1. 2012 City Budget ~ Manhattan ~ Kansas Work Session Two

2. 2012 City Budget 2012 Budget Challenges Declining ending cash balances Minimal reserves Ongoing maintenance and staffing of several new City facilities Increasing property tax requirements from some outside agencies Increasing property tax requirements for the Bond & Interest Fund Future rate increases across all enterprise funds 2

3. 2012 Budget Summary (Proposed)Percent 20082009201020112012 Change General Fund$ 20,801,075$ 22,130,617$ 23,122,213$ 23,253,312$ 24,813,5996.7% Total of All Special Revenue Funds 36,172,81341,053,86041,542,42241,961,20140,699,206(3.0%) Total of All Enterprise Funds 20,030,58620,254,82221,008,90522,175,50028,067,13026.6% Bond & Interest Fund12,106,65811,955,56713,484,91017,655,52520,391,99215.5% Total City Budget:$ 89,111,132$ 95,394,866$ 99,158,450$ 105,045,538$ 113,971,9278.5% 2012 City Budget 3

4. 2012 Property Tax Levies Projected Property Taxes for Outside AgenciesLeviesChange RCPD27.149.0850 Library4.3310.156 Library EBF0.911(0.005) Riley County Health Department0.6470.035 33.0391.037 Property Taxes for City Services General Fund3.1540.462 Employee Benefit Fund1.5660.127 Fire Equipment Reserve0.1130.000 General Improvement0.000 Park Development0.000(0.002) KP&F0.169(0.003) Industrial Promotion0.000 Bond & Interest Fund5.5290.032 10.5310.616 Possible 2012 Mill levy 43.570 Estimated increase over 2011 Mill Levy1.653 4

5. Issues from First Work Session 5

6. A. Options for Reducing Property Tax (Information Requested) Remove RCPD delinquency (.814 mills) Reduce General Fund (.385 mills) Reduce special assessment delinquency (.453 mills). Total mill levy reduction of 1.652 mills 2012 City Budget 6

7. Total revenue applied to 2010 Debt Payment - $ 1,801,770 Total debt service payments in 2010 - $995,469 Excess revenue - $ 806,301 Trustee Fee = $5,000 25% to the Special Redemption Fund = $200,325 32% to the City of Manhattan = $258,299 43% to Dial Realty = $342,676 2011 projections indicate revenue exceeding expenses by 25%. 2012 City Budget B. Analysis of TIF Revenues (Information Requested) 7

8. Majority of operational expense to date came from 1% transient guest tax approved in Charter Ordinance 46 which authorized up to a 2% increase in the tax rate to assist with Discovery Center operations. For 2012, 1% of the transient guest tax ($169,500) will be transferred to the General Fund. An additional $169,500 will be transferred from the CVB fund balance. In total, this is equivalent to 2% of the transient guest tax. Remainder of 2012 revenue budget will come primarily from admission fees and other direct revenues. No property tax is anticipated for the Discovery Center operational budget. 2012 City Budget C. Discovery Center Operations (Information Requested) 8

9. Transient Guest Tax – First Class Cities 1 Overland Park9.00% 2 Atchison8.00% 3 Lenexa8.00% 4 Unif. Govt. Wy. Co.8.00% 5 Hutchinson7.00% 6 Leavenworth7.00% 7 Leawood7.00% 8 Salina6.70% 9 Dodge City6.00% 10 Emporia6.00% 11 Garden City6.00% (County Tax) 12 Lawrence6.00% 13 Liberal6.00% 14 Manhattan6.00% 15 Newton6.00% 16 Olathe6.00% 17 Parsons6.00% 18 Shawnee6.00% 19 Topeka6.00% 20 Wichita6.00% 21 Coffeyville5.00% (County Tax) 22 Fort Scott5.00% 23 Junction City5.00% (County Tax) 24 Pittsburg4.00% (County Tax) 25 Prairie Village0.00% 9

10. Discovery Center compared to eight other museums both in Kansas and across the Midwest. Discovery Center annual attendance has been conservatively estimated lower than most similar facilities. Discovery Center admission fees fall well within the range of similar facilities. Discovery Center footprint smaller than most similar facilities. 2012 City Budget D. Other Museum Visitation Statistics (Information Requested) 10

11. City current has all three national rating agencies rate each temporary note/general obligation bond issues. Moody’s (Aa2); Standard & Poor (AA); and, Fitch Ratings (AA+) A rating downgrade of “one notch” likely would increase the City’s interest rate from.15% to.25%. A rating downgrade of “two notches” likely would increase the City’s interest rate from.40% to.60%. The affect of any rating downgrade would result in hundreds of thousands in additional interest over the life of a bond issue. 2012 City Budget E. Effects on Bond Ratings (Information Requested) 11

12. For the 2012 CIP, there were three citizen requests and four Board/Committee requests. Only one citizen request has been added to the 2012 CIP (Knox Lane sidewalk to Northeast Park – funded by grant) All four Board/Committee requests have been added to the 2012 CIP. Total budget impact of these requests is $25,000. 2012 City Budget F. Citizen/Board/Committee CIP Requests (Information Requested) 12

13. 2012 CIP Overview 2011 CIP2012 CIP Increase/ (Decrease) Equipment1,950,0002,403,831453,831 Projects*44,608,80316,746,214(27,862,589) Total46,558,80319,150,045(27,408,758) *In 2011, the Wastewater Treatment Plant Upgrade and Expansion project was included as part of the Capital Improvement Program at a projected cost of $22,892,000. 2012 Citizen and Board Requests Sidewalk to Northeast Park = $95,000 (Grants) Moro Bicycle Boulevard Project = $15,000 (Special Street and Highway) Installation of Alternative Transportation Traffic Signs = $5,000 (Special Street and Highway) Installment of Bicycle Racks in Downtown = $5,000 (Special Street and Highway) Historic Street Lighting = $96,000 (Other Sources) 13

14. 2012 CIP Overview Major Improvements…. Total Project Cost 2012 Budget ImpactFunding Source Levee Design & Construction2,150,000---G.O. Bond Supported by Stormwater Fees Reconfigure & Expand Airport Short-Term Parking Lot 1,565,000---G.O. Bond Supported by Parking Fees Hartford Road System Phase 21,400,000---G.O. Bond Supported by Stormwater Fees Consolidated Rental Car Facility1,200,000---G.O. Bond Supported by CFC’s Ft. Riley Main Upsizing SCS – 25686,000---G.O. Bond Supported by Wastewater Fees New Traffic Maintenance Facility650,000 CIP Reserve Fund 14

15. 2012 City Budget Traffic Operation Building 2012 Programmed Project Road Map to Starting Construction RFP to solicit and hire an architect for design of the structure. Enter into agreement with architect for design services Notification to KDHE about proposed project scope Municipal zoning documents to planning board and city commission for public comment Rezoning of Property Development of final plans for construction Submittal of Plans to Code Department Start construction of the new facility. 15

16. 2012 City Budget Traffic Operation Building ….cont. Restrictive Agreement with Kansas Department of Health and Environment to Limitations of the Property Property “shall not be used” for residential purposes of “any type” to include but not limited to house, apartment, mobile home, nursing home, or condominium. Shall not be used a public area such as schools, educational center, day care center, playground or similar structures. No basements No water wells Footings kept 5 feet or less depth, no basements, slab foundation design is acceptable. 16

17. Enterprise Funds Stormwater Fund Water Fund Wastewater Fund 17

18. Enterprise Funds - Stormwater Past 10 Years of investment in the community, an overview for 2012 and beyond… Past investments in projects for the community Large long term projects that have community impact in 2012 Backlog of Projects from original 1995 Stormwater Master Plan City Commission direction will be used to shape out years of storm water projects programmed for the community… 2012 City Budget 18

19. Enterprise Funds - Stormwater Stormwater Infrastructure 10-year CIP Investment History Project (Total Cost Includes Grants and Other Sources)City Share Allen Road 326,620 Anderson Avenue (Total Cost = $7,093,450) 2,406,110 Tuttle Creek Blvd. Phase 1 (Total Cost = $3,490,655) 628,885 Poyntz Pump Station (Total Cost = $1,962,631) 557,759 Prairie Lakes (Total Cost = $1,593,531) 713,266 Marlatt Waterway 611,575 Downtown Stormwater Project #15 1,925,000 Dickens Drainage Improvements 155,656 Shirley Lane 121,590 McCall Detention Ponds 100,000 Eureka Tributary Study 240,000 Levee Restudy 579,000 Levee Certification (Investigation) 407,074 Total Stormwater Improvements: 8,772,535 19

20. Stormwater Fund 2012 Budget Proposed 5% Increase in Stormwater Revenues 2012 Budget Increase Downtown Stormwater Project #15 Debt Payment 225,240 Watershed Analysis 100,000 Operating Expense Increases 3,760 Total Budget - Stormwater Fund$329,000 20

21. Enterprise Funds – Stormwater Rates 21

22. 2012 CIP Projects Pending Stormwater Projects… Levee Certification Construction ~ $600,000,000 valued property that is protected by the levee Hartford Road System ~ $1,992,748 investment that would provide relief to this long term problem area Watershed Analysis ~ City Wide update ~ 3 Year Program Corps of Engineers Levee Study ~ Protection Study of original authorization of flood water release from Tuttle Creek Minor Maintenance Projects ~ City Wide 2012 City Budget 22

23. 2013 & Beyond CIP Projects Backlog of Stormwater Projects… Tecumseh-Quivera System ~ Design 90% Completed CiCo Tributary ~ Study Phase Started Allen Road System South 14 th Street System Bluemont Avenue System Bertrand Street System South Manhattan Avenue System Kimball and Seaton Ave System Casement Road Reinforced Box And many more projects identified from 1995 SWMMP, plus the Northview Drainage Study and the East Side Drainage Study 2012 City Budget 23

24. Enterprise Funds - Water Water Infrastructure 10-year CIP Investment History Water Main Improvement Projects $9,135,037 Water Meter Replacement $2,456,145 Water Tank/Tower Maintenance $1,574,336 Well Field Maintenance $1,053,774 Water Treatment Plant Maintenance $661,764 Equipment $429,988 Water Main Maintenance $245,055 Planning Studies $241,688 Generator Improvements $110,842 Subtotal$15,908,629 Water Treatment Plant Improvements $18,640,133 Total Water Improvements$34,548,762 24

25. Enterprise Funds – Water Sewer Lining and Manhole Rehabilitation 25

26. Water Fund 2012 Budget Proposed 7% Increase in Water Revenues 2012 Budget Increase Water Treatment Plant Upgrade KDHE Loan Payment $635,989 Increase in Other Operating Expenses and Reserves $390,503 Operating Expense Increases Related to Plant Expansion $283,390 Other CIP Projects $262,500 24 " Water Line - WTP to Hostetler $250,000 Replacement Programs (Hydrant, Valve, and Meter Replacements) $188,960 2007 New & Parallel Line Construction - Phase III $147,650 Other Water Treatment Plant Repairs $130,000 Konza Water Loan Payment and Changes in Debt Service Payments $73,998 Total Budget Increase - Water Fund$2,362,990 26

27. Enterprise Funds – Water Rates 27

28. Enterprise Funds - Wastewater Wastewater Infrastructure 10-year CIP Investment History Sanitary Sewer System Improvements $13,365,815 Sewer Lining and Manhole Rehabilitation $3,416,580 Wastewater Treatment Plant Maintenance $1,531,232 Equipment $645,097 Planning Studies $595,052 Subtotal$19,553,776 Wastewater Treatment Plant Expansion/Mandates $25,010,797 Total Wastewater Improvements:$44,564,573 28

29. Enterprise Funds – Wastewater Sewer Lining and Manhole Rehabilitation 29

30. Wastewater Fund 2012 Budget Proposed 15% Increase in Wastewater Revenues 2012 Budget Increase WWTP Upgrade & Expansion, K18 /East Miller Ranch Sanitary Sewer, Western Interceptor - KDHE Loan Payment $2,574,135 Other WWTP Improvements and Repairs $275,000 CIP Projects $256,178 Blue Township Wastewater Service – KDHE Loan Payment $49,292 Operating Expense Increases $45,035 Total Budget Increase - Wastewater Fund$3,199,640 30

31. Enterprise Funds – Wastewater Rates 31

32. Enterprise Funds 2011 Rate Increases Water – 7% Wastewater – 15% Storm Water – 5% 25% Operating Expense Reserve Springsted Recommendation: 25% Operating Expense Reserve plus one year debt service. Water Tap Fees Cost of new service installation $1115 2010 Charges, $540. 2011 Charges, $732 2012 Charges, $924 2013 Charges, $1115 32

33. 2012 Budget Considerations Seeking direction and consensus on… 2012 mill levy rate Citizen/Board/Committee CIP requests relative to other CIP recommendations Utility budgets and proposed rate increases Any other budgetary concerns City Commission direction will be incorporated into future budget work sessions… 2012 City Budget 33

34. Reminder… June 28th - Third Budget Work Session on the 2012 City Budget plus Presentations by Outside Agencies 2012 City Budget 34