A Prudent Approach to a Challenging Economy

1. A Prudent Approachto aChallenging Economy Unified Government of Wyandotte County/Kansas City Kansas Proposed 2009 Budget July 10, 2008

2. National Economic Trends • Skyrocketing gas prices • Record number foreclosures • Decreasing home values • Rising unemployment • Slower consumer spending

3. Economic Challenges resulting from Federal & State Actions • Loss of Machinery & Equipment Tax • Halt of State Demand Transfer Revenues • Reductions in State & Federal Funding • Additional State & Federal Mandates • Separation of combined sewer systems • Environmental requirements • Criminal Justice Issues

4. Budget Woes Common • State of Kansas Government collected $61m less than anticipated in taxes during it's recently ended 2008 fiscal year a 1% shortfall that could create budget headaches • Kansas City Missouri faces budget shortfall of over $50m and up to 70 layoffs • Olathe eliminates 16 full time positions • Merriam is considering a 20% Mill Levy increase • Douglas County is considering 2-3 Mill increase • Overland Park is looking to cut $1.6 million out of its 2009 budget • Shawnee Kansas plans delay in street maintenance and proposes household Franchise Fee • Topeka considering 9% property tax increase • Johnson County manager states “worse budget in 32 years”

5. Impacts on the UG Budget • Slowing of revenues • Property valuations • Record fuel prices • Increasing operational costs • Impact of property tax appeals • Harsh winter storm expenses

6. Unified Government’sBudget Goals • Reduce property tax rate • Diversify revenues • Provide high quality responsive services • Maintain financial stability • Positioning the community and organization for future upswing in the economy

7. 2009 Budget RecommendedProperty Tax Rate • This 2009 proposed budget recommends a cut of $250,000 in tax revenues or .23 mill decrease in property tax rates • This decrease represents a symbolic commitment to ongoing and future property tax relief • Property tax relief continues to be a key for future growth in sustained development of our community • Reduce reliance on property tax and diversify our revenues

8. Continue Reduction of Tax Rate

9. 2009 Budget RecommendationsReduction in Expenses • Freeze hiring of new employees • Exceptions: Police officers, Firefighters/Paramedics, Dispatchers, Bus Drivers & Detention Officers • Freeze capital projects and equipment purchase • Exceptions: Grant funded projects, essential maintenance to protect health & safety

10. 2009 Budget RecommendationsReduction in Expenses • Suspend the County CiFi capital projects revenue sharing program to Bonner Springs, Edwardsville and KCK • For 2009 the remaining CiFi fund balance of $148,400, will be distributed to each of the three cities in equal amounts of $49,000 and the remaining $1400 to Lake Quivira • Restoration of the CiFi Program may be considered at some future date as economic conditions improve

11. 2009 Budget RecommendationsReduction in Expenses • Encourage across the board cost cutting efforts throughout departments. Targets have been set in specific areas such as: • Reduce outside legal counsel by 25% • Reduce consultant fees by 25% • Cut office supply purchases by 10% • Suspend sick leave buy back program for employees in 2008 and 2009

12. 2009 Budget RecommendationsEnhanced Revenues • Major Enhancements • Establish Storm Water Utility • Increase BPU PILOT (Payment In-Lieu of Tax) • Other • Accelerate collections on unpaid tickets, i.e. Amnesty program • Increase traffic fines • Restructure XSPAND delinquent tax contract • Credit card transaction fees • Jail booking fees

13. Storm Water • Initiate much needed Storm Water Management program through establishing the storm water utility • Beginning in 2009 a $2.00 per month fee would be assessed to residential, commercial, industrial and institutional users except those in Fairfax Drainage District • Future consideration will be given to a graduated scale for commercial, industrial and institutional users who contribute substantially to storm water issues

14. Adjustment in PILOT Fee • Charter ordinance sets out that the BPU PILOT (Payment-In Lieu of Tax) payment to the City of Kansas City, Kansas will be between 5% and 15% • Current PILOT fee is set at 7.9%; this proposed budget would increase BPU PILOT to 9.9% beginning in January 2009 • Increase in PILOT requires a joint meeting for Commissioners and the Board of Public Utilities prior to approval of proposed increase • Based upon water and electric charges of $100 per month, this increase would result in an estimated impact to the average BPU rate payer of $2.00 per month • UG proposes to phase in compensation to the BPU for the cost of billing services for WPC, RTC and SWM enterprise funds

15. 2009 Budget Will MeetEssential Needs • Honor labor contracts • Honor commitments to non-union personnel • COLA on target for July 2008 • Merit increases scheduled for April 2009 • The budget allows for essential hires such as: • Police Officers • Firefighters/Paramedics • Detention Officers • Transit Operators • Other essential positions • Capital • Complete projects already started • Continue grant funded projects that require local match

16. 2009 Budget RecommendationsOrganizational Impacts • Explore Potential New Initiatives for the workplace • Early retirement package • Work from home program • Research 4 day 10 hour work week • Voluntary unpaid leave program • Expand employee health insurance opt out program • Impacts may save dollars and motivate employees • Consolidation of Parks and Recreation Mill Levies into single fund – no dollar impact but will streamline and improve delivery of park services and maintenance

17. Effects of Recommendations • Commit to quality services with fewer people and resources • Organization will become leaner but more efficient • Reduction of costs throughout organization • Service response may suffer • Maintaining services with less people will be a challenge • Response to complaints and service requests may be delayed • Projects not completed as quickly • Increase demand on employee performance • Increased constituent complaints • Status of Economy may force more cuts • Further cuts may be required mid-year or in the proposed 2010 budget

19. The 2009 Unified Government Annual Budget - $259.1* Million All Funds * Not including grants

20. UG 45% Other 55%

21. 2009 UNIFIED GOVERNMENT BUDGET

22. Diversifying Revenues

24. Public Safety Initiatives Mid Town Patrol Division School Resource Officer Program Night COPPS Unit Night Light Officer Vice Unit Economic & Community Development Initiatives CVB Funding Increased City-Wide Master Plan Neighborhood Revitalization Program One-stop Shop for Planning & Permitting Urban Housing Project Quality of Life/Services Initiative Reduced Property Tax Rate Senior Citizen Utility Refund NBR Funding Curbside Recycling Program Quality of Government Initiatives 3-1-1 Customer Service Program Code Enforcement Efficiency Sunday Bus Service Performance Measures Successes & Achievements

25. A New Chapter at a New Level on the near Horizon • Destination Casino Resort • Woodlands Racino • Schlitterbahn Vacation Village • Plaza at the Speedway • Prescott Plaza • Village West STAR Bond Retirement • Downtown Office Building • Midtown Redevelopment

27. Magellan Storage Tank FireJune 3, 2008 ….When something like this happens, companies and government agencies are often criticized…not this time, and the credit has to go to…. the company and Fire Department….it was a text book example of how crisis management should work. -Wayne Godsey President & General Manager

28. Budget Calendar May 1 7pm 1st Budget Public Hearing July 10 5pm Budget Work Session/Public Comment July 17 5pm Budget Work Session July 21 7pm *Budget Work Session July 24 5pm Budget Work Session July 28 7pm *Budget Work Session July 31 5pm 2nd Budget Public Hearing July 31 7pm Adopt Budget & CDBG Consolidated Plan BUDGET WORKSHOPS WILL BE HELD IN 6TH FLOOR TRAINING ROOM *Budget Work Session to be held immediately following Standing Committee meetings