1. Doug Brown October 23, 2014

2. Budget Overview A Budget Planning Process (Overland Park’s) Financial Management

4. It’s the Law – Kansas law requires a budget before a local government can spend money and levy taxes (K.S.A. 79-2927)* To Manage Our Resources – People – Money – Time *In some cases, Missouri requirements may differ

5. Planning Management Control

6. Used by Elected Officials to allocate resources Budget is first a policy document – Allocation of resources in line with City’s policies – Resources allocated based on priorities of Governing Body

7. Budget is a management tool – Management allocates resources to operational areas to meet Governing Body policy objectives – Requires management to formulate a work plan

8. Provides assurance to citizens regarding wise use of tax money Budget provides control – Legal restraints – Resources are spent in accordance with plan

9. Must have a fiscal year budget Is done on an annual basis Must hold public hearings Must be balanced (no deficit) Governing Body must approve it by August 25 th of the year prior (in Kansas)

10. Ideal – Establish your mission Strategic Plan Goals and Objectives – Measure your mission Assets – what and what condition Benchmarking – cost of activities; people requirements – Develop your budget requirements Incremental/program/zero-based

11. Actual – Typically, it’s incremental budgeting Assigned personnel costs Assigned budget % increase (or decrease) Expanded level packages (for increases in mission or special requirements) Mostly, it is “fill in the blanks”

12. General Special Revenue Debt Service Capital Projects Special Assessment Enterprise Internal Service Trust and Agency Reserve

13. Special Street and Highway 1/8 Cent Sales Tax Fund Special Park and Recreation Special Alcohol Control Fund Convention Center Transient Guest Tax Fund Transient Guest Tax – Capital Transient Guest Tax – Operating Capital Improvement Fund Equipment Reserve Fund Special Street Improvement Fund Special Machinery & Equipment Stormwater Utility Soccer Complex Fund

15. Actual vs. Budget Adjustments Adherence to Financial Plan Telling the Story Process Forms Approval Implement Policies Financial Priorities Policies Council Involvement

16. Effective Supervisory Skill Building, @ICMA 2005 Long-Term Financial Plan –Five-year revenue and expenditure forecast Capital Improvement Program (5- year) –Expenditures for capital infrastructure, equipment and facilities. Capital items are costly, nonrecurring, and have a life span of multiple years Maintenance Program (5-year) –Significant repair, rehabilitation, or in-kind replacement of existing city infrastructure or facilities. Operating Budget –Supports ongoing operations & routine maintenance –Personnel –Supplies –Equipment –Operation of facilities

17. Effective Supervisory Skill Building, @ICMA 2005 Examines historical revenues & expenditures. Examines historical, current & projected economic & demographic indicators. Projects future financial outlook of City based on a set of assumptions. Facilitates decisions that ensure the ongoing financial solvency of the City.

19. Effective Supervisory Skill Building, @ICMA 2005 Funds the first year of the capital improvement plan – a multi-year plan for the purchase and financing of infrastructure, major equipment, and facilities Financing may come from tax revenues, intergovernmental revenues, long-term borrowing, or combination

20. Effective Supervisory Skill Building, @ICMA 2005 Project Types Funding Sources 2010-2014 CIP = $159,785,000 2011-2015 CIP = $121,528,000 2012-2016 CIP = $98,923,000 2013-2017 CIP = $82,940,500 2014-2018 CIP = $121,582,000 2015-2019 CIP = $128,665,000

21. Effective Supervisory Skill Building, @ICMA 2005 Funds the first year of the maintenance plan – a multi-year plan for major and preventive maintenance Financing may come from tax revenues, intergovernmental revenues, long-term borrowing, or dedicated sources

22. Effective Supervisory Skill Building, @ICMA 2005 2010-2014 = $61,979,000 2011-2015 = $53,960,000 2012-2016 = $63,948,000 2013-2017 = $69,895,000 2014-2018 = $77,110,000 2015-2019 = $79,040,000 Project Types Funding Sources

23. Effective Supervisory Skill Building, @ICMA 2005 Can reduce major fluctuations in tax rates Encourages the coordination of capital, maintenance and operating expenditures Allows flexibility in scheduling bond issues Helps the city time projects to obtain state and federal funding Helps taxpayers understand the community’s long-range needs

24. Effective Supervisory Skill Building, @ICMA 2005 Maintain low property taxes Sales taxes are primary funding source Utilization of user fees Maintain adequate reserves

25. Effective Supervisory Skill Building, @ICMA 2005 Departments Develop Budget Proposals –Allocate resources for ongoing operations –New programs and / or increased funding –Developed by Line Item/Cost Center/Department –Based on historical patterns and knowledge about changes in patterns/approaches –Allocations/Re-allocations based on constraints –Use of consistent format/procedures throughout organization

27. Effective Supervisory Skill Building, @ICMA 2005 Prepare early Keep track of changes in your workload Identify ways in which your work unit can become more efficient Talk to other supervisors

28. Effective Supervisory Skill Building, @ICMA 2005 Monitor Budget Expenditures Purchasing in Accordance with Policy Expenditure Management Performance Measures

29. Effective Supervisory Skill Building, @ICMA 2005

30. Overland Park receives most of its revenue from what source? Property Taxes Sales Taxes Fines Building Permit Fees Grants

31. Effective Supervisory Skill Building, @ICMA 2005

32. Overland Park Mill Levy is 12.833 mills to support the 2012 Budget. What percent is that of a homeowner’s property tax bill? Approximately 4% Approximately 11% Approximately 23% Approximately 37%

33. Effective Supervisory Skill Building, @ICMA 2005

34. Effective Supervisory Skill Building, @ICMA 2005 Approximately how much does an owner of a $250,000 house pay in property taxes to the City? $197 per year $368 per year $533 per year $869 per year

35. Effective Supervisory Skill Building, @ICMA 2005 The amount the owner of a $250,000 house pays in property taxes to the City? $368 per year 1 mill = $1 for every $1,000 of assessed value $250,000 * assessment rate of 11.5% / 1,000 * mill levy rate of 12.814 = $368.40

36. Effective Supervisory Skill Building, @ICMA 2005 What percentage of the City’s 2012 operating budget is allocated for public safety services? 19% 32% 48% 63%

37. Effective Supervisory Skill Building, @ICMA 2005

38. What is the largest category of expenditures in the budget? Personnel Costs Commodities & Contractual Services Capital Improvements & Debt Service

39. Effective Supervisory Skill Building, @ICMA 2005

40. Use of debt in financing Public Private Partnerships Privatization Grants

41. Budgeting is a year-round activity (Plan, Develop, Execute) The budget is the supervisor’s resource and authority Use performance measures (output) to link to the budget (input) Use OPM (Other People’s Money) whenever possible