Work Session Two

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

2. 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 2012 City Budget

3. 2012 Budget Summary 2012 City Budget

4. 2012 Property Tax Levies 2012 City Budget

5. Issues from First Work Session

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

7. B. Analysis of TIF Revenues (Information Requested) • 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

8. C. Discovery Center Operations(Information Requested) • 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

9. Transient Guest Tax – First Class Cities

10. D. Other Museum Visitation Statistics(Information Requested) • 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

11. E. Effects on Bond Ratings(Information Requested) • 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

12. F. Citizen/Board/Committee CIP Requests(Information Requested) • 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

13. 2012 CIP Overview *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)

14. 2012 CIP Overview Major Improvements….

15. 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. 2012 City Budget

16. 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. 2012 City Budget

17. Enterprise Funds • Stormwater Fund • Water Fund • Wastewater Fund

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

19. Enterprise Funds - Stormwater

20. Stormwater Fund 2012 BudgetProposed 5% Increase in Stormwater Revenues

21. Enterprise Funds – Stormwater Rates

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

23. 2013 & Beyond CIP Projects Backlog of Stormwater Projects… • Tecumseh-Quivera System ~ Design 90% Completed • CiCo Tributary ~ Study Phase Started • Allen Road System • South 14th 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

24. Enterprise Funds - Water

25. Enterprise Funds – WaterSewer Lining and Manhole Rehabilitation

26. Water Fund 2012 BudgetProposed 7% Increase in Water Revenues

27. Enterprise Funds – Water Rates

28. Enterprise Funds - Wastewater

29. Enterprise Funds – WastewaterSewer Lining and Manhole Rehabilitation

30. Wastewater Fund 2012 BudgetProposed 15% Increase in Wastewater Revenues

31. Enterprise Funds – Wastewater Rates

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

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

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