit Annual Budget FY16
Special Revenue Funds
Tax Increment Financing Funds ------------
3,536,071 3,536,612 5,329,992 6,667,397 7,504,450 6,199,020 6,198,679 4,590,048 4,504,612 4,504,612 3,869,568
Annual Percent
TOTAL
Change
4,252,642 4,230,777 6,015,671 7,507,157 8,336,482 8,336,482 7,214,474 5,544,856 5,459,420 5,794,104 5,332,994
42.9% -0.5% 42.2% 24.8% 11.0% 0.0% -13.5% -23.1% -1.5% 6.1% -8.0%
78 | P a g e
4: Revenue Projections
State Motor Vehicle Taxes and Fees FUEL TAX, SALES TAX, & LICENSE/TRANSFER FEE Account Codes:
Legal Authorization: State Statute :
4009, 4010, 4011
Article IV ,Section 30(b); Article X, Section 144.069; Chapter 142, Section 150.150;144.069; 94.560 City Ordinance : N/A Description:
Vehicle Fuel Tax: This tax is the City share of the state tax on motor vehicle fuel. Distribution to the cities is based on the population of that city as of the last census count, which for Lee's Summit is 2000. Vehicle Fuel Tax funds must be used solely for "construction, reconstruction, maintenance, repair, policing, signing, lighting, cleaning of roads, and for the payment of principal and interest on indebtedness on account of road and street purposes and uses thereof". Vehicle Sales Tax: This tax is on the purchase price of a motor vehicle, trailers, boats and outboard motors. Sales tax rate is determined where the vehicle is titled. Vehicle License/Transfer Fee: This fee is the City share of the State of Missouri vehicle license and transfer fees assessed. Allocation is based on a city's population according to the last Federal decennial census. The Street Department operations budget was moved under the auspice of the General Fund in FY 1996. Funds derived from this revenue source are to used solely for "construction, reconstruction, maintenance, repair, policing, signing, lighting, cleaning of roads, and for the payment and interest on indebtedness on account of road and street purposes and uses thereof".
Basis of Projection:
Financial Trend $3,600,000
For FY14, motor vehicle tax receipts were projected to decrease 0.5% from FY13 projections. Late in FY12, the motor vehicle fuel tax increased due to the results of the new census data which determines the disbursement allocation to cities.
$3,400,000 $3,200,000 $3,000,000
For FY16 motor vehicle taxes were budgeted to meet 3 year average amounts.
$2,800,000 $2,600,000 $2,400,000 2007
2009
2011
2013
2015
2016
General Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
Vehicle Fuel Tax 2,048,184 2,047,266 1,956,477 1,970,976 1,980,610 2,170,623 2,306,425 2,330,205 2,275,968 2,341,391 2,363,720
City of Lee’s Summit Annual Budget FY16
Vehicle Sales Tax 558,169 454,303 371,754 385,201 420,857 500,104 574,002 683,598 576,141 643,747 649,918
Vehicle License/Transfer Fee 437,838 312,707 308,086 307,527 310,500 357,738 381,790 383,510 337,794 364,971 383,986
Annual Percent
TOTAL 3,044,191 2,814,276 2,636,317 2,663,704 2,711,968 3,028,465 3,262,217 3,397,313 3,189,903 3,350,109 3,397,624
Change 3.5% -7.6% -6.3% 1.0% 1.8% 11.7% 7.7% 4.1% -6.1% 5.0% 6.5%
79 | P a g e
4: Revenue Projections
Interest on Investments Account Codes:
Legal Authorization: Chapter 67 State Statute : City Ordinance : see the City's Investment Policy
4600, 4601, 4602, 4603, 4604
Description: The City maintains a cash and investment pool which is available to all funds. These funds are combined and managed by the City's Cash Management Officer. Investments in the pooled cash fund include United States Treasury Bills and Notes and non-callable U. S. Agency offerings and are carried at cost, which approximates market value. Interest income is distributed by percentage, to the various funds on a monthly basis in accordance with the fund's cash balance. Current portfolio maturities extend to a maximum of three (3) years. New investments are usually made at the maximum three (3) year maturity.
Basis of Projection & Analysis:
Financial Trend $9,000,000
Projections are based on average cash balances multiplied by the average percentage yield. An interest rate of 1.25% for the 2011 budget and 1% for the 2012 budget. For FY16 an interest rate of 0.25% was assumed.
$8,000,000 $7,000,000 $6,000,000 $5,000,000
The graph to the right clearly illustrates the reduced return available on investments over the past year.
$4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
General Fund
Special Revenue, Debt Service & Capital Project Funds
1,325,004 947,237 658,156 183,497 281,152 90,664 152,052 90,664 90,664 79,405 --
City of Lee’s Summit Annual Budget FY16
3,816,990 3,129,419 1,820,754 245,393 646,426 485,765 544,765 34,764 34,764 178,301 392,483
Enterprise Funds 2,588,566 2,709,663 1,401,400 145,272 325,226 92,118 125,239 38,500 38,500 63,931 83,681
Internal Service Funds 610,667 612,772 296,883 15,160 57,123 34,994 68,111 56,593 56,593 41,119 28,087
TOTAL 8,341,227 7,399,091 4,177,193 589,322 1,309,927 703,541 890,167 220,521 220,521 362,756 504,251
80 | P a g e
4: Revenue Projections
CONTRIBUTIONS - FEDERAL Legal Authorization:
Account Code:
State Statute : N/A City Ordinance : N/A
4303
Description: Grant monies originating with the Federal Government, whether received directly from the Federal Government or indirectly from the State of Missouri, are recorded in this account. Federal Transportation funds (used for improving major roadways), Federal Airport Block Grants, Community Development Block Grants (CDBG), Highway Safety Grants, High Intensity Drug Trafficking Activity (HIDTA) funds, Federal Emergency Management Agency (FEMA) funds and Violence Against Women Act (VAWA) funds are recorded in this account.
Basis of Projection:
Financial Trend $16,000,000
Grants from the Federal Government for FY14 included primarily $4 million for airport improvements, $4 million for road improvements, $301 thousand for CDBG, and $101 thousand for VAWA. In FY16, the City's general fund is expected to receive funding for D.A.R.E and reimbursement for FBI Police training activies. In addition, the City will again apply for a Violence Against Women Grant (VAWA) which is a federal program designed to reduce violence.
$14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2007
2009
2011
2013
2015
2016
Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
Special Revenue Funds
General Fund
$
177,016 164,403 95,963 152,952 222,895 129,624 183,576 122,004 126,614 126,614 380,454
City of Lee’s Summit Annual Budget FY16
$
494,369 660,738 392,592 326,168 194,792 386,146 390,021 376,666 506,462 506,462 304,334
Capital Project Funds
Proprietary Funds
$
9,653,004 1,739,725 4,353,384 1,982,042 311,929 701,484 6,052,000 4,000,000 4,000,000 3,676,000 3,306,825
$
3,748,385 2,496,782 -----4,738,000 4,738,000 -533,537
TOTAL 14,072,774 5,061,648 4,841,939 2,461,162 729,616 1,217,254 6,625,597 9,236,670 9,371,076 4,309,076 $ 4,525,150
81 | P a g e
4: Revenue Projections
Water Sales/ Sewer Charges Account Codes:
Legal Authorization:
4448, 4450
N/A State Statute : City Ordinance : 32.101, 32.313; see also the City's Schedule of Fees Description and Basis of Projection:
The Water Utilities Department serves over 35,000 customers. The total available water supply of 32.5 million gallons per day (MGD) includes 25 MGD from Kansas City, Missouri and 7.5 MGD from Independence, Missouri. Water consumption and sewer revenue projections are based on five-year consumption averages of customers. Customer data is collected by meter size, consumption volume and customer type and input within the Utilities' cost of service model to forecast revenue requirements. The model projects the necessary revenues to meet projected operational and capital expenses. A five-year projected rate schedule based on the revenue requirements is annually reviewed and adjusted as necessary. Monthly Water Base Rates (Effective January 1, 2015): Meter Size Water Base Meter Size Water Base (Inches) Charge (Inches) Charge 5/8" $8.58 3" $17.63 3/4" $8.58 4" $38.47 1" $9.61 6" $59.31 1 1/2" $10.34 8" $88.16 2" $12.97 10" $214.37 Water Volume Rates (Effective January 1, 2015): Commercial Rate $4.32 per 1,000 gallons Residential Rates for the first 7,000 gallons 7,001 to 15,000 gallons Over 15,000 gallons
$3.68 per 1,000 gallons $4.32 per 1,000 gallons $5.41 per 1,000 gallons
Financial Trend $18,000,000 $17,000,000 $16,000,000 $15,000,000 $14,000,000 $13,000,000 $12,000,000 $11,000,000
Water Sales
$10,000,000
Sewer Charges
$9,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016
Monthly Sewer Base Rates (Effective January 1, 2015): Meter Size Water Base Meter Size Water Base (Inches) Charge (Inches) Charge 5/8" $12.35 3" $21.60 3/4" $12.35 4" $27.78 1" $18.53 6" $37.05 1 1/2" $19.04 8" $46.30 2" $20.07 10" $56.59 Sewer Volume Rates (Effective January 1, 2015): All Usage $4.74 per 1,000 gallons
Water/Sewer Fund Category Collection/ Distribution Year 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Budget 2015 Projected 2016 Budget
Water Sales 12,631,190 12,419,624 11,401,342 10,772,114 11,626,441 13,577,053 15,413,579 16,183,498 16,092,238 15,464,863 17,228,663
City of Lee’s Summit Annual Budget FY16
Sewer Charges
TOTAL
13,193,123 13,297,125 13,321,285 13,248,819 13,632,552 13,876,449 13,951,872 15,030,363 15,596,597 15,643,683 16,531,995
25,824,313 25,716,749 24,722,627 24,020,933 25,258,994 27,453,502 29,365,451 29,325,742 30,622,557 31,688,835 33,760,658
82 | P a g e
5: General Fund Overview General
General Fund . The General Fund is the general operating fund of the City. Expenditures from this fund provide the basic city services, such as police and fire protection. It also funds the following departments and the services they provide: Administration, Codes Administration, Finance, Law, Municipal Court, Planning & Development, and Public Works. The General Fund is categorized as a governmental fund type. The major revenue sources of this fund are property taxes, retail sales taxes, and utility franchise taxes. The remaining revenues are derived from the various user fees and other sources. A key element of the budget process is projecting the fund’s ending reserve balance. Total expenditures for the upcoming fiscal year are set based on projected revenues for the coming year and to ensure fund reserves will remain at the level set by policy. Fund balance reserves represent the unappropriated accumulation of the difference between actual revenues and expenditures. The source and timing of revenues dictates the level of fund balance necessary to avoid cash shortages in normal day to day operations. The City recognizes the need to establish and maintain adequate reserves to avoid any disruption in service level caused by either a downturn in a significant revenue item or one that is only received at a particular time such as property taxes in December. Accordingly, the City Council adopted an ordinance that requires 16.67%, or an amount equal to two months of expenditures. The City utilizes Generally Accepted Accounting Practice (GAAP) based budgeting for the General Fund. This requires that the modified accrual method of accounting is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). “Measurable” means the amount of the transaction can be determined, and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of current period. Revenues susceptible to accrual are property taxes, franchise taxes and interest revenue. Sales taxes collected and held by the state at year-end on behalf of the City also are recognized as revenue. User charges, fines, licenses, permits and miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash.
City of Lee’s Summit Annual Budget FY16
84 | P a g e
5: General Fund Overview General
GENERAL FUND BUDGET SUMMARY YEAR BEGINNING JULY 1, 2015
REVENUES: Taxes Licenses, Permits & Fees Fines & Forfeitures Interest Intergovernmental Revenues Charges for Services Other Operating Transfers In Total Revenues
$
$
EXPENDITURES: Personal Services* Supplies Contractual Services Maintenance & Repair Utilities and Fuel Capital Outlay Operating Transfers Out Interest Expense & Depreciation Other** Total Expenditures
$
$
Excess of Revenues Over (Under) Expenditures
FY 2011 ACTUAL
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
47,877,351 $ 1,264,778 1,388,711 281,152 1,015,201 3,310,231 2,998,211 130,404 58,266,039 $
45,669,127 $ 1,328,522 1,534,265 90,684 823,492 3,605,332 1,617,830 2,502,778 57,172,030 $
48,879,612 $ 1,511,860 1,607,096 18,009 860,763 3,688,257 1,383,657 1,753,912 59,703,166 $
49,528,302 $ 1,757,827 1,323,205 68,363 791,849 3,648,402 1,775,778 2,054,720 60,948,446 $
48,887,960 $ 1,568,441 1,328,566 79,405 755,470 3,633,578 1,664,410 1,066,302 58,984,132 $
49,898,846 $ 1,783,118 1,516,821 79,405 755,470 3,617,580 1,664,410 1,066,302 60,381,952 $
50,830,925 1,655,673 1,532,144 0 979,021 3,566,230 1,557,065 1,066,302 61,187,360
39,339,860 $ 2,087,184 7,975,289 4,284,832 2,295,985 95,887 1,500,638 0 15,841,078 73,420,753 $
39,730,876 $ 188,703 7,309,274 6,084,971 2,211,768 42,851 868,173 0 0 56,436,616 $
41,034,802 $ 147,573 7,323,030 6,271,365 2,294,753 132,025 539,522 7 51,232 57,794,309 $
41,530,341 $ 134,503 6,631,325 6,360,632 2,337,854 461 1,475,167 0 56,638 58,526,921 $
42,460,090 $ 137,980 7,923,079 6,714,884 2,416,546 0 663,668 0 129,680 60,445,927 $
41,875,897 $ 137,980 7,794,541 6,731,043 2,410,073 0 663,668 0 111,315 59,724,517 $
42,372,284 141,000 8,237,357 6,862,779 2,403,981 0 1,020,014 0 148,390 61,185,805
(15,154,714)
735,414
1,908,857
BUDGET
2,421,525
FY 2015 PRELIMINARY YE
(1,461,795)
FY 2016 Requested
657,435
1,555
Fund Balance, Beginning of Year
$
27,326,465 $
12,171,751 $
12,907,165 $
14,816,022 $
17,237,547 $
17,237,547 $
17,894,982
Fund Balance, End of Year
$
12,171,751 $
12,907,165 $
14,816,022 $
17,237,547 $
15,775,752 $
17,894,982 $
17,896,537
Net Unrestricted Fund Balance
12,171,751
12,907,165
14,816,022
17,237,547
15,775,752
17,894,982
17,896,537
Percentage of Expenditures (including transfers)
16.6%
22.9%
25.6%
29.5%
26.1%
30.0%
29.2% Revenue Expenditures Fund Balance
REVENUES, EXPENDITURES & FUND BALANCE $75,000,000 $65,000,000 $55,000,000 $45,000,000 $35,000,000 $25,000,000 $15,000,000 $5,000,000 ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014 FISCAL YEAR
BUDGET FY 2015
PRELIMINARY YE
Requested FY 2016
** This summary reflects budget amendments and the accural of a one-time legal settlement payment of $15.5M in FY11. The payment occurred after the FY12 budget adoption and is therefore not reflected in all tables and graphs in this document unless specifically stated.
City of Lee’s Summit Annual Budget FY16
85 | P a g e
5: General Fund Overview General
General Fund Revenues by Source 6%
Property Taxes
2%
Sales Taxes Franchise Taxes
31% 6%
Motor Vehicle Taxes Other Taxes Fines & Forfeitures Licenses & Permits Intergovernmental
22%
Charges for Services Investment Earnings
24%
Other Transfers In
Account Property Taxes Sales Taxes Franchise Taxes Motor Vehicle Taxes Other Taxes Fines & Forfeitures Licenses & Permits Intergovernmental Charges for Services Investment Earnings Other Transfers In Total
FY15 Budget 17,929,506 13,478,056 13,978,424 3,189,933 312,041 1,328,566 1,568,441 755,470 3,633,578 79,405 1,664,410 1,066,302 58,984,132
FY15 FY16 Change from FY15 Budget Change from FY15 Projected Projected Requested $ % $ % 18,240,569 18,770,513 841,007 4.7% 529,944 2.8% 14,429,670 14,690,702 1,212,646 9.0% 261,032 1.8% 13,566,457 13,640,847 -337,577 -2.4% 74,390 0.5% 3,350,109 3,397,624 207,691 6.5% 47,515 1.4% 312,041 331,239 19,198 6.2% 19,198 5.8% 1,516,821 1,532,144 203,578 15.3% 15,323 1.0% 1,783,118 1,655,673 87,232 5.6% -127,445 -7.7% 755,470 979,021 223,551 29.6% 223,551 22.8% 3,617,580 3,566,230 -1.9% -51,350 -1.4% -67,348 79,405 0 -79,405 -100.0% -79,405 1,664,410 1,557,065 -107,345 -6.4% -107,345 -6.9% 1,066,302 1,066,302 0 0.0% 0 0.0% 60,381,952 61,187,360 2,203,228 3.7% 805,408 1.3%
Summary of Significant Assumptions and Changes for FY16 • • •
Significant increase in sales tax from previous year (budget), FY16 sales tax revenue is expected to grow 1.5% above the projected year end of FY15 Marginal growth in Franchise Tax revenue is expected in FY16. Amounts were budgeted to total near the three year average for each category. FY16 Property Tax amounts assume new growth of 300 homes and an inflationary adjustment of .5% in assessed value
City of Lee’s Summit Annual Budget FY16
86 | P a g e
5: General Fund Overview General
General Fund Expenditures by Department Administration 5% 2%
PW Engineering
7% 5%
11%
Police Fire Finance Law
10%
32%
Planning & Codes Court PW Operations
25%
Codes Development Center Planning & Neighborhood Srvcs
General Fund Departments FY15 FY16 Department Change from FY15 Budget Budget Requested $ % Administration 3,609,723 3,951,437 341,714 9.5% PW Engineering 3,842,083 3,337,049 -505,034 -13.1% Police 19,245,826 19,738,636 492,810 2.6% Fire 15,543,898 15,114,975 -428,923 -2.8% Finance 6,092,469 6,395,253 302,784 5.0% Law 1,258,971 1,219,257 -39,714 -3.2% Planning & Codes 795,735 0 -795,735 -100.0% Court 800,607 809,800 9,193 1.1% PW Operations 7,079,262 6,769,131 -310,131 -4.4% Codes 1,198,238 0 -1,198,238 -100.0% Development Center 979,114 2,887,583 1,908,469 194.9% 0 962,684 962,684 Planning & Neighborhood Srv Total 60,445,926 61,185,805 739,879 1.2%
Summary of Significant Assumptions and Changes • • • •
An average 2% performance based merit adjustment at approximately $700k Reorganization of Development and Communications functions (on hold) but still budgeted End of a Voluntary Retirement Maximization Program (VRMP) at $700k An increase of 10%, or approximately $400k, for health insurance costs beginning at midyear (January 1, 2016)
City of Lee’s Summit Annual Budget FY16
87 | P a g e
GeneralFund Overview 5: General
General Fund Expenditures by Type Personal Services
9%
Supplies for Resale 3% 2%
Other Supplies/Services Repairs & Maintenance Utilities
14%
Fuel & Lubricants Miscellaneous 69%
Capital Outlay Interdepartmental Charges Transfers
Account Personal Services Supplies for Resale Other Supplies/Services Repairs & Maintenance Utilities Fuel & Lubricants Miscellaneous Capital Outlay Interdepartmental Charges Transfers Total
FY15 Budget 42,460,090 137,980 7,923,079 1,301,073 1,723,693 692,853 129,680 0 5,413,811 663,668 60,445,927
City of Lee’s Summit Annual Budget FY16
FY16 Change from FY15 Budget $ % Requested 42,372,284 -87,806 -0.2% 141,000 3,020 2.2% 8,237,357 314,278 4.0% 1,383,654 82,581 6.3% 1,707,842 -15,851 -0.9% 696,139 3,286 0.5% 148,390 18,710 14.4% 0 0 n/a 5,479,125 65,314 1.2% 1,020,014 356,346 53.7% 61,185,805 739,878 1.2%
88 | P a g e
GeneralFund Overview 5: General
General Fund Full Time Equivalents Workforce, or employee counts, is described as a ratio of full time equivalents (FTE) where one full time employee is estimated to work 2,080 hours annually or 2,912 for certain fire department personnel. FY14 Budget
Department Administration Pub. Wks./Engineering Law Enforcement Fire/Ems Services Finance Legal Services Planning Municipal Court PW Operations Division Codes Administration Revenue Development Center Planning & Neighborhood Srvcs Total
FY15 Budget
27.01 38.65 204 146 21 10.5 9.91 11.5 46.67 16 0 0 0 531.24
26.31 38.9 204 144 21 11.5 8.37 12.5 41.34 13.35 0 7.47 0 528.74
FY16 Budget 5% 7%
2%
FY16 Budget 27.39 33.8 202 144 22 10.25 0 11.29 38 0 0 27.68 9.7 526.11
Change from FY15 # % 1.08 4.1% -5.1 -13.1% -2 -1.0% 0 0.0% 1 4.8% -1.25 -10.9% -8.37 -100.0% -1.21 -9.7% -3.34 -8.1% -13.35 -100.0% 0 20.21 270.5% 9.7 -2.63 -0.5%
Administration Pub. Wks./Engineering
5%
Law Enforcement
7%
Fire/Ems Services
2% 2%
Finance
4%
Legal Services Planning Municipal Court 39% 27%
PW Operations Division Codes Administration Revenue Development Center
City of Lee’s Summit Annual Budget FY16
89 | P a g e
GeneralFund Overview 5: General
Personnel Changes FY16 Personnel Changes Reclassified Positions: Current Position Title: New Position Title: Assistant to the City Manager Management Analyst Assistant City Manager - Internal Services Assistant City Manager - Operations Assistant City Manager - Development Assistant City Manager - Dev & Comm Economic Development Communication Officer City Communications Officer Public Communications Coordinator Communications Director Office Manager/Executive Assistant Executive Assistant - City Manager Secretary to Mayor and City Council Executive Assistant - Mayor and City Council Manager of Building Inspections Field Services Manager Building Inspector Field Building Inspector Public Works Inspector Field Engineering Inspector Building Inspector Senior Field Building Inspector Senior Staff Engineer Engineering Technician Field Supervisor Street Operations Supervisor (4 positions) Manager of Streets Public Works Operations Manager Operations Superintendent Assistant Director of Public Works Operations Assistant City Attorney II Chief of Litigation Assistant City Attorney/Risk Mgr Chief Counsel of Management & Operations Deputy City Attorney Staff Attorney Media Service Supervisor Media Service Supervisor Jr. Systems Administrator Technical Services Specialist FY16 New or Additional FTE's: Public Engagement Specialist Director of Administration Assistant Development Center Director Permit Technician Water Utilities Management Analyst (Water Utilities) FY16 Eliminated Positions: Deputy City Manager Organizational Development Director Supervisory Engineer Total Net Increase/(Decrease) Total Net Increase/(Decrease) General Fund * Includes Salary and Benefit costs
*Net Impact: $ (12,334) $ $ $ $ 10,202 $ (8,759) $ 2,692 $ $ $ $ $ (39,000) $ 21,563 $ 7,112 $ 22,123 $ 6,522 6,105 $ $ (24,976) $ 10,841 $ (4,661) $ $ $ $ $
79,086 122,033 107,185 71,353 63,691
$ (163,840) $ (133,535) $ (112,120) $ 31,283 $ (27,747)
Summary of Significant Assumptions and Changes • • • •
The highlighted positions affected by the proposed reorganization will not be implemented without first hiring the Assistant City Manager of Development and Communications and further discussion with the City Council 3 positions were eliminated from the FY16 Budget Approximately 60 employees are eligible for retirement benefits Cash liability to pay out unused vacation and sick time totals approximately $1.6m
City of Lee’s Summit Annual Budget FY16
90 | P a g e
GeneralFund Overview 5: General
General Fund Budget Reductions In FY15 the City Manager introduced a 2 year plan to correct a structural deficit that threatened the City’s positive financial condition. The 2 year plan, as outlined, sought to incrementally correct this issue while minimizing the impact of service reductions to our citizens. Planning for these reductions over a two year period allowed the City Council and staff to make needed investments to help offset the need for reductions in future years. Conservative spending and revenue growth in FY15 eliminated the need to make significant reductions that would change the level of services provided to the residents however reductions were still pursued.
Impact of General Fund budget reductions City Manager's Proposed Budget with Recommendations General Fund 2 Year Plan
Operating Budget Beginning Projected Revenues: Beginning Projected Expenses:
FY15 Request 58,924,132 60,554,901
FY16 Projected 59,493,559 61,854,542
1. 2. 3. 4. 5.
Revenue Enhancement Proposals: 60,000 Recover CDBG Admin Expenses: 0 Summit Place revenues: 0 Inflationary Increase Property Tax Inflationary Increase Sales Tax 0 0 Use Tax 60,000 Sum:
60,000 75,000 268,943 202,171 300,000 906,113
1. 2. 3. 4. 5.
Expenditure Additions: 0 Lifepack replacement 126,000 Community Marketing Program 200,000 Economic Development Program Implementation of Compensation Study 83,807 137,530 ITS Projects Sum: 547,337
180,000 125,000 200,000 0 200,000 705,000
Significant Expenditure Reduction Proposals: 1. Support to Boards & Commissions -35,350 2. Support to Public Service Agencies -48,000 3. Reduce operating time for streetlights 0 4. Find alternative funding for Legacy Blast 0 5. Contract for concrete repairs -199,655 6. Health Insurance Cost Control Measures -564,171 0 7. Personal Services Cost Reduction -23,300 8. Reduce City Scope from 4 to 2 9. Reduce funding for Holiday Party -2,000 10. Eliminate Legislative Services -6,000 11. Extend life of Patrol Vehicles -70,786 12. Public Safety Education Programs -7,000 -346,772 13. Adjustment from 2% to 1% merit pool Sum: -1,303,034
-35,350 -62,000 -93,000 -24,000 -199,655 -103,958 -1,532,820 -23,300 -2,000 -6,000 -70,786 -7,000 -2,159,869
Operating Budget (with proposals) Total Revenues Total Expenses Net Income:
58,984,132 59,799,204 -815,072
Reserve (Fund Balance) Spending Proposals: 1. Retirement Maximization Program Expense 700,000 Sum: 700,000
60,399,673 60,399,672 0
0 0
Total Proposed Total Revenues
58,984,132
60,399,673
Total Expenses (with one-time) Net Income:
60,499,204 -1,515,072
60,399,672 0
City of Lee’s Summit Annual Budget FY16
91 | P a g e
GeneralFund Overview 5: General
General Fund Reserve Balance During the budget process, the General Fund reserve balance is projected for five fiscal years out from the budget year to evaluate the long term impact of current budget and spending decisions. The projections are very fluid, particularly during the budget process and new information becomes available and various assumptions and budget levels are evaluated. The table below reflects the five year projections used during the FY16 budget process containing the information available at that time.
General Fund Year End Balance $30,000,000 16.67% of GF Exp
$25,000,000 20% of Exp
$20,000,000 $15,000,000 $10,000,000 $5,000,000
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY15 FY16 FY17 FY18 FY19 FY18
Fiscal Year
Projected
*Note*: FY15 Actuals are preliminary, unaudited, year end amounts. This table was updated after the ‘Review of Funds’
Until recently, General Fund revenues exceeded expenditures, as depicted in the following graph. The City Manager, Management Team, and staff have been working over the last few years to make the necessary structural adjustment to correct future defecits. Beginning in FY14 and continuing through FY16 with the City Manager’s two year plan, the City will reduce expenditures to levels that can be funded with reoccuring revenues. This will require reductions in personnel expenses and service expenditures. In FY16, the projected reductions amounts total approximately $2.1m with $1.5m of reductions coming from salaries, health insurance, overtime, and benefit costs.
City of Lee’s Summit Annual Budget FY16
92 | P a g e
GeneralFund Overview 5: General
General Fund Reserve Balance Policy In FY14 the City Council adopted a new fund balance policy. The adequacy of unrestricted fund balance in the general fund should be assessed based upon a government’s specific circumstances. The Government Finance Officers Association recommends, at a minimum, that general-purpose governments, regardless of size, incorporate in its financial policies that unrestricted fund balance in their general fund be no less than two average months of regular general fund operating revenues or regular general fund operating expenditures. If fund balance falls below the policy level it should be replenished within the subsequent year or in the case of an extraordinary expenditure three years.
City of Lee’s Summit Annual Budget FY16
93 | P a g e
6: General Fund Department Budgets General
ADMINISTRATION Administration provides the general supervision and support for all departments within the City and also serves as the link between the elected governing body and the staff of the City’s departments. Administration oversees four internal service divisions whose primary function is to provide support for all City departments. Internal Service Divisions falling under the auspices of the City Manager's Office includes Information Technology Services, Fleet Operations, Central Building Services and Human Resources. Another significant capacity fulfilled by Administration is to provide support to the Mayor, City Council and various City committees. These committees are comprised primarily of a diverse set of volunteer citizens who perform a compelling service to City operations. Among other support activities, Administration provides public communication, research, analysis and recommendations on policy and service matters for the elected officials and the City committees. HUMAN RESOURCES The Human Resources Division reports to the City Manager and operates as an internal service agent for all City departments and employees. Its primary function is to administer and oversee all personnel and employee service programs including recruitment and hiring, performance management, labor relations, employee benefit programs, payroll, training and development, safety, workers compensation and risk management efforts.
City of Lee’s Summit Annual Budget FY16
95 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
96 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
97 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
98 | P a g e
GeneralFund Department Budgets 6: General
MUNICIPAL COURT
The Lee’s Summit Municipal Court is a division of the Jackson County Circuit Court. The municipal court maintains all files and papers necessary to schedule and conduct trials, pleas, pre-trial hearings, sentencing, probation revocation hearings, and pre- and post-trial motions related to violations of city ordinances. The administrative and clerical staff, bailiff and judges administer the process of adjudicating matters under the Court's jurisdiction. The efforts of all are directed toward the goals of the fair and efficient administration of justice, to dispense equal justice to all, to provide courteous and respectful service to the public and to encourage respect for the rule of law. The Lee's Summit Municipal Court consists of two elected Judges, Court Administrator, two Probation Officers, Court Security Officer, Accounting Technician, Record Management Clerk, Warrant Clerk, Bond Clerk, two Deputy Court Clerks. Cases are scheduled for the first four Wednesdays and Thursdays of each month beginning at 8:30 a.m., with a final docket held at 3:00 p.m. Presiding Judge James M. Tobin presides over Division 263 on Thursdays, and Judge Dana M. Altieri presides over Division 243 on Wednesdays. Special dockets are devoted to animal control cases, domestic violence cases, nuisance cases and zoning matters from the Neighborhood Services Division. An 9:00 a.m. prisoner arraignment docket is held on Tuesday of any week lacking a court docket. If the individual charged with the offense pleads guilty, a fine, imprisonment or probation may be assessed. If the defendant pleads not guilty, a bench trial is conducted. The defendant may appeal a finding of guilty to the Jackson County Associate Circuit Court. In addition, the Court operates a Violations Bureau which permits individuals charged with certain traffic and other violations to pay a fine without appearing before the Judge.
City of Lee’s Summit Annual Budget FY16
99 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
100 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
101 | P a g e
GeneralFund Department Budgets 6: General DEVELOPMENT CENTER DEPARTMENT The Development Center Department is comprised of the an Administration Division, Business and Contractor Licensing Division, a Project Management Division, an Inspection Division, and a Review Division. Each division has a distinct part of assisting customers in successfully navigating each step of the City’s business and development related processes from pre-application to occupancy (start to finish). The Administration Division provides administrative functions for the department and also provides staff support to the Land Clearance for Redevelopment Authority (LCRA), Lee’s Summit Missouri Municipal Building Authority (LSMMBA), Board of Appeals, as well as other economic development related boards and committees. The Business and Contractor Licensing Division assists customers through the business and contractor licensing processes. The Project Management Division consists of project managers that facilitate the “one stop shop” approach working alongside applicants to navigate and manage the business and development related processes. The Inspection Division is comprised of two groups: Building and Safety Inspection and Development Inspection. The Building and Safety Inspection group ensures the actual construction of the project complies with adopted building codes and approved construction documents through the performance of required inspections during various stages of the project. The Development Inspection group inspects all developer-constructed infrastructures for compliance with City codes and makes recommendations for acceptance of the facilities as public. The Review Division is comprised of three groups: Engineering Review, Planning Review and Plan Review/Permit Review. The Engineering Review group provides the engineering services needed to support quality growth and development in the community. It provides review of residential development plans for infrastructure (sanitary sewers, water mains, storm water systems, streets, and traffic controls) sufficiency, serviceability, compatibility, and integration with existing facilities. The Planning Review group provides support to the development community through administration of the Comprehensive Plan, special corridor planning studies, mapping, subdivision plat review, home occupations, variances, zoning approvals, and annual department report. The Plan Review/Permit Review division assists during the conceptual and planning stages of a project and reviews all construction documents to ensure code compliance prior to permit approval and issuance of building permits. The Development Center Department is dedicated to working collaboratively with stakeholders to effectively align resources for successful outcomes through a customer focused approach. The mission of the Development Center Department is “Because Lee’s Summit means business, we’ve enthusiastically created a “one stop shop” for our customers to quickly navigate each step of the business and development process from start to finish. Our Development Center staff is passionate and dedicated to make good things happen for all of those doing business in Lee’s Summit.” The department provides staff support for the Planning Commission, City Council, Board of Adjustments, Historic Preservation Commission, Community and Economic Development Committee, Community Development Block Grant Committee as well as ad hoc Committees appointed by the City Council or Planning Commission. The department also provides information to the general public, including realtors, appraisers, developers, contractors, citizens and others, regarding general and specific land use issues. In addition to coordinating customers’ needs with internal City departments, Development Center Department staff work closely with the City’s local partners in promoting business and economic development. Partner organizations include the Lee’s Summit Chamber of Commerce, the Lee’s Summit Economic Development Council, Downtown Lee’s Summit Main Street, Inc., and Boost Lee’s Summit.
City of Lee’s Summit Annual Budget FY16
102 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
103 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
104 | P a g e
GeneralFund Department Budgets 6: General FINANCE The Finance Department is responsible for all cash receipts and disbursements and maintenance of an internal control structure that adequately safeguards the assets of the City. Finance also oversees the auditing, procurement, and reporting functions of the City. The department’s expenditures are allocated between five programs. Those programs are Departmental Administration, Budget and Accounting Services, Debt and Cash Management, Procurement, and Support to Development. All Finance department programs are classified in and charged directly to the General Fund. The Departmental Administration program’s primary function is to account for general and administrative expenditures necessary to operate the department. These charges are common to all divisions and not directly associated with any particular one, i.e. Information Technology Systems and Central Building Services overhead and replacement allocations. The Budget and Accounting Services program involves the traditional processing of all of the City's invoices for goods and services and recording all related general ledger transactions in order to prepare financial statements in conformity with Generally Accepted Accounting Principles. This program is also responsible for establishing and maintaining an internal control structure and procuring the independent financial audit each fiscal year. The objectives of an internal control structure are to provide management with reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition. The Debt and Cash Management Program is responsible for establishing proper internal controls for the collection and distribution of revenue for the 70 active funds. In addition, this program oversees the City's outstanding and active debt issues approximating $74.3 million and maintains the City’s investment portfolio averaging $100 million according to the City investment policy and cash management procedures. Procurement and Contract Services provides semi-centralized procurement of goods and services. The division is responsible for obtaining commodities and services at the most economical prices while ensuring compliance with all applicable laws and policies. It also directs the procurement of professional services, heavy equipment, small construction, vehicles and other goods and services. Lastly, the division establishes contracts to provide an immediate and uninterrupted source of supplies for frequently used items and is responsible for the disposal of surplus property. The Support to Development program accounts for finance related expenditures attributed to economic development and any associated tax incentive programs.
City of Lee’s Summit Annual Budget FY16
105 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
106 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
107 | P a g e
GeneralFund Department Budgets 6: General
FIRE DEPARTMENT The Fire Department provides services to the community in the areas of fire protection, emergency medical services, rescue services, hazardous materials, and emergency management. The organization is assigned most emergency service functions of the city other than law enforcement. Contract emergency services are also provided for Greenwood and Unity Village. The Emergency Services Program of the department includes fire suppression, emergency medical services, rescue responses, hazardous materials mitigation, and the response and management of citywide emergencies and disasters. The department provides the emergency services from seven strategically located fire stations. Fire suppression services are rendered from seven staffed pieces of fire apparatus. This includes five pumping engines which are Compressed Air Foam System (CAFS) and two combination engine/ladder trucks. All frontline fire apparatus are equipped with thermal imaging cameras, carbon monoxide detectors and vehicle extrication equipment. All sworn personnel are state-licensed emergency medical technicians or paramedics providing emergency medical service. The department equips all fire apparatus with emergency medical supplies and operates five paramedic-staffed rescue ambulances. Specialized rescue services include the areas of high angle, fast water rescue, trench cave-in, automobile extrication, and confined space. All fire fighters are trained as hazardous materials first responders, and the department operates an advanced hazardous materials response team. The fire department serves as the coordinator for the city in managing citywide emergencies and disasters. The Prevention Program of the department provides for loss reduction activities in all mission areas. This includes fire prevention, hazardous materials prevention, and general safety awareness and education. The Prevention Program is designed to reduce the loss of life, injuries and property damage from fire, hazardous materials incidents, and/or man-made and natural disasters. The department operates a regional fire and emergency medical service communications center. In addition to serving as the focus for all city communications other than police, the center provides contract services for the Lake Lotawana, Lone Jack, Fort Osage, Sni Valley, West Peculiar, Western Cass Fire, Prairie Township, and Pleasant Hill Fire Protection Districts.
City of Lee’s Summit Annual Budget FY16
108 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
109 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
110 | P a g e
GeneralFund Department Budgets 6: General
LAW DEPARTMENT The Law Department is divided into two divisions: Civil and Prosecution. By the City Charter, the City Attorney supervises and directs the Law Department. Civil Division: Division personnel consist of the City Attorney, one Deputy City Attorney, one Assistant City Attorney II, one Assistant City Attorney I/Risk Manager, one Police Legal Advisor, one Office Coordinator II, and a Legal Secretary. The Civil Division provides legal advice and counsel to the Mayor, City Council, appointed officials, and City staff on the full range of legal issues which confront the City of Lee's Summit. The City Attorney or his/her designee attends all City Council meetings and other board and committee meetings as necessary or upon request to provide legal guidance. In addition, the Civil Division attorneys regularly:
confer and work with the City Manager, Department Directors and City staff to develop strategies for resolving legal issues; respond to lawsuits against the City; review and approve contracts and other legal documents prior to consideration by the City Council; draft ordinances, contracts, resolutions, conveyances and other legal documents; monitor and coordinate all litigation files with outside legal counsel; research, prepare memoranda and provide advice on various legal issues such as economic development, employment, real estate, environmental, procurement, contract compliance, planning and zoning, open records and meetings, local government liability and numerous constitutional matters; review current case law and legislative enactments to evaluate potential impact on the City; and Work with City departments to collect on past due accounts.
Prosecution Division: Division personnel consist of one full-time Prosecutor, one part-time Prosecutor and two Paralegals. The Prosecution Division is responsible for prosecuting city ordinance violations in the City's Municipal Court and trials de novo, appeals, and jury trials in the Circuit Court of Jackson County. The ordinance violations range from routine traffic offenses to domestic violence offenses and include nuisance and animal control violations. The Prosecution Division also enforces the City's Fire Code, Building Code, and Zoning Regulations. The Prosecutors also advise police and other enforcement staff on the preparation and presentation of cases in court, as well as issues related to the Open Records laws.
City of Lee’s Summit Annual Budget FY16
111 | P a g e
GeneralFund Department Budgets 6: General
PLANNING AND NEIGHBORHOOD SERVICES Long Range Planning and Neighborhood Services is a newly created department that will provide long range planning, CDBG and grants administration, special project management and Neighborhood Services, including enforcement of the Property Maintenance Codes. Planning review functions and building inspection services will be placed under the Development Center. This year’s budget cycle includes Administration, Grants Administration and CDBG, Long Range Planning and Neighborhood Services. The Administration Division is responsible for managing and directing the overall operations of the Department including development and monitoring of the Department’s budget, performance goals and objectives, setting Department policy, directing the amendment process of the UDO and serving as part of the City’s senior management team. Long Range Planning and Grant Administration Division provides support to the development community through administration of the Comprehensive Plan, special corridor planning studies, mapping, demographic and statistical analysis, annual department report and CDBG administration. Neighborhood Services Division provides support to development through code enforcement and property maintenance management. Neighborhood Services Division also assures that structures and property is used and maintained in a safe code compliant manner. In addition, Neighborhood Services is also responsible for zoning enforcement to ensure compliance with the provisions of the Unified Development Ordinance (UDO). The Minor Home Repair Program facilitated by the department provides a source for low-moderate income families to make improvements to owner occupied single-family residences through CDBG grants obtained by the City. This program is often used to abate property maintenance concerns being pursued by the Neighborhood Services Division. The department provides staff support for the Planning Commission, City Council, Community and Economic Development Committee, as well as ad hoc Committees appointed by the City Council or Planning Commission. The department also provides information to the general public, including realtors, appraisers, developers, contractors, citizens and others, regarding general and specific land use issues. Planning and Neighborhood Services participates in special projects such as corridor studies, land use initiatives and targeted quadrant comprehensive plan reviews as needed.
City of Lee’s Summit Annual Budget FY16
112 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
113 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
114 | P a g e
GeneralFund Department Budgets 6: General
POLICE DEPARTMENT The Police Department is comprised of three (3) Divisions: Operations, Investigations, and Administration. The Department is allocated 143 Police Officers and 68 Civilian Staff for a total of 211 personnel (206.70 FTE’s). The Administration Division consists of six (6) major components. Those components include the Animal Control Unit which is responsible for both public health and safety issues related to domestic and nondomestic animals. The Communications Unit handles all 9-1-1 calls for the City as well as non-emergency calls for Police and Animal Control. The Public Information Unit is responsible for media relations, managing the hiring process, and community interaction and crime prevention education through the Crime Prevention Officer. The Unit also supports the Police Service Officers who perform various functions including walk-in police reports, fingerprinting, and child-safety seat inspection and installation. The Professional Standards and Compliance Units have overall responsibility of ensuring compliance to policy and procedure by the Department. This is achieved through planning and research and policy development. The Facilities Maintenance Unit is responsible for the overall upkeep and repair of the police facilities as well as maintenance of the Departments’ communications equipment and installation of mobile radios, mobile data terminals, and other equipment. Lastly, the Information Management Unit handles the purchasing function, payroll function, and all other fiscal responsibilities, as well as supervision of the Records Unit. The Alarm Coordinator is also part of the Records Unit. The Operations Division includes the District Patrol, Traffic Safety, and Detention Units. The District Patrol function provides 24 hour police service. They answer calls for service, perform initial crime investigation, and arrest offenders of the law. A K-9 Unit also supports the Patrol Officers. The Traffic Safety Units’ primary responsibilities are investigating motor vehicle crashes, and enforcement of state and local traffic laws. The Detention Unit houses short-term inmates and is responsible for the inmates’ life-care needs while in custody. The Investigations Division is comprised of three (3) Units; Criminal Investigations, Special Investigations and Juvenile Investigations. The Criminal Investigations Unit performs follow-up investigative work on reported crimes. In addition, two (2) Domestic Violence Investigators are assigned to the Unit. The Special Investigations Unit investigates narcotics law violations, liquor law violations, and other vice crimes. The Juvenile Investigations Unit is responsible for all police-related interactions with youth, including: DARE, School Resource, and Youth Court, which acts as a follow-up in the prevention of delinquency. Two other Units which add support to the Department, but operate out of the Investigations Division, are the Polygraph Unit and the Bomb Unit. The Polygraph Unit handles internal affairs investigations. The Bomb Unit renders assistance with explosives or the threat of explosives. They also provide service to other agencies as needed.
City of Lee’s Summit Annual Budget FY16
115 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
116 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
117 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
118 | P a g e
GeneralFund Department Budgets 6: General
PUBLIC WORKS ENGINEERING The Public Works Engineering Division is comprised of the Administration Group, a Project Engineering Group, an Engineering Support Group, a Traffic Engineering Group, and a Construction Management Group. Funding is primarily from the General Fund, supplemented by transfers from the various enterprise and capital project funds for directly related program costs. The Public Works Administration Group includes the Department director and other support staff who provide overall guidance and management of all divisions of the Public Works Department. The Administration Group also includes the centralized customer service function for the department. The Project Engineering Group manages the design process for the City's major drainage, water, and sewer infrastructure projects, as well as some road projects. A significant portion of the work produced by this group is in-house design. The Engineering Support Group includes technicians that support the in-house design efforts as well as additional engineering project management for road and airport projects. The support group also provides engineering services to the Public Works Operations Division when needed. The Traffic Engineering Group is responsible for design of traffic control devices, street lighting and some road projects within the City. The group also provides engineering services related to traffic operations and works closely with the Public Works Operations Division. The Traffic Engineering Group is also responsible for the long-range planning of transportation improvements in the City, including the City’s Thoroughfare Master Plan. The Construction Management Group is responsible for the oversight and inspection of road, storm sewer, water and sanitary sewer capital projects. Duties generally include monitoring construction schedules and budgets, overseeing compliance with contract legal requirements, inspecting construction for conformance to project plans and technical specifications, and communication with members of the public affected by the construction project. All of the groups work extensively with other divisions and departments within the City as well as providing professional staff interface with organizations such as the Mid-America Regional Council (MARC), the Missouri Department of Natural Resources (MDNR), and the Missouri Department of Transportation(MoDOT).
City of Lee’s Summit Annual Budget FY16
119 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
120 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
121 | P a g e
GeneralFund Department Budgets 6: General PUBLIC WORKS OPERATIONS The Public Works Operations Division maintains public infrastructure—the transportation network including City owned traffic signals, school flashers, street lights and the storm water collection system. During the winter months snow removal becomes the top priority. The Division falls within the Operations Group (with the Airport Division and Solid Waste Division) under the Deputy Director of Public Works. The Operations Division is divided into six main groups which include administration, stormwater, bridge and right-of-way, traffic, street maintenance, and capital pavement management. The administration group coordinates the budget and tracking of information and costs within the Division. An infrastructure management software program called Cityworks is utilized to track costs, evaluate efficiency, and manage performance. This group also administers the Adopt a Street program; all locations adopted are either a half mile or one mile in length. The street maintenance group performs pothole patching, pavement inspection (for the Overlay, Slurry seal and Crack seal programs) and maintenance on streets, alleys and City owned parking lots. The City currently has 1,029 lane miles of City owned pavement. The storm water group inspects, maintains, and repairs the 1,313,720 lineal feet of storm pipe as well as the 14,336 storm water structures currently in the system. The street sweeping program is also part of this group. The bridge and right-of-way group performs maintenance and repair on the 52 City maintained bridges as well as sidewalk maintenance, tree trimming, right-of-way mowing, weed spraying and litter pickup. The traffic group fabricates and installs street name signs, regulatory signs and warning signs throughout the City. They also perform paint striping on City owned parking lots and cross-walks. This group also performs maintenance and repair on 54 signaled intersections and 1500 City owned street lights, including 133 downtown street lights. This group also performs locates for any excavations in the vicinity of City owned signals and street lights. Capital pavement management is also administrated out of this division. The pavement management program includes crack seal, micro surface, ultra thin bonded wearing surface, overlay and curb replacement for 1,029 lane miles of City maintained roadway. MicroPaver software is currently being implemented to evaluate the roadway infrastructure based on current pavement inspections. MicroPaver once fully functional will identify priorities and trends in capital pavement management. Capital pavement management program also oversees the sidewalk gap and repair bond program. The city is responsible for over 350 miles of sidewalk.
City of Lee’s Summit Annual Budget FY16
122 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
123 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
124 | P a g e
GeneralFund Department Budgets 6: General
City of Lee’s Summit Annual Budget FY16
125 | P a g e
7: Special Revenue Funds General
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trust or major capital project) requiring separate accounting because of legal or regulatory provisions or administrative action. The funds in this section are categorized as governmental fund type. The City’s Special Revenue Funds are as follows: PARKS AND RECREATION SPECIAL REVENUE FUNDS: Park Board (Parks & Recreation) — Accounts for activities of the Park Board, who administers operations of all City parks. Senior Center (Gamber Center) — Accounts for the activities of the Gamber Community Center. Swimming Pool (Aquatics) — Accounts for the activities of the municipal swimming pool operation. Community Center — Accounts for the activities of the Legacy Park Community Center operation. Cemetery Trust — Accounts for plot and monument sales for perpetual care funding.
OTHER SPECIAL REVENUE FUNDS: Business and Industry Fund — Accounts for and distributes the proceeds from a 5% tax on certain gross receipts of hotels, motels, and similar places of business. CDBG Entitlement Fund — Accounts for Community Development Block Grant (CDBG) federal funding passed through to other agencies. Violence Against Women Grant Fund – Accounts for federal monies used for the protection of women.
City of Lee’s Summit Annual Budget FY16
127 | P a g e
7: Special Revenue Funds General
PARKS AND RECREATION DEPARTMENT SPECIAL REVENUE FUNDS The Parks and Recreation Department is structured within six programs: Administration, Planning and Development, Operations and Construction, Grounds Maintenance, Legacy Park, and Beautification Commission. Within these programs, the department administers eight funds: five Special Revenue Funds, two Capital Project Funds (greenway and Neighborhood Development), and one Enterprise Fund (Harris Park Community Center). Descriptions and budgets for the Capital Projects and Enterprise Funds may be found in their respective sections of this document. The special revenue funds of the Parks and Recreation Department include: Parks & Recreation, Gamber Center, Swimming Pool, Community Center, and Cemetery Trust Funds. They are accounted for as special revenue funds and utilize Generally Accepted Accounting Practice (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due. Revenues susceptible to accrual are property taxes and interest revenue. Admission fees, user charges, concession sales and miscellaneous revenue are not susceptible to accrual.
City of Lee’s Summit Annual Budget FY16
128 | P a g e
General 7: Special Revenue Funds
SUMMIT WAVES AQUATIC CENTER FUND Summit Waves Aquatic Park is open from Memorial Day weekend through Labor Day and is located in Harris Park. The community wide family aquatics center contains a 6 lane, 25 yard lap pool with 2 diving boards, a zero depth entry pool with large play feature designed for toddlers, a 900+ foot action river, 1 open flume slide that can be used as a body slide or can be used to ride a single or double inner tube, and a closed flume body slide. Participants will also enjoy amenities including shade structures, lounges, family changing rooms, men’s and women’s locker rooms and a food and beverage operation that will offer items such as value meals, candy, drinks and breakfast items. The Aquatics fund is accounted for as Special Revenue funds and utilize Generally Accepted Accounting Principles (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
129 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
130 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
131 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
132 | P a g e
General 7: Special Revenue Funds CEMETERY TRUST FUND The Cemetery Trust Fund was established to account for plot, niche and monument sales and to provide funding for the perpetual care of the Lee’s Summit Historical Cemetery. The Parks and Recreation Department oversees and maintains the city cemeteries on behalf of the City of Lee's Summit. The Cemetery Trust fund is accounted for as Special Revenue funds and utilize Generally Accepted Accounting Principles (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
133 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
134 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
135 | P a g e
General 7: Special Revenue Funds GAMBER CENTER FUND The Gamber Center is designed to meet the recreational needs of the 50+ community. The facility also serves the community at large and consists of a ballroom (banquet seating for 200), bistro, billiards room, dry craft room, wet craft room, two fitness centers, aerobics studio, classroom (seating 25), and full kitchen. The design of the facility allows for flexibility in programming to accommodate new trends and technology. Participants will also enjoy outdoor amenities including a gazebo, raised planting beds, a walking path with 9 pieces of fitness equipment, outdoor seating for the bistro, and a manicured lawn for outdoor activities. The fund is a special revenue fund and utilizes Generally Accepted Accounting Practice (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
136 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
137 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
138 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
139 | P a g e
General 7: Special Revenue Funds HARRIS PARK COMMUNITY CENTER FUND The Harris Park Community Center, with renovated additions, is now approximately 30,000 square foot. The recreation facility provides indoor recreational opportunities for all ages through a day camp for school age children held in the summer, holiday breaks from school and scheduled school days off, recreational athletic leagues, programs, instructional classes, special events, and rentals. The summer recreational day camp is for ages 5-11 and provides a wide variety of activities such as skating, bowling, field trips, guest speakers, swimming, etc. The Athletics program provides opportunities for youth such as volleyball, basketball and soccer leagues. Adults, male, female and coed, are served as well at the HPCC for basketball, volleyball, dodge ball or at the newly renovated Hartman Park softball field complex. Instructional classes provide a wide variety of educational and recreational opportunities for pre-school through adults that focus on basic instruction for the individual or family participation. The Special Events group increases cultural awareness by hosting a summer concert series to the community of Lee’s Summit free of charge. Staff from the Parks Department also serves as a liaison to the Arts Council working with a citizen group to research and provide cultural arts activities for the City. The fund is a special revenue fund and utilizes Generally Accepted Accounting Practice (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
140 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
141 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
142 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
143 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
144 | P a g e
General 7: Special Revenue Funds LEGACY PARK COMMUNITY CENTER FUND The Community Center at Legacy Park opened in December 2003 and is approximately 58,000 square feet. The facility offers a fitness area with various fitness equipment, elevated running track, gymnasium (2 basketball or volleyball courts), 2 racquetball courts, an aerobics/fitness room, cycle studio, a natatorium with various aquatic features, and a child care area. The Center offers single visit passes, annual memberships, and Flex (monthly installment) memberships. Also available is a Passport membership which allows reciprocal use of Gamber Center and Legacy Park Community Center. Other fee based programs such as swim lessons, massage therapy, instructional and recreational opportunities for the multigenerational population are also available. A teen summer day camp is also offered at this facility. The strategic financial goal is to attain 100% operational cost recovery for the facility. The facility is funded by user fees, facility rentals and memberships. The fund is a special revenue fund and utilizes Generally Accepted Accounting Practice (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
145 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
146 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
147 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
148 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
149 | P a g e
General 7: Special Revenue Funds
PARKS AND RECREATION FUND The Parks & Recreation fund is used to account for the maintenance of 30 municipal parks, which include recreational facilities for softball, baseball, soccer, tennis, picnics, walking/jogging, handball/racquetball, basketball and volleyball. Numerous playgrounds and all-purpose open space are also available to the citizens of Lee's Summit. The primary source of revenue is a 0.1630 cent property tax levied to support park operations. Five divisions are represented in the Parks fund including: Administration – this division provides leadership, coordination and support services including marketing, financial oversight, and overall support for the Parks and Recreation Board. Park Operations and Construction – this division provides maintenance of park grounds, equipment, buildings, special facilities, and construction and renovation of neighborhood parks. Neighborhood park planning and development services and construction are included in this program. City Grounds and Facilities Management – this program accounts for costs related to contracting with the City for turf and landscape maintenance of public buildings, medians, city parking lots, and islands. Legacy Park Management – this program provides maintenance for Legacy Park grounds, ball fields, equipment, concession buildings, pump house, lake and irrigation. Beautification Commission – this program accounts for costs associated with staff support and projects for the activities of the Beautification Commission. The Parks & Recreation fund is accounted for as Special Revenue funds and utilizes Generally Accepted Accounting Principles (GAAP) based budgeting. This requires that the modified accrual method is used to record revenues and expenditures. Revenues are recognized when susceptible to accrual (i.e. when they become measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities when due.
City of Lee’s Summit Annual Budget FY16
150 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
151 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
152 | P a g e
General 7: Special Revenue Funds
City of Lee’s Summit Annual Budget FY16
153 | P a g e
BUSINESS AND INDUSTRY FUND YEAR BEGINNING JULY 1, 2015 FY 2009 ACTUAL REVENUES: Business & Industry Tax (Hotel) Penalty/Interest Transfers Contributions Interest
$
Total Revenues EXPENDITURES: Administrative Fees Payment Discount Interest Expense Transfer Shop Lee's Summit Advertising Campaign Contributions Downtown Mainstreet Inc (DLSMS) Downtown Mainstreet Inc: Downtown Masterplan LS Economic Development Council LS Chamber of Commerce Arts Commission Historic Preservation Grant Community Branding Total Expenditures
FY 2010 ACTUAL
FY 2011 ACTUAL
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
351,854 $ (807) 0
311,027 $ 0 0
334,472 $ 0 62,220
297,045 $ 91 62,220
310,884 $ 0 62,220
3,616
(114)
176
273
246
$
354,664 $
310,913 $
396,868 $
359,629 $
373,350 $
$
7,037 $ 6,556
6,221 $ 6,087 110
6,690 $ 5,898 13
6,293 $ 6,221 0
6,267 $ 6,194 0
$
Excess of Revenues Over (Under) Expenditures
FY 2015 BUDGET ESTIMATED
342,603 $ 60 62,200
FY 2016 Proposed
328,504 $ 0 14,000
332,659 $ 0 14,000
340
396
404,929 $
342,844 $
347,055 $
366,715
6,297 $ 6,792 0
6,299 $ 6,204 0
6,297 $ 6,204 0
6,297 6,204 0
66
351,515 0 14,200 1,000
0
0
0
0
0
0
0
0
0
30,000 102,000 279,200 75,700
24,130 102,000 224,569 40,780
60,000 0 250,916 40,780
60,000 0 250,911 50,700
60,000 0 250,911 50,700
60,000 0 250,911 50,700
59,122 0 217,968 51,043
59,122 0 217,968 51,043
52,432 0 219,264 44,305
0
0
0
0
0
0
0
500,493 $
(145,830)
403,897 $
364,297 $
(92,984)
32,571
374,125 $
(14,496)
374,072 $
(722)
374,700 $
30,229
340,636 $
340,634 $
328,502
2,208
6,421
38,213
Fund Balance, Beginning of Year
$
268,849 $
122,304 $
29,322 $
61,893 $
47,397 $
46,675 $
76,904 $
76,904 $
83,326
Fund Balance
$
123,020 $
29,322 $
61,893 $
47,397 $
46,675 $
76,904 $
79,112 $
83,326 $
121,539
% of Total Expenditures to Ending Fund Balance
24.6%
7.3%
17.0%
12.7%
12.5%
20.5%
23.2%
24.5%
37.0%
The Business and Industry Tax fund was created to account for the license tax on certain gross receipts of hotels, motels and similar places of business, in an amount equal to 5% of gross daily rental receipts derived from transient guests for sleeping accommodations. The proceeds are used to promote the general economic welfare of the City including attraction and retention of business and industry to the community and the promotion and provision of facilities for tourism, conventions, and visitors. Businesses are allowed to deduct 2% processing fee if their tax is remitted before the 20th of the month. The 7 hotel/motels in the City have a total of 493 rooms with an average occupancy rate of 56% for fiscal years 2006, 2007, and 2008. Average Occupancy Rate: FY09 - 50.7% FY10 - 48.3% FY11 - 55.7% FY12 - 55.0% FY13 - 57.8% Revenues: FY16 assumes growth of 7% from the FY15 Budget. Year to date, revenues are 22% above FY15 budget and 17% above FY14 amounts. Beginning in FY11, the City's general fund transfered $62k to the Business and Industry Fund to prevent a negative fund balance. These payments have continued and are included in the projections for FY14. Additionally, in FY 06, $525k was transferred from the general fund to the Business and Industry Fund for the Downtown Masterplan Improvements five-year implementation plan. FY 2009-10 reflects the last year of payment toward the Downtown Masterplan. This is shown under contributions in the amount of $102,000. Beginning in FY15 general fund contributions were reduced as apart of the City Manager's recommended budget. Expenditures: FY16 assumes a limited general fund contribution and transfer to the B&I Fund. The purpose of this transfer is to help ensure that B&I fund maintains a positve balance and offset decreased hotel/motel tax revenues. In FY12, contributions to the Chamber of Commerce increased to fund the 'Shop Lee's Summit' campaign. In FY11, funding for DLSMS services was revised to $60k following improvements implemented under the Downtown Masterplan. REVENUES:
REVENUES, EXPENDITURES & FUND BALANCE $450,000
EXPENDITURES:
Fund Balance
$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ACTUAL FY 2010
ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014
BUDGET FY 2015
ESTIMATED
Proposed FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
155 | P a g e
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ENTITLEMENT FUND YEAR BEGINNING JULY 1, 2015 FY 2011 ACTUAL REVENUES: Intergovernmental revenues: Contributions- Federal Other Total Revenues EXPENDITURES: Contributions expense Interest on Bonds Total Expenditures
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
FY 2015 BUDGET PROJECTED
FY 2016 Requested
$
291,032 $
386,146 $
332,952 $
238,227 $
288,907 $
288,907 $
298,901
$
291,032 $
386,146 $
332,952 $
238,227 $
288,907 $
288,907 $
298,901
$
291,816 $ 0 291,816 $
518,103 $
205,357 $
216,488
251,003 0
251,003 0
298,091 0
518,103 $
205,357 $
216,488 $
251,003 $
251,003 $
298,091
$
Excess of Revenues Over (Under) Expenditures
(784)
(131,957)
127,595
21,739
37,904
37,904
810
Fund Balance, Beginning of Year
$
(27,362) $
(28,146) $
(160,103) $
(32,508) $
(10,769) $
(10,769) $
27,135
Fund Balance
$
(28,146) $
(160,103) $
(32,508) $
(10,769) $
27,135 $
27,135 $
27,945
This fund was created to account for money received from the U.S. Department of Housing and Urban Development (HUD) under the Community Development Block Grant Program. The City "passes through" these funds to other organizations based on criteria established by HUD and the City Council.
REVENUES, EXPENDITURES & FUND BALANCE
REVENUES: EXPENDITURES:
$600,000
Fund Balance
$500,000 $400,000 $300,000 $200,000 $100,000 $$(100,000) $(200,000) ACTUAL FY 2011
ACTUAL FY 2012
City of Lee’s Summit Annual Budget FY16
ACTUAL FY 2013
ACTUAL FY 2014 FISCAL YEAR
BUDGET FY 2015
PROJECTED
Requested FY 2016
156 | P a g e
VIOLENCE AGAINST WOMEN GRANT FUND YEAR BEGINNING JULY 1, 2015 FY 2012 ACTUAL REVENUES: Federal Contribution Interest
$
Total Revenues
FY 2014 ACTUAL
FY 2013 ACTUAL
FY 2015 PROJECTED BUDGET
FY 2016 REQUEST
207,561 $
207,561 $
304,334
138,410 $
207,561 $
207,561 $
304,334
42,543 $
48,107 $
175,778 $
175,778 $
152,167
42,543 $
48,107 $
175,778 $
175,778 $
152,167
208,660 $ 356
225,093 $ 325
138,389 $
$
209,016 $
225,418 $
$
175,785 $
$
175,785 $
21
EXPENDITURES: Program Expenses Interest Total Expenditures Excess of Revenues Over (Under) Expenditures
33,231
182,875
90,303
31,783
31,783
152,167
Fund Balances, Beginning of Year
$
(22,280) $
10,951 $
193,826 $
193,826 $
225,609 $
257,392
Fund Balances, End of Year
$
10,951 $
193,826 $
284,129 $
225,609 $
257,392 $
409,559
This fund was established to account for the revenue and expenditure pass through for the Violence Against Women Grant Program in conjunction with Hope House, Inc..
REVENUES, EXPENDITURES AND FUND BALANCE
REVENUES: EXPENDITURES:
$450,000 Fund Balances, End of Year
$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014
BUDGET FY 2015
PROJECTED
REQUEST FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
157 | P a g e
8: Capital Project Funds General
CAPITAL IMPROVEMENTS OVERVIEW A Capital Improvement Plan (CIP) is a major public infrastructure planning tool for many local governments. The CIP reflects the community’s assets, needs and goals, and is a statement of the City’s policies and projected financial ability to manage the physical development of the community. The development of a CIP matches information regarding planned public improvements with anticipated funding, and thus presents a systematic plan for providing the needed improvements within a prioritized framework. The City’s Charter mandates the development and annual review of a capital improvements plan and estimated operating and maintenance costs of the proposed improvements. The plan is formally adopted each year by the Planning Commission as part of the Comprehensive Plan. This approach addresses legal requirements for public hearings on the location, nature and extent of all projects. All costs identified for the first year of the plan are included in the City’s Operating Budget, which is adopted by the Mayor and City Council, for the upcoming fiscal year. The proposed five (5) year CIP for the City of Lee’s Summit sets the general schedule for which public improvements are proposed to be undertaken in that time frame. The CIP includes projects over $50,000 in total cost that are anticipated to be funded during the five-year period. Operating and maintenance expense information is provided for the first year of the plan when applicable. Annual maintenance programs, small projects and small planning studies, such as the street overlay program or system master plans, are typically included in the CIP as programs. A CIP is not a static document, but rather a fluid document that can be changed as the infrastructure requirements change, development occurs, and funding opportunities become available. The remaining four (4) years of the five-year plan represent all projects that are currently proposed for future funding based on the revenue projections. As priorities, needs and revenues change, projects may be added to or removed from the CIP. Estimated expenses and revenue projections are reviewed annually and adjusted if necessary to account for growth, inflation and other economic conditions. CAPITAL IMPROVEMENT PROCESS DEFINITION A capital improvement is a necessary or desirable project that extends or improves infrastructure and enhances the City’s ability to provide safe and desirable services for the benefit of the community and the quality of life in Lee’s Summit. These projects directly affect the way citizens live, travel and conduct business within the community. IDENTIFICATION The need for capital improvements may be identified by an adopted infrastructure master plan, the desire to maintain certain levels and types of service provided in the community, by community groups, or by regulatory legislation. Projects are prioritized based on many factors including their impact on
City of Lee’s Summit Annual Budget FY16
159 | P a g e
8: Capital Project Funds General
providing better city services, accommodating city growth, effect on maintenance and operation expenditures, and the overall health, safety and welfare of the citizens. CREATION The scope of a proposed project is often determined based on a preliminary study or recommendations from other city master plans. Once the project is identified a preliminary cost estimate and schedule for the design, right of way and easement acquisition, and construction of the project is prepared. These initial cost estimates are typically general in nature with considerable contingencies included. If the project is selected for inclusion in the CIP, the estimates and schedule are the basis of the initial project information.
CAPITAL IMPROVEMENTS PLAN IMPLEMENTATION When a project on the CIP schedule is funded, it is assigned to a project manager who will assume oversight responsibilities. A number of steps are required before a project is complete. DESIGN The project manager will coordinate and participate in the selection process for an engineering or architectural design firm, as appropriate. Architectural and engineering services contracts, unlike commodities contracts, are awarded to firms strictly on the qualifications and expertise of the firm in the particular type of project. The project manager is responsible for negotiating a detailed scope and fee for the design services with the selected consultant. Design for some projects may be completed by City staff or awarded to consultants through annual on-call contracts. The design process is typically divided into several phases: concept and/or preliminary design, right-ofway plans, right-of-way appraisal and acquisition, and final design. Plans and cost estimates are prepared, either by the consultant or City staff, for review at least at these project milestones. If state or federal funding is involved, plans and estimates are also provided to the appropriate agency for review. As more refined information on project scope and cost is developed, the CIP document is revised accordingly during the next annual update. Occasionally, projects may be deferred or deleted from the plan based on information gathered during the design process that indicates significant problems with pursuing the project. Typically, one or more public meetings are held for major projects that have significant impacts on property owners and the public to obtain feedback and comments from the community. A meeting is often held at the completion of preliminary plans in order to let residents abutting the project know how the design will affect their properties. Comments made at the meetings are considered by City staff and the design firm for inclusion in revised plans, if appropriate, prior to appraisals and property acquisition. Other meetings may be held before any design is started and just before construction begins.
City of Lee’s Summit Annual Budget FY16
160 | P a g e
8: Capital Project Funds General
Right-of-way plans define the nature and extent of property required to complete a project. Property acquisition may be in the form of right-of-way, permanent easements or temporary construction easements. The City hires professional appraisers to determine fair market value of the acquisitions, which is the basis for initial offers to property owners. The City’s right-of-way agent and/or contract agents complete the negotiation and acquisition process for the projects. Once all property is acquired, final plans and specifications can be completed. During this time, any necessary relocation of private utilities (gas, phone, power) is also accomplished. Typically, all relocations are complete prior to bidding a capital project. ADVERTISEMENT, BID AND AWARD Capital projects are publicly advertised through the City’s Purchasing Division. City and consultant staff members evaluate all bids for completeness and correctness, and references for the low bidder are checked. Based on the review and references, the consultant or the City’s project manager makes a recommendation for award to the lowest and best bidder. The award of the construction contract is made by City Council. SCHEDULE The construction contract sets forth the required completion time for the project. Time is counted from the date of the “Notice to Proceed” to the point of substantial completion and final completion. The duration is determined by the design consultant and/or City staff based on the scope of work, seasonal constraints, coordination with property owners, and impacts on the traveling public. The order and duration of specific tasks within the allotted contract time is typically determined by the contractor. The assessment of liquidated damages is included in construction contracts for failure to meet required completion dates. CONSTRUCTION ADMINISTRATION The City’s project manager for the design processor or a project manager from the construction management group is typically responsible for performing or coordinating project administration during construction. Such tasks generally include monitoring project progress, schedule and costs; coordinating and facilitating communications between the design consultant, inspections staff, contractor and City staff; negotiating and coordinating approval of changes in the project scope or cost; reviewing and approving regular progress payments; and reporting on the construction progress to City Council and the public through the City’s publications and website. Changes to the contract totaling up to five percent of the original bid price may be approved administratively by the appropriate Department Director. Changes that increase the cost in excess of that amount must be approved by the City Council. SUBSTANTIAL COMPLETION Substantial completion is defined as the time at which the project has progressed to the point where it is sufficiently complete that it can be utilized for the intended purpose. At this time, a comprehensive
City of Lee’s Summit Annual Budget FY16
161 | P a g e
8: Capital Project Funds General
inspection is performed by City staff and the design consultant to create a list of all incorrect or outstanding items (a “punch list”) remaining to be completed or corrected. The punch list items and all other deficiencies must be completed before final acceptance of the project by the City, and final payment to the contractor. FINAL ACCEPTANCE Final acceptance is realized when the contractor has completed all work on the project, including punch list items, has provided the City with a maintenance bond, and has submitted all other close-out documents in accordance with the construction contract. The project manager is responsible for preparing a final project report and submitting it to city and department management staff as well as to City Council. Any unspent funds authorized for a project will be returned to the appropriate funding source for reallocation to future projects.
CAPITAL IMPROVEMENT PLAN FUNDING Revenue Sources All funding sources that may be used for various capital improvements are reviewed each year. Much of the work to develop the CIP focuses on the balancing of available resources with the identified capital needs. Consideration must be given to factors such as annual revenue projections from various sources, restrictions on the uses of certain funds, legal limitations on debt capacity, and City policies relative to project funding. The following is a list of existing funding sources and definitions for each: TAXES Property Tax- Revenue from the ad valorem tax levied on all real and personal property, based upon the assessed valuation established by the County Assessor on January 1st of each year. Real property assessed valuation is determined by applying the “market value” times the appropriate assessment ratios. As follows: • • • •
Commercial/Industrial: 32% Residential: 19% Agricultural: 12% Personal Property assessed valuation is set at 33% of market value and is determined by the State Tax Commission.
Sales Tax- The City imposes a total sales tax of 2.25% (Capital Improvement: 0.50%, General fund: 1.0%, Parks and Recreation: 0.25%, Transportation: 0.50%) on all goods and commodities sold within the City limits with the exception of drugs and farm machinery. The tax is also levied on all vehicles registered by residents of the City, regardless of where those vehicles were purchased. Transportation tax is not
City of Lee’s Summit Annual Budget FY16
162 | P a g e
8: Capital Project Funds General
levied on utilities and is earmarked specifically for use in funding transportation projects only. The State of Missouri receives the tax from the respective business and distributes the funds monthly to the City. Parks & Recreation 1/4-Cent Sales Tax- Initially approved in November 1997 for 3/8-cent and renewed in February 2006 for ¼-cent, this revenue source is dedicated to Parks and Recreation improvements including completion of Legacy Park facilities, new park development, the Senior Center, and greenway development. Transportation ½-Cent Sales Tax- Approved initially in the 1980s, this tax is available to pay for transportation and traffic infrastructure improvements and major maintenance, such as overlay and slurry seal, curb and gutter replacement, crack sealing and pavement marking. This sales tax also provides funding for several other Public Works Programs including bridge rehabilitation, thoroughfare and traffic master plan studies, community bus services and the Neighborhood Traffic Safety Program. Capital Improvement ½-Cent Sales Tax- Originally approved in November 1997, this tax has been used in conjunction with the Road Excise tax to fund road improvements related to the “10-year road plan” adopted in 1997. The sales tax was renewed in April 2007 with collection beginning in 2008 and ending in 2018. This renewal of the sales tax will fund a second “10-year road plan” comprising 6 major projects. Road Excise Tax- Excise Tax is paid for development that generates new traffic in the City in the form of a license tax on building contractors. This revenue source is available for road improvements throughout the City that are required due to growth to at least some degree. The excise tax will continue to be used for the remaining projects from the first 10-year plan until it is complete. Transportation Development Districts A geographic area may be designated to levy an additional sales or property tax assessment to pay for transportation related infrastructure improvements.
Tax Increment Financing Provides for the capture of 50% of the Economic Activity Taxes (Sales and Franchise) generated within the boundaries of a designated area to be used to finance infrastructure improvements. All of the incremental increases in real estate taxes are also captured from all taxing jurisdictions until the infrastructure is paid off. BOND PROCEEDS General Obligation (G.O.) Bonds- Bonds which are backed by the full faith and credit of the City and require either a 2/3rds or 4/7ths voter approval. Limitations for bonding capacity are set by state statute. Revenue Bonds- Bonds which are backed by the fees and charges of a business-like government function, payable only from a specific source of revenue. Simple majority voter approval required.
City of Lee’s Summit Annual Budget FY16
163 | P a g e
8: Capital Project Funds General
Limitations for bonding capacity are not set by state statute but rather the entity’s ability to repay the debt. Certificates of Participation- Bonds which are backed by general revenues or fees and charges of a government. No voter approval is required. Limitations for bonding capacity are determined by the market and the entity’s ability to repay the debt. Special Obligation Bonds- Bonds which are backed by general revenues or fees and charges of a government. No voter approval is required. Limitations for bonding capacity are determined by the market and the entity’s ability to repay.
GRANT FUNDING Grants may be received from federal, state or county governments. Grants are typically available for transportation, airport improvements, parks, and public safety equipment. The City also receives community development block grants (CDBG) for use in low-to-moderate income areas within the community. Equipment purchases and CDBG projects are not included in the CIP. FEES AND CHARGES Fees for direct receipt of public service by the parties who benefit from the service Landfill Tipping and Yard Waste Disposal Fees- Collected by Public Works Solid Waste Division for disposal of refuse or yard waste at the Resource Recovery Park. Parks and Recreation Activity Fees- Collected by Parks & Recreation Department for participation in various sports and recreation programs, aquatic instruction, and the Camp Summit and Club Summit daycare programs at the Recreation Center.
Recreation Memberships- Membership fees collected for the Lee’s Summit Pool and the Legacy Park Community Center. Water Sales- Charges for supplying water to residential, commercial, industrial and wholesale customers. Sewer Charges- Charges for providing wastewater collection and disposal services to residential, commercial and industrial customers. Sewer Tap- The charge for a new sanitary sewer connection based on the number of drains in a structure and assessed at the time of building permit issuance.
City of Lee’s Summit Annual Budget FY16
164 | P a g e
8: Capital Project Funds General
Water Taps- The charge for a new water service connection based on the size of water meter required. Also included in the water tap fee is an amount which is intended to provide capital for the development of the City’s water transmission capacity. PRIVATE FUNDING Amounts paid by developers, generally for specific infrastructure improvements, pursuant to development agreements between the City and those developers.
City of Lee’s Summit Annual Budget FY16
165 | P a g e
8: Capital Project Funds General
CAPITAL IMPROVEMENT PLAN COSTS
The 2016-2020 Capital Improvement Plan has been divided into eight major categories, plus the Public Works Programs. The total estimated cost of all projects included in the five-year plan is $284,700,000. A summary of the costs by category is summarized below. 2016-2020 CIP SUMMARY (Costs in $1000s)
Category
Prior Yrs % of Total
PW & WU Programs Airport Bridges, Streets, Signals Facilities Parks and Recreation Solid Waste Stormwater Sanitary Sewers Water TOTAL
N/A 14,462 67,302 1,000 2,013 0 15,800 5,503 21,624 127,704
N/A 11.3 52.7 0.8 1.6 0 12.4 4.3 16.9 100
2016-20
% of Total
34,085 43,619 112,618 1,260 6,898 1,090 15,800 30,886 38,444 284,700
12 15.3 39.6 0.4 2.4 0.4 5.6 10.8 13.5 100
2016 - 2020 CIP 12%
14%
PW & WU Programs Airport
11%
15%
Bridges, Streets, Signals Facilities Parks and Recreation
6%
Solid Waste Stormwater
2%
Sanitary Sewers Water 40%
City of Lee’s Summit Annual Budget FY16
166 | P a g e
8: Capital Project Funds General
Summary of Capital Projects Project #
Previous Funding Balance
FY16 Funding
Future Year's Funding Balance
Lifetime Budget (CIP)
Water Tap Fund 6
Blackwell Rd Interchange
241,203
0
241,203
271,000
154
KC Supply Proposal-Phase III
3,840,000
0
3,840,000
3,840,000
207
Water System Improvements
2,740,257
0
2,740,257
4,460,000
288
Water Upsizing
180,000
0
180,000
180,000
7,001,460
0
7,001,460
8,751,000
3,205,836
0
3,205,836
3,383,000
Sewer Tap Fund 8
CC/WPL-SSES & I/I rehab-SwrCon
146
SPL-Scruggs Rd PS EFHB
483,079
0
483,079
1,262,000
196
CC Intrcptr-WW & SH
547,533
0
547,533
565,000
285
Boggs Hollow Meter Structure
150,000
0
150,000
150,000
4,386,448
0
4,386,448
5,360,000
5,973,450
0
5,973,450
6,500,000
297,464
0
297,464
300,000
Water Construction 144
Operation Facility-Site Acquis
155
SCADA Radio Communications
197
Wtr Main Rehab FY14-Chipmn&L
1,076,218
0
1,076,218
1,270,000
198
Wtr Main Rehab FY14-Wind,Lido,
796,179
0
796,179
1,064,000
199
Wtr Main Rehab FY14-Willow etc
317,093
0
317,093
1,163,000
200
Wtr Main Rehab FY15
1,965,046
0
1,965,046
2,000,000
205
Water Meter Replacement
373,231
400,000
773,231
2,000,000
261
Water line relocate 150 Hwy
44,234
0
44,234
0
10,842,914
400,000
11,242,914
14,297,000
Sewer Construction Fund 33
Lees Summit Rd Lift EFHB
135,334
0
135,334
150,000
46
Prairie Lee Lake SS South
198,014
0
198,014
1,004,000
1,018,000
0
1,018,000
1,018,000
141
Cedar Creek Watershed-SSES
142
Sanitary Sewer Rehab-FY13
425,000
0
425,000
425,000
143
Tudor Pump Stn-Odor Contrl Sys
516,000
0
516,000
516,000
144
Operation Facility-Site Acquis
6,500,000
0
6,500,000
6,500,000
160
CC Wtrshd-CC16,CC20 Priv I/I R
570,026
0
570,026
584,000
187
Cedar Creek SSES&I/I Rehab
361,000
2,898,000
3,259,000
3,259,000
188
CC Wtrshd-CC17,CC21 Priv I/I
500,000
1,459,000
1,959,000
1,959,000
191
Sanitary Sewer Rehab-Relinin/M
1,573,003
945,000
2,518,003
5,455,000
195
WPL SSES&I/I Rehab
758,000
3,292,000
4,050,000
10,635,000
12,554,376
8,594,000
21,148,376
City of Lee’s Summit Annual Budget FY16
31,505,000
167 | P a g e
8: Capital Project Funds General
Summary of Capital Projects Project #
Previous Funding Balance
FY16 Funding
Future Year's Funding Balance
Lifetime Budget (CIP)
WU Equipment Replacement 134
Equipmnt Replacemnt/Rehab FY13
283
Equipment Rplcmnt/Rehab FY15
125,000
0
125,000
125,000
1,005,639
0
1,005,639
1,042,000
1,130,639
0
1,130,639
1,167,000
Airport Construction 14
Earthwork18-36&WestParExt
9,455,300
0
9,455,300
8,317,000
29
Land Acq ALP Prop Phase 2
7,743,772
0
7,743,772
4,925,000
400,000
1,640,000
2,040,000
8,600,000
17,599,073
1,640,000
19,239,073
21,842,000
Bailey Road M291-Hamblen
2,089,762
0
2,089,762
8,279,000
22
Hook Rd--Ward Rd to 291
2,326,250
0
2,326,250
4,288,000
27
Jefferson-Persels/Stuart
8,430,888
0
8,430,888
9,714,000
36
LS Rd-Colbern to City Lmt
14,533,491
0
14,533,491
16,273,000
73
Chipman-Bent Tree/View Hi
456,584
6,333,000
6,789,584
10,414,000
1,212,773
1,853,000
3,065,773
15,908,000
29,049,748
8,186,000
37,235,748
64,876,000
169
Const Pavement Runwy 18-36
Capital Imprvmt Sales Tax 4
185
Ward Rd-150 to Raintree Pkwy
Road & Bridge Improvement 6
Blackwell Rd Interchange
11,399,832
4,340,000
15,739,832
15,740,000
26
Indep/Town Ctr Intersectn
677,330
0
677,330
1,760,000
38
Murray Road Bridge Replac
654,192
0
654,192
850,000
51
Second/Douglas Signal Rep
22,252
0
22,252
330,000
60
Traffic Sgnl Comm Mstr Pl
201,386
0
201,386
295,000
4,175,000
0
4,175,000
4,175,000
152,766
0
152,766
250,000
110
Strother Road-Road Imprv 2010
129
Bridge Rehab/Maintenance FY13
130
Capital Project Planning FY13
14,023
0
14,023
20,000
135
Main Street Bridge over 2nd St
120,000
0
120,000
120,000
136
Pryor Rd Recon-Hook to M150
297,386
0
297,386
1,710,000
137
Second & Main Signal Replacmnt
72,731
0
72,731
360,000
181
Lakewood Way/Bowlin Rd Signal
39,422
0
39,422
225,000
182
Pryor Rd/Longview Signal
20,000
280,000
300,000
300,000
City of Lee’s Summit Annual Budget FY16
168 | P a g e
General 8: Capital Project Funds Summary of Capital Projects Project #
Previous Funding Balance
FY16 Funding
Future Year's Funding Balance
Lifetime Budget (CIP)
208
Overlay & Slurry Seal FY14
59,167
0
59,167
3,700,000
210
Neighborhd Trf Sfty Prog FY14
36,552
0
36,552
60,000
211
Bridge Rehab/Maint FY14
49,087
0
49,087
50,000
212
Guardrail Imprv Prog FY14
18,028
0
18,028
30,000
213
Capital Proj Planning FY14
7,076
0
7,076
20,000
214
Thoroughfares/Traffic FY14
42,048
0
42,048
75,000
216
Cracksealing FY14
235,679
0
235,679
240,000
273
Overlay & Slurry Seal FY15
326,791
0
326,791
3,871,000
275
Neighborhd Trf Sfty Prog FY15
56,667
0
56,667
60,000
276
Bridge Rehab/Maint FY15
50,000
0
50,000
50,000
277
Guardrail Imprv Prgm-FY15
27,515
0
27,515
30,000
278
Capital Proj Planning FY15
13,291
0
13,291
20,000
279
Thoroughfares/Traffic Prg-FY15
73,978
0
73,978
75,000
280
Pavement Marking Prog-FY15
353,246
0
353,246
360,000
281
Crack Sealing Prog-FY15
7,367
0
7,367
240,000
282
Bus Serv-ATA/OATS-FY15
598
0
598
213,000
19,203,407
4,620,000
23,823,407
35,229,000
-84,832
375,000
290,168
750,000
-84,832
375,000
209,619
750,000
4,371,064
0
4,371,064
15,799,954
4,371,064
0
4,371,064
15,799,954
81,485
0
81,485
3,600,000
81,485
0
81,485
3,600,000
Park Development Fund 284
Miller J Field Park Renovation
Storm Water Improvements 54
Stormwater Phase I
Arterial Street Lights II 2
Arterial Str Lights Ph II
City of Lee’s Summit Annual Budget FY16
169 | P a g e
General 8: Capital Project Funds Summary of Capital Projects Project #
Previous Funding Balance
FY16 Funding
Future Year's Funding Balance
Lifetime Budget (CIP)
Public Safety 2010 15
Emergency Radio Upgrade
45
Police Facility Imprvmnts
38,633
0
38,633
2,000,000
207,311
0
207,311
8,846,189
245,945
0
245,945
10,846,189
7,315,552
0
7,315,552
9,360,000
614,074
0
614,074
2,500,000
7,929,626
0
7,929,626
11,860,000
6,869,550
0
6,869,550
11,143,000
6,869,550
0
6,869,550
11,143,000
40,928
0
40,928
0
40,928
0
40,928
0
1,511,442
0
1,511,442
1,638,000
306,941
260,000
566,941
1,260,000
1,818,383
260,000
2,078,383
2,898,000
1,736,299
0
1,736,299
3,000,000
716,656
0
716,656
1,600,000
2,452,954
0
2,452,954
4,600,000
Infrastructure Improv '10 11
Curb Replacement
53
Sidewalk Rehab Phase II
Tudor Rd Improvemnts 2010 63
Tudor Road 2010
TIF Application Fund 161
Happy Valley-proposed TIF
Cultural Arts 2013 258
Legacy Pk Amphitheater Improvm
259
Cultural Arts Downtown Campus
Road Improvements 2013 256
Orchard St Reconst-Dgls to Ind
257
Pryor Rd Shouldrs-Lgvw to Hook
City of Lee’s Summit Annual Budget FY16
170 | P a g e
General 8: Capital Project Funds
CIP IMPACT ON OPERATING BUDGET As part of the Capital Improvement Plan, the impact of each project on the City’s operating budget is identified. As capital improvement projects are completed, operation and maintenance of these facilities must be absorbed into the appropriate department operating budget, which provides ongoing services to citizens. These operating costs, which may include salaries, equipment, regular maintenance, and repairs, are adjusted annually to accommodate growth and inflation in maintaining or improving service levels. In some cases, elimination of high-maintenance facilities may also reduce these operating costs. It is the City of Lee’s Summit’s philosophy that new projects should not be constructed if operating revenues are unavailable to cover the operating costs. These must be funded with recurring (ongoing) revenues. As a result, the availability of recurring revenues must be considered in the decision to include projects in the plan. The 2016-2020 CIP totals $284,700,000 (including funding from prior years), down from $296,055,000 in the 2015-2019 plan. The decrease in the total is due primarily to the completion of various projects previously included in the CIP. Significant changes to the CIP include:
Completed Projects •
Arterial Streetlights, Phase 2
•
Chipman Road & Commerce Drive Signal
•
Hook Road, Ward Road to Route 291
•
Pryor Road Shoulders, Longview to Hook
•
Second & Main Signal Replacement
•
2010 Sidewalk Improvements
•
Police Training and Detention Facility
City of Lee’s Summit Annual Budget FY16
171 | P a g e
General 8: Capital Project Funds New Projects •
FAA Review and Testing for Navaid Relocation
•
West Apron Construction
•
Chipman Road Bridge Rehabs over UPRR
•
South M291 Interchange with US50
•
North Lea McKeighan Park Improvements
•
Lowenstein Trail Renovations
•
Lowenstein Park Renovations
•
Bailey Farm Park Interpretive Center
•
Sprayground Sites (South and East)
•
Summit Park Shelter Replacement
•
Legacy Park Trail Connector
•
Legacy Park Practice Field and Game Field Improvements
•
Park West/Eagle Creek/Pryor Road Trail Connector
•
Wastewater Flow Monitoring
•
Small Sewer Main Replacement Program
•
South Prairie Lee Interceptor Sewer at Crystal View Estates
•
Water Main Rehabilitation and Upsize
•
South Terminal Discharge Main
The following pages display a few detailed examples of the CIP’s impact on the operating budget.
City of Lee’s Summit Annual Budget FY16
172 | P a g e
General 8: Capital Project Funds
City of Lee’s Summit Annual Budget FY16
173 | P a g e
General 8: Capital Project Funds
City of Lee’s Summit Annual Budget FY16
174 | P a g e
General 8: Capital Project Funds
City of Lee’s Summit Annual Budget FY16
175 | P a g e
General 8: Capital Project Funds
City of Lee’s Summit Annual Budget FY16
176 | P a g e
9: Proprietary Funds General
PROPRIETARY FUNDS
Enterprise Funds are used to account for operations that provide a service to the general public and are financed primarily by a user charge for the provision of such service. The city operates four enterprises: the Water/Sewer Utility, the Municipal Airport, the Sanitary Landfill, and the Recreation Center. Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. The City has seven Internal Service Funds. The Central Vehicle Maintenance Fund and Management Information Systems Funds were established to provide replacement vehicles and data processing equipment and the related maintenance services to the various City departments. Unemployment Insurance Fund, Insurance Reserve Trust Fund, Short Term Disability, and Worker’s Compensation Self Insurance Fund were established to account for the City provided employee benefits. New in Fiscal Year 2007-2008 is the Central Building Services Fund. This fund will provide funding for capital maintenance projects. The City utilizes Generally Accepted Accounting Practice (GAAP) based budgeting for these funds. This requires that the full accrual method be used to record revenues and expenditures. This presentation records long-term assets and liabilities, and recognizes revenues and expenses when transactions occur.
178 | P a g e
CENTRAL BUILDING SERVICES Central Building Services (CBS) is an internal services fund comprised of five service functions: Capital Project Management Services, Building Maintenance Services, Custodial Services, Utilities and General Services including the Building Equipment Replacement Program (BERP). The City Architect manages CBS. Capital Project Management Services focuses on new building project development such as the new Indoor Firing Range/Training Facility for the Police Department, as well as building or site renovation projects such as the renovation of the Police Department Detention Facility. The City Architect dedicates 75% of his time to provide design and construction oversight, while assisting the responsible department’s project team from concept through completion. The Building Maintenance Services staff includes 25% of the City Architects time as well as 2.25 FTEs. One staff member is a heating, ventilation and air conditioning (HVAC) technician. The services provided include routine maintenance, scheduled and unscheduled maintenance, repairs and general upkeep of facilities throughout the City. Specifically, they are responsible for maintaining City Hall, City Hall Parking Garage, all City fire stations, Animal Control, Public Works Maintenance Facility, Arnold Hall, Amtrak Station and downtown restrooms. Most maintenance related on-call contracts are administered as part of the services provided and includes elevator inspections, fire alarm inspections, window washing and carpet cleaning. Duty hours are from 6:30 AM to 3:30 PM, Monday through Friday. The Custodial Services staff includes 5.5 FTEs. The services typically include custodial and janitorial duties including floor care, trash disposal, recycling and detail cleaning of staff offices, restrooms and public spaces. Outside duties include snow and trash removal. 3 FTEs are assigned to City Hall/Parking Garage who work 3rd shift hours from 11:00 PM to 7:30 AM, Sunday night through Thursday night. 1 FTE is also assigned to City Hall/Parking Garage and 1 FTE is assigned to the Public Works Maintenance Facility and Animal Control working from 9:00 AM to 5:30 PM, Monday through Friday. 0.5 FTE is assigned to Fire Headquarters and the Municipal Court and works from 5:00AM to 9:00 AM. The Utilities and General Services program includes budget administration of all utilities for City Hall and Parking Garage. Specifically, natural gas, electricity, water/sewer and trash disposal is included. This program also administers the landscaping Memo of Understandings(MOU) for City Hall, Public Works Maintenance Facility and miscellaneous facilities. The Building and Equipment Replacement Program (BERP) collects and administers individual department BERP contributions. As replacement projects are scheduled for implementation, the City Architect will assist with procuring bids and completing the work. The City Architect will also perform facility inspections on an annual basis to evaluate BERP components.
City of Lee’s Summit Annual Budget FY16
180 | P a g e
City of Lee’s Summit Annual Budget FY16
181 | P a g e
City of Lee’s Summit Annual Budget FY16
182 | P a g e
FLEET OPERATIONS FUND The Fleet Operations Fund is an Internal Service Fund. Internal Service Funds are used to account for the financing on cost-reimbursement basis of goods or services provided by one department to other departments within the same governmental organization. The Fleet Operations Fund is comprised of two parts, first the Vehicle Replacement Fund (VERP) which provides motor vehicle fleet replacement services to the various City departments. All City motor vehicles are now owned by this fund. The departments then leases or rent their vehicles at a rate that will provide funds for the replacement of that particular piece of equipment at a scheduled future date. By charging a yearly rate with a technology multiplier, over the life of the equipment, this system enables the City to replace vehicles within efficient lifecycle time frame and not just when funds are available. This will provide all Departments with safe and efficient vehicles throughout the fiscal year while maintaining a steady yearly payment at much lower rates than direct replacement cost. The fund also allows for the ability to capture new technology allowing for lower fuel cost and reduced emissions output. The second part of the Fleet Operations Fund is the Overhead, this fund is comprised of cost for the daily operation which provides twenty four hour service to all using departments, Fleet Operations provides all maintenance and repairs to over four hundred pieces of equipment, and our mission is to provide the best service and staff by partnering with departments and vendors to effectively monitor and ensure the most cost effective repair and replacement of vehicles and equipment. With effectively monitoring repairs and maintenance schedules the Fleet Division is committed to providing the most cost effective service while recognizing the value of the ever changing field and capitalizing on changing technology. The overhead fund is provided by charging a weighted percentage of operational overhead costs based on a three year average of the work order hours generated by the using department. The established maintenance program has also yielded longer useful life and higher resale values.
City of Lee’s Summit Annual Budget FY16
183 | P a g e
City of Lee’s Summit Annual Budget FY16
184 | P a g e
City of Lee’s Summit Annual Budget FY16
185 | P a g e
INFORMATION TECHNOLOGY SERVICES Information Technology Services’ (ITS) mission is to work in partnership with customers to leverage the use of information technologies to meet business challenges and to foster customer self-sufficiency in using those technologies. The functions managed by ITS are: Help Desk – Centralized and coordinated support is delivered via the ITS Help Desk. The Help Desk provides assistance with hardware, software, and phone systems to city staff. This group monitors the city computer environment and dispatches ITS staff to critical system and network events. Coordinates orders for equipment, manages employee computer system access, and provides internal computer training sessions. Network and Desktop Computer Operations – The city network has dedicated connections to 22 city facilities via fiber, a high speed wireless network and leased lines. Remote communication is provided for staff to connect externally via the Internet, as well as outbound access to the Internet for web and email, Jackson County system access and public safety networks (City of Kansas City, State of Missouri and NCIC). The wireless network has been expanded to laptops utilizing leased wireless cards for management team, public safety and other critical laptops utilized by city staff. The ITS supports and maintains network devices as well as the infrastructure of copper and fiber cables, circuits, hubs, routers, bridges and switches necessary to provide communications between these locations. Technology Planning and Internal Consulting – ITS staff works with departments to assess, define and identify needs and research, and develop and implement solutions to meet those demands. ITS Services Coordinators are assigned as a resource for the coordination of technical support services within each department. The coordinator assists with effectively and efficiently navigating ITS related processes and services and is the departments advocate in escalating service needs and evaluating new technology requests to meet business process needs. ITS Services Coordinator are knowledgeable about department’s unique business processes, strategic goals and objectives, and technology needs – and are empowered to provide assistance needed to succeed in technology-assisted endeavors. Applications Administration - ITS provides administration and end user support for all applications within the city. This group manages over 130 desktop, network, and AS/400 software products are used by the city departments. ITS provides the design, installation, configuration, vendor coordination, end user training and support, installation of upgrade, development of interfaces as required, and application troubleshooting. Application Administrators also serve as liaisons between end user and vendor by bridging the gap between technology and business process. Project Management - Project Management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives. ITS developed and uses a defined Project Management Process to manage all project activities including: clearly defining the project’s scope, schedule, & cost; devising a solution to meet the requirements, City of Lee’s Summit Annual Budget FY16
186 | P a g e
including all people, process, technology, & support aspects; configuring or creating the desired solution; testing the solution and ensuring readiness for implementation; and implementing the solution and any required process changes. Project managers are responsible for ensuring successful execution of the process by controlling issues and risks, communicating project goals and status, and directing internal and external resources in executing tasks on the project timeline. Geographic Information Systems Administration - As the central coordinator of the city Geographic Information System (GIS), the ITS team provides management of the database, map layers, software and related components. ITS defines standards for GIS data and fulfills internal and external requests for data by providing maps and reports. GIS staff maintains the central GIS data to ensure maps are updated with accurate and timely information. The GIS staff continues to advance the integration of maps into city business to better support daily operations and decision making processes. Communications System Administration – Communication group is responsibility for supporting the phone and voice mail systems. The system includes over 600 phone voice/data lines and related equipment. These responsibilities include coordinating all phone related moves, additions and changes. In addition this group monitors and manages the phone related hardware and software located through city facilities. Communications also includes the email and calendar system utilized by employees to communicate and organize meetings with internal and external contacts. This includes the archiving of email communications and the filtering of unwanted spam emails. In addition this group manages the integration of mobile smart phones to provide city management instant access to email and calendars. Audio/Visual Services – The Local Government Access Channel broadcasted on AT&T, Comcast and Time Warner is managed by ITS. The channel provides information concerning local government activities, services and policies to the citizens of Lee’s Summit. The channel increases the public awareness of the activities of the legislative and administrative bodies of city government and other governmental entities. The channel is also used to facilitate emergency information to the general public. In addition the Audio Visual technology utilized throughout city facilities for meetings, digital signage, security and video production is supported by this central group. Depreciation - In accordance with GAAP-based budgeting, the ITS Fund includes a charge for the noncash depreciation expense to better match how much of the assets have been depreciated in a particular year. Although the capital outlay and bond principal redemption is a reallocation of current assets, an amount for these appear in this budget for informational and cash flow purposes only.
City of Lee’s Summit Annual Budget FY16
187 | P a g e
City of Lee’s Summit Annual Budget FY16
188 | P a g e
City of Lee’s Summit Annual Budget FY16
189 | P a g e
City of Lee’s Summit Annual Budget FY16
190 | P a g e
Water Utilities The Water Utilities Department serves over 35,000 customers. The total water supply has increased to 27.5 million gallons per day (MGD) with the completion of the third phase of the Jackson Cass Transmission Main with Kansas City. Lee’s Summit has contractual supply of 21 MGD from the City of Kansas City, Missouri and 7.5 MGD from the City of Independence, Missouri. Water demands increased considerably in the summer of 2012 due to hot and dry weather conditions. Water restrictions were enacted due to the failure of one of the major connections with Kansas City in July. Customer cooperation to alternate irrigation schedules allowed for storage levels to reach stable conditions and allowed for restrictions to be lifted. The City of Lee’s Summit and Little Blue Valley Sewer District have a contractual agreement for ongoing treatment and pumping within the Little Blue Valley drainage basin to accommodate existing and future customers within Lee's Summit. In order to maximize capacity of the sanitary sewer system, Water Utilities continues to focus on Inflow and Infiltration (I&I) reduction programs. The Water Utilities Department completed a Strategic Plan for the Utility in December of 2011, which was the result of a comprehensive assessment and strategic planning process involving the Utility’s stakeholders. The Plan specifically addressed a need to improve customer understanding and relations; to develop a program for the renewal of existing aged infrastructure; to establish appropriate policies to address financial challenges; and to proactively address long-term needs to ensure a sustainable utility. The Plan will also position the utility to be responsive to the impact of regulatory and economic factors that are affecting the utility today and in for the foreseeable future. In 2012 the Utility began implementing the Plan’s recommendations; the establishment of the Water Utilities Advisory Board to ensure customer input on the direction of the Utility; an online customer account system that offers ebilling and more details about their monthly bills; a new position to focus on community relations; and a financial plan including a rate schedule to support a sustainable utility.
City of Lee’s Summit Annual Budget FY16
192 | P a g e
City of Lee’s Summit Annual Budget FY16
193 | P a g e
City of Lee’s Summit Annual Budget FY16
194 | P a g e
City of Lee’s Summit Annual Budget FY16
195 | P a g e
City of Lee’s Summit Annual Budget FY16
196 | P a g e
SOLID WASTE MANAGEMENT FUND The Solid Waste Management Fund accounts for all revenues and expenses related to the City's Resource Recovery Park. The Resource Recovery Park, which operates on a six-day per week schedule, encompasses an area of approximately 275 acres including a 80 acre sanitary landfill, a four acre yard waste composting facility, a one acre drop-off recycling center, and a Household Hazardous Waste disposal area. An additional 80 acres of the site is set aside as a soil borrow area while the remainder of the property serves as a buffer from the abutting property owners. A Solid Waste Superintendent, Site Supervisor, ten full time employees, and two part-time employees staff the Solid Waste Division of the Public Works Department. Staff is responsible for day to day operations for municipal solid waste disposal, composting, brush collection and drop-off recycling. Household hazardous waste facilities and compost-loading facilities also enhance customer service. Staff must continue regular operations during all weather conditions; all possible efforts are expended to ease access to the different facilities. Customer service receives high priority in the Solid Waste Division. Customer awareness is provided through the distribution of recycling information and instructions for safe alternatives for disposal of hazardous household waste, recycling, solid waste and yard waste. Tipping fees for municipal solid waste, yard waste, and the sale of compost and mulch, generates fund revenue. Governed by state law, as well as City ordinance, yard waste cannot be placed in the sanitary landfill. Although no fees are charged for dropping off recyclables at the recycling center, the fund does generate limited revenue from the sale of specific recyclable items. This facility is subsidized from the Solid Waste Fund. A general and administrative fee is paid to the City's General Fund to recover indirect expenses incurred by General Fund staff, including the Public Works Engineering, Finance, Human Resources and Law Departments. The fee is calculated based upon General Fund Department usage. In accordance with GAAP based budgeting, the Solid Waste Management Fund is reported as an enterprise fund. The non-cash expense of depreciation/depletion is recorded to show how much of the facility has been consumed. Although capital outlay and bond principal redemption is a reallocation of current assets, amounts for these appear in this budget for informational and cash flow purposes only. The plan approved by the voters and City Council in 1994 provided for a 20-year life expectancy at 350 tons per day while maintaining suitable revenues sufficient to offset expenses. The sanitary landfill complies with applicable Federal Environmental Protection Agency and Missouri Department of Natural Resources regulations relating to closure/post closure.
City of Lee’s Summit Annual Budget FY16
197 | P a g e
City of Lee’s Summit Annual Budget FY16
198 | P a g e
City of Lee’s Summit Annual Budget FY16
199 | P a g e
City of Lee’s Summit Annual Budget FY16
200 | P a g e
AIRPORT FUND
The Airport Operating Fund is an enterprise fund that accounts for all revenues and expenses related to the municipally owned airport. The Lee's Summit Municipal Airport is designated by the Federal Aviation Administration (FAA) as a reliever airport for the Kansas City metropolitan area and as such is designed to reduce congestion at larger air carrier airports by providing general aviation pilots with alternate landing facilities. It is further classified as a general aviation utility airport serving planes with gross weights of less than 30,000 lbs. and landing speeds less than 121 knots. The airport is equipped with two runways: a 4,016 ft North/South (18-36), and a 3,800 ft Crosswind (11-29). Following recommendation in the 2010 adopted Airport Business Plan the City has initiated an engineering contract for services to provide the design work for the first phase of development involving the grading for a 1,285-foot extension to the south. This work is being performed with the assistance of federal and state aviation grants. In conjunction with the completed Preliminary Development Plan (PDP) for the eastside terminal area city staff has continued to work with several parties interested in developing facilities in this area. Airport fund revenues are generated through the sale of aviation fuel, navigational charts and pilot supplies, the leasing of 75 tie-down spaces, 40 open T-hangar spaces and 113 enclosed hangar spaces and six ground leases for privately owned hangars. Outstanding debt consists of an inter-fund loan from the General Fund. The inter-fund loan was used to refund prior debt issues that were at significantly higher interest rates. This inter-fund loan is being repaid on a monthly basis over the next five years at a fixed interest rate of 1%. The Airport Fund is accounted for as enterprise fund and utilizes Generally Accepted Accounting Principles (GAAP) based budgeting. This requires that the accrual basis of accounting method is used to record revenues and expenditures. Although capital outlay and bond principal redemption is a reallocation of current assets, amounts for these transactions appear in this budget for informational and cash flow purposes only.
City of Lee’s Summit Annual Budget FY16
201 | P a g e
City of Lee’s Summit Annual Budget FY16
202 | P a g e
City of Lee’s Summit Annual Budget FY16
203 | P a g e
SHORT-TERM DISABILITY FUND YEAR BEGINNING JULY 1, 2015 FY 2010 ACTUAL
FY 2011 ACTUAL
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
FY 2016 Proposed
62,828
33,377
31,485
32,372
30,682
38,843
38,843
33,736
258
492
243
396
197
485
485
0
63,086 $
33,869 $
31,728 $
32,768 $
30,879 $
39,328 $
39,328 $
33,736
19,882 -
36,152 -
30,914
22,306
7,874
32,954 -
32,954 -
33,533 -
19,882 $
36,152 $
30,914 $
22,306 $
7,874 $
32,954 $
32,954 $
33,533
43,204
(2,283)
Fund Balance, Beginning o$
39,282 $
82,486 $
Fund Balance, End of Year $
82,486 $
80,203 $
FY 2015 PROJECTED BUDGET
REVENUES: Charges for services Transfers Interest Total Revenues
$
EXPENDITURES: Claims Other Total Expenditures
$
Excess of Revenues Over (Under) Expenditures
814
10,462
23,005
6,374
6,374
80,203 $
81,017 $
81,017 $
91,479 $
203
91,479 $
114,484 $
114,484 $
120,858
114,484 $
120,858 $
120,858 $
121,061
This fund was established to provide compensation to full-time City employees who are incapacitated and who have exhausted all paid time, but are not yet eligible for long-term disability benefits. Beginning July 1, 2009 the short-term disability policy was updated stating all earned time, including vacation and personal, must be exhausted before Short-term disability is available. The 2009-10 Actual claims of $19,882 represents the transition year, and it is anticipated claims will spike as paid time off is exhausted. The Fiscal Year 2015-16 contribution rate of $50 per Full-time Employee experienced no change from the Fiscal Years 2012-13 or 2013-2014 contribution rate. Interest revenues have been estimated at an average rate of 1% for fiscal year 2010-11 and 0.5% for fiscal year 2012-13. The target fund balance is 200% of paid claims.
REVENUES, EXPENDITURES & FUND BALANCE
Revenues
Expenses
Fund Balance
$140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
204 | P a g e
CLAIMS AND DAMAGES RESERVE TRUST FUND YEAR BEGINNING JULY 1, 2015 FY 2011 ACTUAL Revenues: Refunds Premiums Transfer in: Other Funds Interest Income Miscellaneous Total Revenues
$
Expenditures: Transfers Out Special Assessments Transfer Out Claims and Professional expenses Professional Fees Enterprise Resource Planning (ERP) Total Expenditures
$
Excess of Revenues Over (Under) Expenditures
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
BUDGET
FY 2015 PROJECTED
FY 2016 Proposed
10,485
75,000
75,000
150,000
150,000
150,000
896,977
5,883 -
655
820
11,398
433 -
433 -
500 -
75,655 $
75,820 $
161,398 $
150,433 $
150,433 $
897,477
16,368 $
120,898 1,500,000
41,724 -
113,252 -
193,211 -
150,000 -
150,000 -
875,000 -
1,620,898 $
41,724 $
113,252 $
193,211 $
150,000 $
150,000 $
875,000
(1,604,530)
33,931
(37,432)
(31,813)
433
433
22,477
0
0
0
0
0
0
0
Transfers: Transfer In: Excess Worker's Comp Fund Balance Fund Balance, Beginning of Year
$
1,656,765 $
52,235 $
86,166 $
48,734 $
16,921 $
16,921 $
17,354
Fund Balance, End of Year
$
52,235 $
86,166 $
48,734 $
16,921 $
17,354 $
17,354 $
39,831
The Claims and Damages Reserve Fund accounts for expenses associated with liability and property claims. Claims from all City departments up to the City’s self insured retention of $50,000 per occurrence are paid from the fund. Funding is determined through loss history to cover anticipated claims and damages expenses each budget year. City departments contribute a baseline amount of $5,000 to the fund annually, which accounts for $75,000. The remaining amount, currently established at $75,000, is funded through claims history analysis. Each department with claims history for the past three years is assigned a pro-rata share of the remaining $75,000.00. This method assures contribution from all City departments while assessing risk costs appropriately based on actual losses incurred.
REVENUES, EXPENDITURES & FUND BALANCE
Revenues
$1,800,000
Expenses
Fund Balance
$1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
City of Lee’s Summit Annual Budget FY16
ACTUAL FY 2014 FISCAL YEAR
BUDGET FY 2015
PROJECTED
Proposed FY 2016
205 | P a g e
WORKERS COMPENSATION SELF-INSURANCE YEAR BEGINNING JULY 1, 2015 FY 2012 ACTUAL REVENUES: Other Revenue/Refunds Premiums Interest Transfers In Total Revenues
FY 2013 ACTUAL
FY 2014 ACTUAL
BUDGET
FY 2015 PROJECTED
FY 2016 Proposed
FY 2017 Projected
FY 2016 Projected
FY 2018 Projected
10,104 $ 404,603 11,363
8,570 $ 422,007 15,188
8,170 $ 460,698 10,890 $
$
426,070 $
445,765 $
479,758 $
$
443,612 $ 20,461 128,964
569,729 $ 239,204 40,055 117,627
169,882 $ 82,719 34,871 162,985
$
593,037 $
966,615 $
450,457 $
29,301
(7,489)
(7,489)
(17,193)
2,157
2,157
Fund balances, Beginning of Year
$
1,689,374 $
1,522,407 $
1,001,557 $
1,030,858 $
1,030,858 $
1,023,369 $
1,006,176 $
1,008,333 $
1,010,490
Fund balances, End of Year
$
1,522,407 $
1,001,557 $
1,030,858 $
1,023,369 $
1,023,369 $
1,006,176 $
1,008,333 $
1,010,490 $
1,012,647
$
EXPENDITURES: Claims and Expenses Prior Year Claim Settlements Professional Fees and Administrative Costs Insurance (Excess and State Fees) Prior Period Adjustment Total Expenditures Excess of Revenues Over (Under) Expenditures
(166,967)
(520,850)
895,591 3,338 $ 898,929 $
895,591 3,338
904,402 7,757
904,402 7,757
904,402 7,757
904,402 7,757
898,929 $
912,159 $
912,159 $
912,159 $
912,159
651,462 $
651,462 $
653,652 $
40,000 214,956
40,000 214,956
30,000 245,700
675,795 $ 50,000 32,696 151,511
675,795 $ 50,000 32,696 151,511
675,795 50,000 32,696 151,511
906,418 $
906,418 $
929,352 $
910,002 $
910,002 $
910,002
2,157
This fund was established to account for the monies necessary to self-insure the City's Workers Compensation claims. In January 2011, an actuarial analysis identified the following: - Self-insured retentions (beginning fund balance): FY 13-14 $643,918 (discounted reserves at 90% confidence, Bornhuetter-Ferguson technique*); - Funding (total revenues); discounted funding at 90% confidence); FY 10-11 $729,656, FY 11-12 $759,061, FY 12-13 $789,652; FY13-14 $649,616; FY14-15 $675,795 The continuing efforts to reduce frequency of claims and contain claim costs through negotiated discounts on medical expenses and using modified duty return to work resulted in lower overall damages and claims expense.Included in expenses is a line item for prior year claim expense. Professional Fees and Administrative Costs include state-required third party administrative fees and expenses for the discounted medical health provider network. The Insurance expense line includes the state required Self-Insurer Bond, Excess Insurance coverage Premium, Worker's Comp Tax and the 2nd Injury Fund Surcharge. Funding for upcoming and each year premiums (amounts assessed to departmental budgets) are adjusted to bring the fund balance in line with the projected retentions. Premium amount is divided into departments based on prior year's percentage of use. Premiums for fiscal year 2011-2012 increased $49,478 from the fiscal year 2010-2011 budget. No premium increase was budgeted for fiscal year 2012-2013. Interest revenues have been estimated at an average rate of 1% for Fiscal Year 2012 and .75% for fiscal year 2013. Beginning in FY15, Workers Compensation budget amounts were calculated to recover all projected costs. This was done to maintain the current fund balance and reserves. *Bornhuetter-Ferguson technique estimates ultimate losses using a combination of expected losses (payroll x expected loss cost) and loss development techniques
REVENUES, EXPENDITURES & FUND BALANCE REVENUES: EXPENDITURES: Fund Balance
$1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014
BUDGET FY 2015
PROJECTED
Proposed FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
206 | P a g e
UNEMPLOYMENT TRUST FUND YEAR BEGINNING JULY 1, 2015 FY 2012 ACTUAL Revenues: Premiums Special Assessment Interest Total Revenues Expenditures: Claims paid Third Party Administrator Expense Total Expenditures
$
FY 2013 ACTUAL
23,186 $
-
751
FY 2014 ACTUAL $
-
922
646
FY 2015 BUDGET PROJECTED $
FY 2016 Proposed
FY 2015 Projected
FY 2016 Projected
FY 2017 Projected
25,823
20,353
25,823
25,823
25,823
483
483
315
483
483
483
25,823 $
$
23,937 $
922 $
646 $
26,306 $
26,306 $
20,668 $
26,306 $
26,306 $
26,306
$
27,656 $ 1,740
25,434 $ 1,305
38,580 $ 2,070
32,791 $ 1,740
32,791 1,740
30,557 1,705
32,191 1,740
32,191 1,740
32,191 1,740
$
29,396 $
26,739 $
40,650 $
34,531 $
34,531 $
32,262 $
33,931 $
33,931 $
33,931
(7,625)
(7,625)
(7,625)
Excess of revenues over (under) expenditures
(5,459)
(25,817)
(40,004)
(8,225)
(8,225)
(11,594)
Fund balance, beginning of year
$
135,409 $
129,950 $
104,133 $
64,129 $
64,129 $
55,904 $
44,310 $
36,685 $
29,060
Fund balance, end of year
$
129,950 $
104,133 $
64,129 $
55,904 $
55,904 $
44,310 $
36,685 $
29,060 $
21,435
This fund was established to provide a self-insurance mechanism to fund liabilities related to unemployment claims filed by former City employees. Fiscal year 2014-15 maintains funding at $30 annually per employee and seasonal employees at $5 per month employed. Interest has been calculated for fiscal year 2015-16 at .5% on the fund balance at the end of the preceding fiscal year.
REVENUES, EXPENDITURES & FUND BALANCE Revenues Expenditures Fund Balance
$150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014
BUDGET FY 2015
PROJECTED
Proposed FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
207 | P a g e
10: Debt Service Funds General
DEBT SERVICE FUNDS The city utilizes three funds to record the receipt and disbursement of monies used to repay principal and interest charges on city issued debt. The following are the three funds used to record this activity: General Obligation Bonds, Northeast Tax Increment Financing (TIF) District Infrastructure Improvement Bonds, and Park Certificate of Participation (COP) Debt Fund. The General Obligation Debt Service Fund is used to account for the annual retirement of bonds issued from 2003 through 2010. Expenditures from this fund include the payment of interest and fiscal agent charges plus the scheduled repayment of the principal balance. The ad valorem tax on real and personal property provides the primary source of revenue to make these semiannual payments. Interest income on investments of the reserve amounts provides the remainder of revenue. The Park COP Debt Service Fund was established to account for the issuance of COPs related to Legacy Park, the Greenway Project, and the Senior Center. This fund receives the revenues generated by the one-fourth cent "Parks & Soils" sales tax. The Northeast Tax Increment Financing District Fund is where incremental property taxes (related to the improvements made on the property after the TIF district was formed) received on the designated parcels within the TIF district are used to make principal and interest payments on the city’s debt issued to construct streets and sanitary sewers in the district. The basis of accounting is the same for both budgeting and GAAP reporting purposes. This requires that the modified accrual method bases, with the revenues being recorded when measurable and available, and expenditures being recorded when the liability is incurred. Revenues susceptible to accrual are sales taxes, economic activity taxes, property taxes and interest revenue.
City of Lee’s Summit Annual Budget FY16
209 | P a g e
10: Debt Service Funds General
GENERAL OBLIGATION DEBT SERVICE FUND YEAR BEGINNING JULY 1, 2015
FY 2011 ACTUAL REVENUES: Taxes (Net Bad Debt) Interest Penalty/Interest Bond Proceeds Refunds & Reimbursements Transfer In Total Revenues EXPENDITURES: County Collection Fees Debt Service: Principal Retirement Interest & Fiscal Charges Total Expenditures
$
FY 2012 ACTUAL
7,781,541 $ 63,179 36,487
7,601,638 $ 58,147 43,210
$
0 874,981 8,756,188 $
0 0 7,702,995 $
$
133,561 $
130,044 $
$
Excess of Revenues Over (Under) Expenditures
FY 2013 ACTUAL
FY 2014 ACTUAL
FY 2015 BUDGET
8,027,401 $ 59,848 39,293 15,659,417 4,937
7,909,356 $ 62,163 16,547 82,461 544
8,033,772 $ 160,000 40,000
8,033,772 $ 160,000 40,000
8,162,690 45,000 41,250
23,790,896 $
8,071,071 $
8,233,772 $
8,233,772 $
8,248,940
132,284 $
135,153 $
143,000 $
143,000 $
140,603
6,630,000 1,195,776
6,600,000 1,079,180
21,660,000 1,187,203
6,200,000 1,543,570
6,500,000 1,650,000
6,500,000 1,650,000
7,959,337 $
7,809,224 $
22,979,487 $
7,878,723 $
8,293,000 $
8,293,000 $
11,091,013
(59,228)
(59,228)
(2,842,073)
6,767,235 $
6,767,235 $
6,708,007
6,708,007 $ 6,708,007 $ 252,231 0 0.03241402 0.00000000
3,865,934 128,918 0.01604701
796,851
(106,229)
811,409
192,348
Fund Balances, Beginning of Year
$
5,072,856 $
5,869,707 $
5,763,478 $
6,574,887 $
Fund Balances, End of Year
$
5,869,707 $
5,763,478 $
6,574,887 $
6,767,235 $
DEBT SERVICE LEVY
FY 2016 Adopted
PROJECTED
2010-11 Actual
2011-12 Actual
2012-13 Actual
2013-14 Actual
2014-15 Budget
2014-15 Estimated
9,500,000 1,450,410
2015-16 Estimated
Per $100 Assessed Valuation
$
0.4697 $
0.4697 $
0.4697 $
0.4697 $
0.4697 $
0.4697 $
0.4697
Assessed Valuation
$
1,691,947,638 $
1,638,048,497 $
1,638,048,497 $
1,692,175,370 $
1,673,326,189 $
1,673,326,189 $
1,702,826,668
$ Growth
$
36,914,994 $
(53,899,141) $
36,461,607 $
54,126,873 $
35,277,692 $
35,277,692 $
29,500,479
% Growth
2.23%
-3.19%
2.23%
3.30%
2.13%
2.11%
1.76%
Allowance for Uncollectables
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
The General Obligation Debt Service Fund is used to account for the annual debt service on General Obligation (GO) bonds issued by the City. Expenditures from the fund include the payment of interest and fiscal agent charges plus the scheduled repayment of the principal balance. The ad valorem tax on Real and Personal Property provides the primary source of revenue to make these annual payments. Interest income on the reserve amounts provides the remainder of revenue.
$5,000,000 of debt was issued in both December 2009 and December 2010. Additional debt issuance is anticipated in FY 2011-12 as authorized in the November 2007 election. $10,075,000 in bonds authorized but not yet issued will be issued over the next 2 years (not included in the above projections). $37.4 million of new bonds were authorized on November 2, 2010 and are anticipated to be issued over the next 3 years (also not included in the above projections). In April 2013, voters approved a $7.5m bond issue for a cultural arts campus and downtown street improvements. Interest Revenue has been calculated at an annual rate of 1% for Fiscal Year 2013-14 and .5% for 2014-15.
REVENUES, EXPENDITURES & FUND BALANCE Revenues
$25,000,000
Expenditures
Fund Balance
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
City of Lee’s Summit Annual Budget FY16
ACTUAL FISCAL FYYEAR 2014
BUDGET FY 2015
PROJECTED
Adopted FY 2016
210 | P a g e
10: Debt Service Funds General
DEBT SERVICE REQUIREMENTS TO MATURITY General Obligation Bonds PUBLIC SAFETY Radios & Design
DATED 6/1/11 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
CURBS
STREETSCAPE Refunding 2013B
CITY HALL STORM WATERPUBLIC SAFETY Refunding Police Facilty 2013B 2013A 2013A
DATED 6/1/11
DATED 2/1/13
DATED 2/1/13
DATED 2/1/13
2,200,000 2,300,000
245,000 245,000 180,000 160,000 85,000 85,000 100,000 87,000
1,090,000 1,130,000 1,170,000 1,230,000 1,285,000 1,325,000 1,405,000 1,453,000
320,000 280,000 825,000 825,000 490,000 520,000 520,000
CURBS 2013A
DATED 2/1/13
DATED 2/1/13
2,645,000 1,715,000 1,225,000 2,850,000 2,925,000
TOTAL
$0
$4,500,000
$1,187,000
$10,088,000
$3,780,000
$7,000,000
$4,360,000
Interest Rates
2.00%-3.00%
2.00-3.00%
3.00-4.00%
3.00%-4.00
2.00%-3.00%
2.00%-3.00%
2.00%-3.00%
Pryor Road
Strother
Highway 50
Storm Water
TUDOR ROAD Strother RoadOrchard Street
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
2013A
2013A
2013C
2013C
2015A
2015A
2015A
DATED 2/1/13
DATED 2/1/13
DATED 10/24/13
DATED 10/24/13
DATED 10/24/13
DATED 10/24/13
DATED 10/24/13
380,000 405,000 415,000 440,000 470,000 495,000
260,000 260,000 260,000 255,000 365,000
100,000 100,000 300,000
180,000 110,000 130,000 480,000
465,000 465,000 465,000
$2,605,000
$1,400,000
$500,000
$900,000
$1,395,000
3.00%-5.00%
2.00%-3.00%
2.00%
2.00%
345,000 355,000 355,000 455,000
450,000
990,000 1,550,000
$2,500,000
$2,000,000
2.00%-3.00% 2.00%-3.00% 3.00%-5.00%
PAYMENTS DURING FY
FOR ALL GENERAL OBLIGATION BONDS PRINCIPAL INTEREST
TOTAL
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
6,210,000 5,140,000 5,295,000 3,545,000 3,690,000 3,040,000 2,780,000 2,380,000 2,445,000 2,645,000 2,705,000 2,775,000 2,850,000 2,925,000
1,433,370 1,424,850 1,270,150 1,087,300 975,300 821,200 699,600 592,200 505,750 417,000 337,650 256,500 172,250 87,750
7,643,370 6,564,850 6,565,150 4,632,300 4,665,300 3,861,200 3,479,600 2,972,200 2,950,750 3,062,000 3,042,650 3,031,500 3,022,250 3,012,750
TOTAL
$42,215,000
$8,647,500
$50,862,500
BALANCE @6/30
42,215,000 37,075,000 31,780,000 28,235,000 24,545,000 21,505,000 18,725,000 16,345,000 13,900,000 11,255,000 8,550,000 5,775,000 2,925,000 0
2015 amounts not included in totals for General Obligation Bonds.
City of Lee’s Summit Annual Budget FY16
211 | P a g e
10: Debt Service Funds General
City of Lee's Summit, Missouri Computation of Legal Debt Margin June 30, 2015 General Obligation Bonds Ordinary (1)
City Hall 2013 (orig 2003) Downtown Streets 2013(orig 2003) Police Station Storm Water, 2013A Curbs 2011 Curbs 2013A Tudor Road 2013A Strother 2013A Road Imp (Orchard & Pryor) 2013C 50 Highway and 291 Highway 2015A Storm Water 2015A Strother 2015A
Additional (2)
10,088,000 1,187,000 7,000,000 3,780,000 4,500,000 4,360,000 2,500,000 2,000,000 4,005,000 900,000 1,395,000 500,000
Total
10,088,000 1,187,000 7,000,000 3,780,000 4,500,000 4,360,000 2,500,000 2,000,000 4,005,000 900,000 1,395,000 500,000
Authorized But Unissued Amounts Weather Radios ( 75,000 Unissued) Tudor Road 2010 (7.37 MM Unissued) Storm Water, 2008 ($105,000 Unissued) Strother View High ($1.0MM Unissued) 50 highway and 291 Highway($8.6 MM Unissued) Road Imp (Orchard & Pryor) ($595,000 Unissued) Cultural Arts (Unissued)
75,000 7,370,000 105,000 1,000,000 8,600,000 595,000 63,000
General Obligation Debt by Project City Hall 2013 (orig 2003) 2%
3% 1%
Downtown Streets 2013(orig 2003)
9%
Police Station
24%
Storm Water, 2013A 5%
Curbs 2011 Curbs 2013A
6% 3%
Tudor Road 2013A Strother 2013A Road Imp (Orchard & Pryor) 2013C
10% 17%
50 Highway and 291 Highway 2015A Storm Water 2015A
11% 9%
Total Authorized at 6-30-15 Unissued Total Issued and Outstanding
City of Lee’s Summit Annual Budget FY16
Strother 2015A 17,226,000
42,797,000
60,023,000 (17,808,000) 42,215,000
212 | P a g e
10:General Debt Service Funds
City of Lee's Summit, Missouri Computation of Legal Debt Margin June 30, 2015 General Obligation Bonds Ordinary (1)
Additional (2)
Total
Assessed Valuation (January 1, 2014) Constitutional debt limit
$1,649,484,163 $
General Obligation bonds payable includes authorized but unissued Less: Cash and Securities Available for Retirement Bonds Payable less Available Funds LEGAL DEBT MARGIN
$
164,948,416
164,948,416
329,896,834
17,226,000
42,797,000
60,023,000
2,107,974 15,118,026
5,237,139 37,559,861
7,345,112 52,677,888
149,830,390
127,388,555
277,218,946
Legal Debt Margin June 30, 2015
5%
11%
Additional
Debt Margin
Ordinary 84%
NOTES:
(1) Article VI, Sections 26 (b) and (c) of the State Constitution permits the City, by vote of two-thirds of the voting electorate, to incur an indebtedness for City purposes not to exceed 10% of the taxable tangible property therein as shown by the last completed assessment. (2) Article IV, Sections 26(d) and (e) of the State Constitution provides that the City may become indebted not exceeding in the aggregate an additional 10% for the purpose of acquiring rights-of-way, constructing, extending and improving streets and avenues and/or sanitary or storm systems, and purchasing or constructing waterworks, electric or other light plants, provided that the total general obligation indebtedness of the City does not exceed 20% of the assessed valuation. (3) The total assessed valuation shown above does not include state assessed railroad and utility properties.
City of Lee’s Summit Annual Budget FY16
213 | P a g e
10:General Debt Service Funds PARK CERTIFICATE OF PARTICIPATION DEBT SERVICE FUND YEAR BEGINNING JULY 1, 2015 FY 2010 ACTUAL Revenues: Sales Taxes Economic Activity Taxes (EATS) Interest Transfers In Total Revenues Expenditures: Transfer to Gamber Ctr (201) Transfer to General Fund Transfer to Greenway Fund Transfer to Park Dev (327) Debt Service: Principal Retirement Interest & Fiscal Charges Total Expenditures
FY 2011 ACTUAL
FY 2012 ACTUAL
FY 2013 ACTUAL
FY 2014 ACTUAL
FY 2015 BUDGET PROJECTED
FY 2016 Adopted
$ 2,862,358 $ (331,991) 1,849 -
3,056,886 $ (377,262) 3,837 -
3,169,317 $ (394,228) 7,411 505,794
3,080,479 $ (14,229) 5,930 1,709,500
3,321,232 $ (141,266) 16,235
3,362,797 $ (146,230) 2,500 -
3,362,797 $ (146,230) 2,500 -
3,661,528 (158,813) 3,500 -
$ 2,532,216
$
2,683,461
$
3,288,294
$
4,781,680
$
3,196,201
$
3,219,067
$
3,219,067
$
3,506,215
$
175,000 500,000 1,465,000 677,380
$
157,500 1,650,000 618,724
$
175,000 1,000,000 161,250 1,050,000 548,484
$
175,000 750,000 161,250 600,000
$
175,000 1,000,000 200,000
$
175,000 750,000 2,330,000 387,213
$
175,000 750,000 2,330,000 387,213
$
175,000 1,800,000 1,497,000 90,535
$ 2,817,380
$
2,426,224
$
2,934,734
$
$
3,642,213
$
3,642,213
$
3,562,535
Excess of Revenues Over (Under) Expenditures
(285,164)
257,237
1,390,000 504,333
353,560
3,580,583
1,370,000 450,770 $
3,195,770
1,201,097
431
(423,146)
(423,146)
(56,320)
Fund Balances, Beginning of Year
$
838,763
$
553,599
$
810,836
$
1,164,396
$
2,365,493
$
1,164,396
$
1,164,396
$
741,250
Fund Balances, End of Year
$
553,599
$
810,836
$
1,164,396
$
2,365,493
$
2,365,924
$
741,250
$
741,250
$
684,930
The Park Certificate of Participation (COP) Debt Service Fund was established to account for the issuance of debt related to the acquisition of land and development of Legacy Park and Greenway Projects. This fund receives the revenues generated by the 1/4 cent "Parks & Soils" sales tax. This sales tax was reduced from 3/8 cent to 1/4 cent in April 2008 as approved by the voters. In 2006, the City issued debt relating to the new plan for the parks system, "Legacy for Tomorrow and Beyond." The amount of money required for debt service on the 2006 COPs during the current fiscal year is retained in this fund, and monies in excess of that amount may be transferred to the city park construction funds. Interest earnings are calculated at 1% for Fiscal Year 2013-14 and .5% for 2014-15, based on the retention in this fund of only the monies required for the current year's debt service with all additional amounts being transferred to the City Park Fund 057.
REVENUES, EXPENDITURES & FUND BALANCE
Revenues
$5,250,000
Expenditures Fund Balance
$4,500,000
$3,750,000
$3,000,000
$2,250,000
$1,500,000
$750,000
$ACTUAL FY 2010
ACTUAL FY 2011
ACTUAL FY 2012
ACTUAL FY 2013
ACTUAL FY 2014
BUDGET FY 2015
PROJECTED
Adopted FY 2016
FISCAL YEAR
City of Lee’s Summit Annual Budget FY16
214 | P a g e
APPENDIX Accrual Accounting: A method of accounting that recognizes the financial effect of transactions, events and inters fund activities when they occur, regardless of the timing of related cash flows. Amortization: 1) A reduction of debt by means of periodic payments sufficient to meet current interest and liquidate the debt at maturity. 2) Provision for the extinguishment of a debt by means of a debt service fund. 3) Accounting for expenses or charges as they apply rather than as they are paid. Arbitrage: Arbitrage is the difference (profit) earned from investing low- yielding tax-exempt bond proceeds in higher yielding taxable securities. Assessments: Assessments are charges in the nature of taxes upon property owners to pay the costs of facilities or improvements that benefit the property owned. Payment of the amount assessed (together with interest if not paid upon assessment) is secured by a direct fixed lien on the property. The assessed payments are either used directly to pay the costs of the facilities or improvements or, if paid over time, are used to repay bonds issued to finance such costs. “Special assessment” financing proceeds are used for improvements relating to the property, such as sidewalks, streets, gutters, sewers and water systems. Assessed Valuation or [AV]: The valuation placed on real estate or other property by a government for the purpose of levying taxes.
Auditing: Pre-Audit: Posting year-end closing entries, preparing preliminary financial statements and assembling supporting documents for review by outside auditors. Auditing: Post-Audit: Posting audit adjustments and preparing the annual financial report. Audit Report: The report prepared by an auditor covering the audit or investigation of an entity’s financial position for a given period of time. As a general rule, the report should include a) a statement of the scope of the audit; b) explanatory comments concerning exceptions from generally accepted auditing standards; c) opinions; d) explanatory comments concerning verification procedures; e) financial statements and schedules; and f) statistical tables, supplementary comments and recommendations. The auditor’s signature follows item c) or d). Authority: A governmental unit or public agency created to perform a single function or a restricted group of related activities. Usually such units are financed from service charges, fees and tolls, but in instances they also have taxing powers. An authority may be completely independent of other governmental units, or in some cases it may be partially dependent upon other governments for its creation, its financing or the exercise of certain powers. Balanced Budget: Annual financial plan in which expenses do not exceed revenues. Bond Counsel: Legal firm hired to advise the Issuer regarding the legal and tax assurance to the bond purchaser that the bond was legally issued and is aspects of the sale. Bond counsel writes the legal opinion for the bond issue. This lawyer, in theory, represents the ultimate bond purchaser.
General Appendix The Bond opinion provides tax-exempt. Generally responsible for producing the legal documents required for the sale.
specify whether the budget under consideration is preliminary and tentative or whether it has been approved by the appropriating body.
Bond Election or Bond Referendum: A process whereby the qualified voters of a governmental unit are given the opportunity to approve or disapprove a proposed issue of municipal securities. An election is most commonly required in connection with general obligation bonds. Requirements for voter approval may be imposed by constitution, statute, or local ordinance.
Callable Bond: A bond which the issuer is permitted or required to redeem before the stated maturity date at a specified price, usually at or above par, by giving notice of redemption in a manner specified in the bond contract.
Bond Fiscal Year: The 12-month accounting period, established under some bond contracts, used in connection with and issue of municipal securities. Principal and interest payments are scheduled in accordance with the bond fiscal year. The bond fiscal year may not necessarily coincide with the issuing agency’s own fiscal year, and may be established in order to take full advantage of the scheduled cash flow of projected pledged revenues. (See also Fiscal Year).
Call Feature (Redemption Feature): Enables the Issuer to pay off “redeem” a bond prior to its maturity date. The “call date” is the earliest date the bond may be redeemed “called”. Usually a premium is paid for the earliest call dates.
Bond Proceeds: The money paid to the issuer by the purchaser or underwriter of a new issue of municipal securities. These monies are used to finance the project or purposed for which the securities were issued and to pay certain costs of issuance as may be provided in the bond contract. Budget (Operation): A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them. Used without any modifier, the term usually indicates a financial plan for a single fiscal year. The term “budget” is used in tow senses in practice. Sometimes it designates the financial plan presented to the appropriating body for adoption and sometimes the plan finally approved by that body. It is usually necessary to City of Lee’s Summit Annual Budget FY16
Call Date: The date on which a bond may be redeemed before maturity at the option of the Issuer.
Capital Assets: Assets of significant value and having a useful life of several years. Capital Assets are also called Fixed Assets. Capital Improvement Program [CIP]: A plan of proposed capital expenditures and the means of financing them. The capital budget is usually adopted as part of the complete annual budget which includes both operations and capital outlays. The capital budgets should be based on a capital improvement program [CIP]. Capital Outlays: Expenditures for the acquisition of capital assets. Capital Projects: Projects that purchase or construct capital assets. Typically a capital project encompasses a purchase of land and/or the construction of a building or facility. Cash Basis: The method of accounting under which revenues are recorded when received and expenditures are recorded when paid. 216 | P a g e
General Appendix
Cash-Flow Budget (Cash Budget): A projection or the cash receipts and disbursements anticipated during given period. Typically, this projection covers a year and is broken down into separate projections for each month, week and/or day during the year. Cash-Flow Financing: A financing in which the proceeds of the issue are used to pay current expenses of the issuer when the issuer’s current income is temporarily insufficient for that purpose. Also, sometimes called TRANS, TANS, or RANS (tax and revenue anticipation notes). The issue is customarily scheduled to be repaid when current income exceeds current expenses. The issue typically has a term of one year or less. Cash Management: Tracking and forecasting cash flow, and working with investment personnel to develop an investment plan. Maintaining cash accounts and controlling their disposition. Coordinating and controlling bank accounts. Certificate of Deposit or CD: A negotiable or nonnegotiable receipt for moneys deposited in a bank or other financial institution for a specified period at a specified rate of interest. Certificate of Participation [COP]: A certificate showing participation through ownership of a “share” of lease payments or lease-purchase agreement. Usually made between a municipality and an equipment vendor. While these certificates are similar to bonds, they are secured solely by the lease or rental revenues accruing to the municipality/agency issuing the certificates have maturities and are paid in a manner parallel to the process involved in the execution and administration of bonds.
City of Lee’s Summit Annual Budget FY16
Competitive Bid or Competitive Bidding: A method of submitting proposals to purchase a new issue of bonds by which the bonds are awarded to the underwriting syndicate presenting the best bid according to stipulated criteria set forth in the notice of sale. Cost Accounting: Accounting which assembles and records all costs incurred to carry out a particular activity or to deliver a particular service. Costs of Issuance: The expenses associated with the sale of new issue of municipal securities, including such items as underwriter’s spread, printing, legal fees and rating costs. Covenant or Bond Covenant: The issuer’s enforceable promise to do or refrain from doing some act. With respect to municipal bonds, covenants are generally stated in the bond contract. Debt: An obligation resulting from the borrowing of money or from the purchase of goods and services. Debt of governmental units include bonds, time warrants, notes, and floating debt. Debt Limit: The maximum amount of debt which an issuer of municipal securities is permitted to uncurl under constitutional, statutory or charter provisions. The limitation is usually a percentage of assessed valuation and may be fixed upon either gross or net debt. Debt Ratios: Comparative statistics showing the relationship between the issuer’s outstanding debt and such factors as its tax base, income or population. Such ratios are often used in the process of determining credit quality of an issue, especially in the case of general obligation bonds.
217 | P a g e
General Appendix Debt Service: The amount of money necessary to pay interest on an outstanding debt, the serial meteorites of principal for serial bonds and the required contributions to an amortization of sinking fund for term bonds.
Encumbrances: Obligations in the form of purchase orders, contracts or salary commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved.
Debt Service Fund: A fund established to account for the payment of interest and principal on all general obligation debt.
Enterprise Activity: A revenue- generating project or business which supplies funds necessary to pay debt service or bonds issued to finance the facility. The debts of such projects are selfliquidating when the projects earn sufficient moneys to cover all debt service and other requirements imposed under the bond contract.
Debt Service Schedule: A table listing the annual payments necessary to meet debt service requirements over the period of time the bonds are to be outstanding. Defeasance: Termination of the rights and interests of the bondholders and of their lien on the pledged revenues in accordance with the terms of the bond contract for the prior issue of bonds. Defeasance usually occurs in connection with the refunding of an outstanding issue before the final payment, or provision for future payment, of principal and interest on a prior issue. Delinquent Taxes: Taxes remaining unpaid on and after the date on which a penalty for nonpayment is attached. Depreciation: 1) Expiration of the service life of capital assets attributable to wear and tare, deterioration, action of the physical elements, inadequacy or obsolescence. 2) That portion of the cost of a capital asset that is charged as an expense during a particular period. Direct Debt: The debt for which the issuing unit has sole responsibility. Disbursements: Recording accounts payable, reviewing invoices and supporting documents, and making payments to vendors.
City of Lee’s Summit Annual Budget FY16
Enterprise Debt: Debt which is to be retired primarily from the earnings of publicly owned and operated enterprises. Enterprise Fund Accounting: Accounting used for government operations that are financed and operated in a manner similar to business enterprises and for which preparation of an income statement is desirable. Expenditures: Where accounts are kept on the accrual or modified accrual basis of accounting, the cost of goods received or services rendered whether cash payments have been made or not. where accounts are kept on a cash basis, expenditures are recognized only when the cash payments for the above purposed are made. Expense: Charges incurred (whether paid immediately or unpaid) for operations, maintenance, interest or other charges. Feasibility Study: A report of the financial practicality of a proposed project and financing thereof, which may include estimated of revenues that will be generated and a revenue of the physical operating, economic or engineering aspects of the proposed project.
218 | P a g e
General Appendix Federal National Mortgage Association (FNMA) or Fannie Mae): One of the two presently existing corporations which formerly comprised the FNMA. As it currently exists, FNMA is a government- sponsored private corporation authorized to purchase and sell mortgages and to otherwise facilitate the orderly operation of a secondary market for home mortgages. Financial Advisor or Consultant: With respect to a new issue of municipal bonds, a consultant who advises the issuer on matters pertinent to the issue, such as structure, timing, marketing, fairness of pricing, terms and bond ratings. Can provide cash management services and can serve as an agent for the issuer during the pricing of bonds during a negotiated sale. Fiscal Agent: An agent (usually and incorporated bank or trust company) designated by a government to act for it in any of several capacities in the sale, administration and payment of bonds and coupons. Fiscal Policy: a government’s policy relating to budgeting of expenditures and revenues. Fiscal Year: A 12-month period of time to which the annual budget applies and at the end of which a governmental unit determines its financial position and the results of its operations. Fixed Asset Management: Tagging and preparing asset ledgers for plant, facilities, and equipment; recording changes in asset status; and conducting periodic inventories of assets. Full Disclosure: Providing accurate and complete information material to a bond issue, which a potential investor would be likely to consider important in deciding whether to invest. Material facts that enable the investor to evaluate the credit quality of an issue. City of Lee’s Summit Annual Budget FY16
Full Faith and Credit: A pledge of the general taxing power for the payment of debt obligation. Bonds carrying such pledges are usually referred to as general obligation bonds or full faith and credit bonds. Full Time Equivalents [FTE]: Equal to one person based on a 2080 hours a year. Fund: An independent fiscal an accounting entity with a self- balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives. Fund Balance: The excess of the assets of a fund over its liabilities, reserves, and carryover. General Fund: The largest governmental fund, the General Fund accounts for most of the financial resources of the general government. General Fund revenues include property taxes, licenses and permits, local taxes, service charges, and other types of revenue. This fund usually includes most of the basic operating services, such as fire and police protection, finance, planning, codes administration, public works and general administration. General Long-term debt: Long-term debt legally payable from general revenues and backed by the full faith and credit of a governmental unit. General Obligation Bonds [GO BONDS]: Bonds which are secured by the full faith and credit of the issuer. General Obligation bonds issued by local units of government are secured by a pledge of the issuer’s ad valorem taxing power.
219 | P a g e
General Appendix General Property Tax: The tax usually levied on real and personal property. This tax is typically levied locally. Generally Accepted Accounting Principles [GAAP]: GAAP is a way of reporting. GAAP reporting will enable your government through the use of proper funds, to present more informative Goal: A statement of broad direction, purpose or intent based on the needs of the community. A goal is general and timeless. Governmental Accounting Standards Board [GASB]: A standard-setting body, associated with the Financial Accounting Foundation and comparable to the Financial Accounting Standards Board, which prescribes standard accounting practices for governmental units in maintaining their financial records and releasing financial data to the public. Governmental National Mortgage Association [GNMA or Ginnie Mae]: One of two corporations formerly comprising the FNMA. GMNA is an agency of the Federal Department of Housing and Urban Development empowered to provide special assistance in financing home mortgages and is responsible for management and liquidation of federally owned mortgage portfolios. Its liquidation functions involve the issuance of participation certificates representing beneficial interest in future payments on a pool of mortgages. Grant: A contribution of assets (usually cash) by on governmental unit or other organization to another. Typically, their contributions are made to local governments from state and federal governments and made for specified purposes.
City of Lee’s Summit Annual Budget FY16
Grants Management: Recording grants-related transactions in keeping with grant regulations, and preparing financial reports for grantor agencies. Gross Bonded Debt: The sum of all General Obligation Debt. Also known as Direct Debt. Internal Audit: Reviewing financial transactions in both the finance department and in operating departments for compliance with local policy and generally accepted accounting principles. Internal Control: A plan of organization for purchasing, accounting, and other financial activities which, among other things, provides for separation of duties, proper authorization from responsible officials in processing of a transaction and the arrangement of records and procedures to facilitate effective control. Internal Service Fund: Funds used to account for the financing of goods or services provided by one department or agency to other departments of a government on a cost- reimbursement basis. Investment management: Determining amounts and types of investments to be made, securing quotes from financial markets, and apportioning interest earned to the proper funds. Investment of Proceeds: The investment of proceeds and other moneys relating to an issue is typically governed by state law and by the Indenture or Bond Resolution. Inventory: Maintaining custody and records of supplies held in stock for future consumption. Level Debt Service: An arrangement of serial maturities in which the amount of principal maturing increases at approximately the same rate as the amount of interest declines, resulting
220 | P a g e
General Appendix in substantially equal annual debt service payments over the life of the bonds.
reflect properly the taxes levied and revenue earned.
Levy: (verb) To impose taxes, special assessments, or service charges for the support of government activities. (noun) The total amount of taxes, special assessments or service charges imposed by a governmental unit.
Moody’s Investors Service: An independent service subsidiary of Dun & Bradstreet Crop., based in New York City, which provides ratings for municipal bonds and other financial information to investors.
Liability: Debt or other legal obligations arising out of transactions in the past which must be liquidated, renewed or refunded at some future date. Note: This term does not include encumbrances.
Municipal Securities Rule Making Board: An independent, self- regulatory organization established by Congress in 1975 having general rule making authority over municipal securities market participants (generally, brokers and dealers).
Liquidity: The ability to convert an investment to cash promptly with minimum risk to principal or accrued interest. Long-Term Debt: Debt with a maturity of more than one year after date of issuance. Management Information Systems [MIS]: Management Information Systems is an internal service department that provides computer and telecommunications needs to the other City Departments. Management Information Systems Equipment Replacement Program [MERP]: The user departments will pay a rental or lease charge that will provide funds for replacement of MIS equipment at a scheduled future date. The rental rate also includes routine maintenance service much like a commercial leasing company. Modified Accrual Basis: The basis of accounting under which expenditures other than accrued interest on general long-term debt are recorded at the time liabilities are incurred and revenues are recorded when received in cash and/or available revenues which should be accrued to
City of Lee’s Summit Annual Budget FY16
Negotiated Sale: The sale of a new issue of municipal securities by an issuer through an exclusive agreement with an underwriter or underwriting syndicate selected by the issuer. Net Direct Debt: With respect to any given Issuer the amount of all outstanding debt of such Issuer (Direct Debt), less the sum of any amounts accumulated in sinking funds for such debt and the amount of such debt that is self-supporting. New Issue: An issue of securities which is purchased from the issuer and offered to investors, usually on a “when issued” basis, for the first times. Non-Callable Bond: A bond that cannot be redeemed at the issuer’s option before its stated maturity date. Object of Expenditure: Expenditure classifications based upon the types or categories of goods and services purchased. Objective: Something to be accomplished in a specific, well defined, and measurable terms, and that is achievable within a specific time frame.
221 | P a g e
General Appendix Outstanding: In general as used with respect to the principal of an issue, remaining unpaid. Pay-As-You-Go Basis: A term used to describe the financial policy of a governmental unit which finances all of its capital outlay from current revenues rather than by borrowing. Paying Agent: The entity responsible for transmitting payments of interest and principal from an issuer of municipal securities to the security holders. The paying agent is usually a bank and generally provides reconciliation of the securities and coupons paid and similar services. Payment Date: The date on which interest, or principal and interest, is payable. Payroll: Generating employee paychecks, deducting and transmitting taxes and other payments, administering insurance and other benefits, and generating required reports. Pension Administration: Managing contributions to pension accounts, maintaining records of individual employees’ account balance, making investments on behalf of pension funds, and disbursing retirement income.
Premium Call: A redemption provision which permits the issuer to call securities at a price above par. Principal (in relation to bond issuance): The face amount or par value of a security payable on the maturity date. Proceeds/Original Proceeds/Gross Proceeds: The amount paid to the issuer by the first purchaser of a new issue. Gross Proceeds refers to all of the moneys relating to an issue which are subject to Arbitrage limitations and Rebate under the internal Revenue Code. Public Offering: The sale of bonds to the general public. Purchasing: Determining source and price of goods and services requisitioned by operating departments; authorizing and monitoring purchases. Rating Agencies: The organizations which provide publicly available ratings of the credit quality of securities issuers. Rebate: To pay the United States government amounts earned from the investment of gross proceeds at a yield in excess of the yield on the issue.
Per Capita Debt: The amount of an issuing municipality’s debt outstanding divided by the population residing in the municipality.
Redemption: A transaction in which the issuer returns the principal amount represented by an outstanding security.
Pledged Revenues: The monies obligated for the payment of debt service and other deposits required by bond contract.
Refunding: A procedure whereby an issuer refinances an outstanding bond issue by issuing new bonds.
Policy Analysis and Research: Evaluation of policy options and recommending policies on revenue generation, financial administration, and financial aspects of operating policies and activities.
Refunding Bond: A bond issued to retire a bond already outstanding.
City of Lee’s Summit Annual Budget FY16
Registered Bond: A bond whose owner is designated on records maintained for this purpose by registrar, the ownership of which 222 | P a g e
General Appendix cannot be transferred without the registrar recording the transfer on these records. Revenue Bond: A bond which is payable from a specific source of revenue and issuer with taxing power is not pledged. Revenue Bonds are payable from identified sources of revenue, and do not permit the bondholders to compel taxation or legislative appropriation of funds not pledged for payment of debt service. Generally, no voter approval is required prior to issuance of such obligations. Revenue Collections: Billing, collecting, and posting revenues from user fees, licenses, fines, etc. Receiving and posting revenue from tax bills; collecting overdue bills. Providing technical support and control to operating departments which collect such revenue. Revenue Estimate: A formal estimate of how much revenue will be earned from a specific revenue source for some future period, usually a future fiscal year. Revenue Fund: A fund established by the bond contract of a revenue bond issue into which all gross revenues from the financed project are initially placed and from which the monies for all funds are drawn. Risk Management: Making determination of issuance coverage, administering payments to insurance companies and administrative services providers; determining and financing liability for self-insured risks. Serial Bonds: Bonds of an issue which are payable as to principal in amounts due at successive regular intervals, generally annual or semiannual and generally in the early years of the term of the issue.
City of Lee’s Summit Annual Budget FY16
Special Assessment: A charge imposed against property in a particular locality because that property receives a special benefit by virtue of some public improvement, separate and apart from the general benefit accruing to the public at large. Special Assessments must be apportioned according to the value of the benefit received, rather than the cost of the improvement, and may not exceed the value of such benefit or the cost of the improvement, whichever is less. System Development Charge: A reimbursement fee, an improvement fee or a combination thereof assessed or collected at the time of increased usage of a capital improvement or issuance of a development permit, building permit or connections to the capital improvement. This charge includes that portion of a sewer or water system connection that is greater than the amount necessary to reimburse the unit of local government for its average cost of inspecting and installing connections with water and sewer facilities. Tax or Taxes: Compulsory charges levied by a governmental unit for the purpose of raising revenue. Tax revenues are used to pay for services or improvements provided for the general public benefit. Tax Anticipation Notes [TANS]: Notes issued in anticipation of collection of taxes usually retirable only from tax collections, and frequently only from the proceeds of the tax levy whose collection is anticipated at the time of issuance. A form of short-term financing. Tax Base: The total property and resources available to a governmental entity for taxation. Tax Billing: Determining amounts to be billed to individual taxpayers and distribution of bills to each taxpayer. 223 | P a g e
General Appendix
Tax-Exempt Bond: Another term for a municipal bond. Interest on many municipal bonds is exempt from federal income taxation. Tax Rate: The amount of tax stated in terms of a unit of the tax base. Tax Rate Limit: The maximum rate or millage of tax which a local government may levy. Trustee: A financial institution with trust powers which acts in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract. Underwriters: A dealer which purchases a new issue of securities for resale. Traders with contacts with large bond buyers and ability to price the bonds for sale.
City of Lee’s Summit Annual Budget FY16
Upgrade: The rising of a rating by a rating service due to the improved credit quality of the issue or issuer. Utility Billing: Determining amounts of water, sewer, electric bills; sending bills to customers, depositing and posting receipts, collecting overdue amounts. Vehicle Equipment Replacement Program [VERP]: VERP provides funds for replacement of vehicles at a scheduled future date through user departments paying rental or lease charges. The rate also includes routine maintenance service much like a commercial leasing company. Working Capital (Designated): An account within the fund balance of the General Fund in which a certain amount of resources were set aside for purposes of maintaining a positive cash flow, shortfalls in the revenue projections, and emergencies during the fiscal year.
224 | P a g e
General Appendix
ACRONYMS AV: Assessed Valuation BERP: Building Equipment Replacement Program CIP: Capital Improvement Program CD: Certificate of Deposit COP: Certificate of Participation F&PC: Finance and Personnel Committee FNMA: Federal National Mortgage Association (or Fannie Mae) FTE: Full Time Equivalents GO Bonds: General Obligation Bonds GAAP: Generally Accepted Accounting Principles GASB: Governmental Accounting Standards Board GNMA: Governmental National Mortgage Association (or Ginnie Mae] MIS: Management Information Systems MERP: Management Information Systems Equipment Replacement Program TANS: Tax Anticipation Notes VERP: Vehicle Equipment Replacement
City of Lee’s Summit Annual Budget FY16
225 | P a g e
Appendix
General
Quick Facts: Located in Kansas City, Missouri Metropolitan area, in Western Missouri Currently encompasses a total geographic area of 65.87 square miles in both Jackson and Cass counties, Missouri Divided into 4 City Council Districts Served by 5 school districts with Lee’s Summit R-VII serving the majority of the city area Served by major highway corridors including I-470, US 40, US 50, M-291, M-150, and M-350 Served by the Union Pacific Railroad and Amtrak
City of Lee’s Summit Annual Budget FY16
226 | P a g e
General Appendix
MO Statewide Populations and Rankings Geographic Area State of Missouri Counties St. Louis County
Total Population
Rank
5,988,927 998,954
1
Jackson County St. Charles County Greene County Clay County
674,158 360,485 275,174 221,939
2 3 4 5
Jefferson County Boone County Jasper County
218,733 162,642 117,404
6 7 8
Franklin County Cass County Cities Kansas City St. Louis Springfield Independence Columbia
101,492 99,478
9 10
459,787 319,294 159,498 116,830 108,500
1 2 3 4 5
91,364 79,329 76,780 65,794 52,575
6 7 8 9 10
Lee's Summit O'Fallon St. Joseph St. Charles Blue Springs
Demographics Average Household Size Median Age Median Household Income Per Capita Income Households Median Value Owner-Occupied Housing Units
City of Lee’s Summit Annual Budget FY16
2010 Census 2.62 37.2 $73,151 $33,149 33,054.00 $185,500
227 | P a g e
General Appendix
City of Lee’s Summit Annual Budget FY16
228 | P a g e
General Appendix
City of Lee’s Summit Annual Budget FY16
229 | P a g e