Budget Message Budget Takeaways

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1 Budget Message 2017 T he City of Shawnee Management Team is pleased to present the 2017 Budget as approved by the Governing Body on July 25, The ultimate purpose of the budget process is to direct tax dollars toward the results that citizens and businesses value. The Governing Body used public input from many sources to define seven specific Results, in the order of their importance, that help guide each budget decision Safe Community Effective Mobility and Reliable Infrastructure Economic Growth and Vitality Attractive, Healthy, and Well-Maintained Community Quality Cultural and Recreational Opportunities Environmentally Sustainable and Well-Planned Community Good Governance A key theme of this budget process has been that Shawnee is at a crossroads and must decide what kind of community we want to be. We have seen other communities around us upgrade streets and stormwater systems, add public safety resources, and revitalize their downtowns. In comparison, financial and human resources have been stretched too tightly in Shawnee and we are struggling to maintain services in the way that citizens deserve and expect. At the Mayor s request, staff defined each unmet need in detail for the Council Committee to discuss and prioritize. After much consideration, the adopted 2017 Budget includes increases to the property tax mill rate and stormwater utility fee. The total increase for the average Shawnee home is about $8 per month. Page 1 Budget Takeaways The City of Shawnee has a balanced budget. The operating budget (General Fund) includes healthy reserves for emergencies and to protect us through unexpected economic changes. The City saves money on street and stormwater projects by maximizing county, state and federal funding whenever possible. The average homeowner in Shawnee pays $730 per year or $61 per month in City property taxes. Shawnee has an excellent Aa1 bond rating, which allows the City to obtain favorable interest rates. We consistently receive the Distinguished Budget Presentation Award from the Government Finance Officers Association. Shawnee uses Priority Based Budgeting (PBB) to help make financial decisions. PBB looks at the budget based on the cost of programs instead of by departments within the organization.

2 Highlights Stormwater The City s Stormwater System consists of 179 miles of pipe, nearly 10,000 inlets and junction boxes, 100 miles of roadside ditches, and 13 miles of unimproved channels. The 2017 Budget includes an increase to the Stormwater Utility fee to help fund maintenance and repairs to the Stormwater System. Priorities for the additional revenues are to reduce the backlog of citizen service requests, address the ever-growing list of pipe replacements, set aside a reserve for emergency repairs, and complete video inspection of the remaining system within seven years. Fees for single family residential properties will increase from $3 to $6 per month. Nonresidential properties pay a fee based on impervious surface area. Visit for more information about the City s Stormwater Program. NIEMAN NOW! Nieman Now! The Governing Body approved a $35 million investment to revitalize Shawnee s downtown by accelerating several future drainage and street improvements into one coordinated, bond-funded project. Nieman Now! began construction in fall 2016 and will be completed by the end of Combining these projects allows the City to receive the maximum outside funding $16.4 million of the $35 million will come from Johnson County. Nieman Now! includes redirecting the creek that runs through downtown to relieve flooding and increase the amount of developable land. The existing concrete channel will be replaced with attractive vertical block walls with a walking trail on one side. The next phase will be improving the streetscape by converting Nieman Road into a three-lane street with a walking path and bicycle lanes on one side. Several other streets in the downtown area are also scheduled for improvements in the next few years after Nieman Now! is complete. Page 2 Streets Street, curb, and sidewalk maintenance work is still finishing up for The City maintains 791 lane miles of streets. As this message goes out, the City has completed 62 lane miles of asphalt overlay, 6.4 lane miles received a chip and seal treatment and 33 miles received a crack seal treatment. The City also replaced 73,500 feet of curb and 13,500 feet of sidewalk. The Street Maintenance Program will be very active again in 2017, with a budget of nearly $7.2 million. Work will begin in late 2016 to extend Clear Creek Parkway between Clare Road and K-7 Highway in conjunction with a new residential subdivision. The road will have a recreational trail on one side and sidewalk on the other, with a roundabout at Gleason. In addition, Shawnee s Street Improvement Program (SIP) Committee finished their work of setting criteria to prioritize streets for reconstruction as a portion of the 3/8 cent Pavement sales tax approved by voters in In 2015 through 2017, this portion of the tax is accumulating to cash fund a $2.8 million reconstruction of Flint Street from Johnson Drive to 62 nd Terrace to include curbs, gutters, and sidewalks. Northwestern Fire Station Shawnee will soon have a fourth fire station in the growing northwestern area of the City. The Governing Body was concerned about increased response times and rated the new station among the most urgent of the City s unmet needs. The new station will help response times in all areas of the City by keeping units from one station from being out of service areas as long or as frequently. During 2017 the City will acquire a site, design and begin to build the new facility, order a new fire truck and begin to hire and train the new staff so that the station will be ready to open in 2018.

3 How is the City Budget Funded? 7% Service Charges, Fines and Permits $8.1 Million Franchise Fees $5.2 Million 11% 33% Property Taxes $24.3 Million 11% Other Taxes $7.8 Million 38% Sales Taxes $27.6 Million Sales Tax Sales taxes are Shawnee s largest funding source at 38% of total revenues. The City receives its own taxes as well as a portion of Johnson County sales taxes. The 2017 Budget reflects 2% average growth in sales tax revenues over last year. Sales Tax Breakdown State of Kansas 6.500% Johnson County 1.225% City of Shawnee 1.000% Shawnee Parks and Pipes 0.125% Shawnee Public Safety 0.125% Shawnee Pavement 0.375% Total state and local sales tax rate: 9.350% Property Tax For 2017, the mill rate used to calculate property tax will increase from to The average Shawnee homeowner will pay $730 per year, or $61 per month in City property taxes. Page 3

4 How is the City Budget Spent? $7,273,059 General Government 10% $5,185,012 Community and Economic Development 7% $73,668,314 $26,836,544 Public Works 36% $28,554,177 Public Safety 39% $5,819,522 Parks and Recreation 8% Expenditures The 2017 Budget includes $73.7 million in expenditures, with 75% directed toward the highest priority areas of Public Safety and Public Works. The number of employees in the 2017 Budget is 18 more than last year, which includes 12 new positions to staff the new fire station. Even with this upgrade of fire services, the total number of employees is only eight more than in 2009 before the recession. During that time the City s population has grown by nearly 5,000 people. Conclusion There are already some exciting new developments since the 2017 Budget was adopted. Shawnee s Police Department is one of only two cities in Kansas to receive a grant that will help pay for five new police officers over three years. The Police Department also received a second Department of Justice grant to help pay for every officer to have a body camera, putting Shawnee on the leading edge of transparency and safety for officers and citizens. On November 8, 2016, Johnson County voters approved a ten-year 0.25 cent sales tax to build a new courthouse and coroner s facility, which will raise the sales tax rate in Shawnee to 9.6% starting April 1, Since the City receives a portion of all County sales taxes, in the coming months the Governing Body will discuss the best uses for the new revenue. Next year there will be new citizen survey data and updated information for Priority Based Budgeting (based on the 2017 budget numbers) to help guide budget decisions. Many thanks to the Governing Body, citizens, and staff members whose insight and hard work made this budget process possible. Carol Gonzales City Manager Maureen Rogers Finance Director Page 4

5 Investing in Our Community Safe Community Addition of one police officer to focus on keeping our community safe A new fire station and emergency response personnel in the northwest part of the City to allow crews to respond quicker to neighborhoods Effective Mobility and Reliable Infrastructure $7.2 million to fund street, sidewalk and curb improvements $3.2 million to pay for stormwater maintenance and repairs Addition of one street inspector to ensure roads are repaired in a quality manner Economic Growth and Vitality Nieman Road redevelopment from Shawnee Mission Parkway to 55th Street to include street, pedestrian and storm drainage improvements Extension of Clear Creek Parkway between Clare Road and K-7 Highway to include a sidewalk and a recreational trail Attractive, Healthy, and Well-Maintained Community Adding one codes enforcement officer to help maintain the City s neighborhoods Page 5

6 Investing in Our Community Quality Cultural and Recreational Opportunities Additional improvements to Shawnee Town 1929 with new buildings to provide even more opportunities to engage and educate the community Environmentally Sustainable and Well Planned Community New energy efficient LED streetlights that will help save $100,000 every year Stabilization of the stream bank along the Stump Park trail to preserve the existing trail Good Governance A new City website to enhance communication and engagement with residents Citizen Satisfaction Survey to connect with the community and encourage feedback Page 6

7 2016/2017 GOVERNING BODY MAYOR Michelle Distler 913/ Dan Pflumm 913/ Jim Neighbor 913/ Mike Kemmling 913/ Eric Jenkins 913/ Jeff Vaught 913/ Stephanie Meyer 913/ Mickey Sandifer 913/ Brandon Kenig 913/ Page 7

8 Governing Body Michelle Distler, Mayor City Council Dan Pflumm, Ward I Jim Neighbor, Ward I Mike Kemmling, Ward II Eric Jenkins, Ward II Jeff Vaught, Ward III Stephanie Meyer, Ward III Michael (Mickey) Sandifer, Ward IV Brandon Kenig, Ward IV Carol Gonzales, City Manager Department Heads Vicki Charlesworth, Deputy City Manager Doug Wesselschmidt, Development Services Director/City Engineer Paul Chaffee, Planning Director Maureen Rogers, Finance Director Rob Moser, Police Chief John Mattox, Fire Chief Neil Holman, Parks & Recreation Director Mel Bunting, Information Technology Director Doug Whitacre, Public Works Director Appointed Officials Ellis Rainey, City Attorney Marvin Rainey, City Attorney Emeritus Tim Turner, Municipal Judge Karen Torline, Assistant City Attorney/Senior Prosecutor Page 8

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10 Citizens 2017 Organizational Chart Governing Body City Manager Business Liaison City Attorney Assistant City Manager Judge/Prosecutor Deputy City Manager Human Resources Finance Director IT Director Development Services Director Public Works Director Fire Chief Police Chief Parks & Rec. Director Planning Director Licensing/City Clerk Finance Information Systems Administration Administration Administration Administration Park Maintenance Neighborhood Planning Communications Geographic Information Systems Capital Improvements Facilities Management Operations Patrol Aquatics Development Review Municipal Court Development Review Street Maintenance Prevention Support Services Civic Centre Codes Stormwater Management Recreational Programming Traffic Shawnee Town Page 10 Cemetery

11 LACKMAN RD PFLUMM RD RENNER RD QUIVIRA RD NIEMAN RD City of Shawnee Land Use Guide August 2015 W 47TH ST WILDER DR HOLLIDAY DR CLARE RD W 55TH ST W 67TH ST!( 7 MONTICELLO RD WOODLAND DR SHAWNEE MISSION PKWY 435 JOHNSON DR MIDLAND DR BLACKFISH PKWY W 75TH ST Adopted by the City Council August 10, 2015 The LAND USE GUIDE is not a ZONING MAP; rather it is the graphic representation of the land use goals and policies of the City as identified in the text of the Comprehensive Plan W 83RD ST WOODLAND DR Commercial Mixed Use/Destination Public/Quasi-Public (School) High Density Residential Office/Commercial Rural Residential µ Miles Low Density Residential Medium Density Residential Mixed Density Residential Office/Service Parks/Open Space Public/Quasi-Public Warehouse Industrial Floodplain Page 11

12 History of the Community Shawnee is named for the Shawnee Indians that were relocated here in the late 1820s. The westward push of white settlement had weakened and geographically divided the Shawnees by 1825 when the first of three treaties forced them to relocate to Kansas. Here they found an abundance of timber and free-flowing springs. Because the Shawnee wisely lined the springs with gum tree logs to keep them free of contaminating silt, the settlement was called Gum Springs. In an 1825 treaty with the Shawnee Tribe, the U.S. government gave the Shawnees 1,600,000 acres of land in eastern Kansas, including all of Johnson County, in exchange for their lands in Missouri. By 1854, a new treaty was negotiated, with the Shawnees selling back to the United States all of the land with the exception of 200,000 acres reserved for their homes, amounting to 200 acres for each member of the tribe. In 1854 the Kansas Territory was opened for settlement. The newly repossessed territory was sold by the government to the incoming home-seekers. Shawneetown (later shortened to Shawnee) was platted soon after in One of the State's earliest towns, Shawnee was also the site of the first territorial legislature, and home to the first territorial governor. Located at the intersection of early military and territorial roads leading to the Santa Fe Trail, Shawnee also became the first county seat of Johnson County. In 1862, Shawnee found itself in the middle of Civil War border struggles. The town was virtually destroyed, when it was burned and looted by southern guerillas led by William Quantrill just months before his infamous raid on Lawrence. After the County offices moved to Olathe in 1866, Shawnee became a small farm market center. During the 1950's, the population began to grow as people began moving away from congested urban areas to the smaller outlying towns. People quickly discovered the merits of the City and the population has continued to grow ever since, more than tripling in the last three decades. Page 12

13 About Shawnee Profile of the Government One of the State s earliest towns, Shawnee was also the site of the first territorial legislature, and home to the first territorial governor. Located at the intersection of early military and territorial roads leading to the Santa Fe Trail, Shawnee also became the first county seat of Johnson County. In 1856, when Kansas City was barely seven years old, Gum Spring became Shawneetown and was incorporated in The City became a City of the First Class in Shawnee is a suburban community located in northwestern Johnson County adjacent to I-35, I- 435, and K-7 Highway, and is approximately 9 miles southwest of downtown Kansas City. Shawnee covers 42.3 square miles in a strategic location within the metropolitan area. Its location along several major transportation routes, and ease in access to the entire metro area has been a major factor in the City s growth and development. The City is a desirable residential community with an expanding commercial and office sector. The City has a mayor-council-manager form of government, with the Mayor elected at large and Council members elected by ward. The Mayor and Council members serve four-year overlapping terms of office. The city provides a full range of services, including police and fire protection, emergency preparedness, emergency medical response, street and storm drainage maintenance, comprehensive recreation and cultural events, planning and zoning management, codes administration and general administrative services. Economic Condition and Outlook Continuing the trend since mid-2014, developers have made infrastructure improvements in additions to previously platted subdivisions as well as in new plats. A newly approved residential subdivision north of Clear Creek Parkway between Gleason Road and Clare Road will add over 300 homes in the western area of the City. Multi-family development continued in 2016 with units opening in the Prairie Pines Townhomes, a 220 unit development at 55th and K-7; opening of the Village Cooperative, a senior living development on Johnson Drive east of Pflumm Road; and construction of remaining units at Reghan Place, a townhome development at 63rd and Lackman Road. New commercial construction and renovation continues in the downtown area, resulting in nearly $60 million in public and private investment since The Governing Body extended through March 2018 the suspension of the City s excise tax on the platting of real property for the purpose of stimulating economic development activity within the City. In order to receive a suspension of the excise tax, the developer must enter into an agreement with the City to meet certain construction milestones. Since approval of the abatement program, the City has approved over $3 million in excise tax abatement agreements for projects such as single family home construction, senior living, townhome developments, and industrial developments. Other projects of note are completion of the second of five 170,000 industrial flex space buildings at Westlink Business Park located on 43rd Street east of K-7 Highway. Plans are now underway for the third building. A new 114 room Holiday Inn Express opened in early Construction is underway on a 65 room Comfort Inn & Suites and a 78 room Fairfield Inn & Suites, both at Midland Drive and Renner Road. Federated Rural Electric Insurance Exchange is constructing a 36,600 square foot office building at Renner Road and 79 th Street for their new corporate headquarters. Several new restaurants and businesses have opened in the last year, including McAlister s Deli, Nuts & Bolts, and The Other Place. Shawnee B&B Theatres just east of Renner Road and Midland Drive recently completed the first phase of a complete renovation that will restore the theater Page 13

14 About Shawnee complex to one of the most advanced in the Kansas City metro area. Additionally, the City continues to draw new companies and support existing companies through the Shawnee Entrepreneurial and Economic Development (SEED) program. The total labor force and number of persons employed in the City of Shawnee is estimated to be 33,000. Shawnee s rate of growth in both the total labor force and the total employment remains strong. Shawnee remains numerically one of the fastest growing cities in the State of Kansas. As of January, 2016, the City s population was estimated to be 65,260 and is projected to be 70,400 in The City s total assessed valuation for the 2017 budget increased 7.6% from 2016, from $767,631,712 to $825,753,501. Educational Facilities Three public school districts provide educational services to City residents. Unified School District 232 (De Soto) has six elementary schools, one middle school, and one high school located in the City. Unified School District 232 had a total 2015/16 enrollment of 7,055 students in grades K-12. Unified School District 512 (Shawnee Mission), with six elementary schools, one middle school, and one high school located in the City, has a district total K-12 enrollment of 27,521 students for the 2016/17 school year. A small portion of Unified School District 233 (Olathe) is also located in the City. In addition, there are five private schools in the City. Post-secondary education is available through a variety of sources. These range from the undergraduate and vocational occupational training at Johnson County Community College (rated as one of the top 10 community colleges in the nation). Undergraduate and post-graduate degrees are available at the Kansas University Edwards Campus in Overland Park, and the Kansas State University Innovation Campus in Olathe. In total, there are six community colleges, nine liberal arts colleges, six technical and medical schools and two universities in the Kansas City region. Health Care Facilities There are three full service hospitals located just outside the City limits: Shawnee Mission Health, Overland Park Regional Medical Center, and Providence Medical Center. Overland Park Regional, KU Medical Center and Shawnee Mission Health all have satellite emergency or clinic facilities in Shawnee. Utilities The City s utilities are supplied by independent entities that are not municipally controlled. Water District #1 of Johnson County serves the City s water needs. The Johnson County Unified Wastewater District provides sanitary sewer service for City residents. Electricity is provided by Kansas City Power and Light Company and Westar Energy, while Kansas Gas Service and Atmos Gas Company both supply natural gas services to the City. Transportation The City is accessible by four Interstate highways. I-435 runs north-south through the center of the City and connects directly to I-35, which runs along the City s eastern border and I-70, directly north of the City. I-435 provides City residents with direct access to I-29 and the Kansas City International Airport. Shawnee Mission Parkway runs east and west through the center of the City and Highway K-7 runs north and south two miles east of the City s western border. Page 14

15 About Shawnee Rail service is provided by the Santa Fe Railway and the Burlington Northern. The Kansas City International Airport is approximately 30 minutes from the City. Also the Kansas City Downtown, Johnson County New Century and Johnson County Executive Airports are all within 15 miles of the City. Tax Base Taxpayer Assessed Value % of Total Bayer Healthcare LLC $11,314, % Wal-Mart 6,864, % 10 Quivira Plaza 14 A LLC 6,016, % The Shawnee Station, L.L.C. 5,768, % Greens at Shawnee 4,158, % LT Industrial Limited 3,341, % Tower Properties Company 2,929, % FedEx Ground Package System 2,848, % BK Properties LLC 2,730, % Shawnee Village Retail LLC 2,672, % Employment Total $48,643,446* *Source: Johnson County Clerks Office The City is primarily residential in character with many of its residents commuting to jobs within other areas of the Kansas City metropolitan area. Larger employers in the City include Deffenbaugh Industries, FedEx Ground Package System, Bayer HealthCare, NazDar Industries, and McLane Foods. Page 15

16 Shawnee Community Profile The City of Shawnee is a suburban community located in the Kansas City metropolitan area, specifically in Johnson County. Shawnee covers square miles. Date of Incorporation 1856 Shawneetown is incorporated on August 10, Re-incorporated as Shawnee, a city of the 3rd class, on June 10, Incorporated as a city of the 2nd class on January 29, Form of Government Elected Mayor 8 Elected Council Members 4 year, staggered terms Population 48,032 (U.S. Census 2000) 56,915 (December 2005) 60,454 (July 2008) 62,209 (2010 Census) 65,260 (August 2016) Age Group Populations Population over 65 (10.5%) Population over 62 (13.1%) Population over 18 (72.4%) Population under 18 (27.6%) Population under 5 (6.7%) Education Shawnee Mission School District DeSoto School District Community Information Median Age 36.3 years (Community Survey 2013) % High School Graduate 94.4% (Community Survey 2013) % College Graduates 42.2% (Community Survey 2013) % White Collar Workers 84.7% (Community Survey 2013) % Homeowners 72.1% (Community Survey 2013) Median Household Income - $73,311 (Community Survey 2013) Median Family Income - $85,545 (Community Survey 2013) Mill Levy Elevation - 1,060 feet above sea level Climate - Average annual temperature is 55 degrees; the January average is 29 degrees and the July average 78 degrees. Average annual precipitation is 38", snowfall 23". Health Care - 3 hospitals are located just outside the City limits. Many doctors, dentists and chiropractors practice within the City. Highways - I-35, I-70, I-435, U.S. 69, K- 7, K-10 Housing Units Single Family- 19,051 (73%) Duplex- 582 (2.2%) Multi-Family- 6,478 (24.8%) Total: 26,111 (August 2016) , ,478 Single Family Duplex Multi-Family Page 16

17 2017 Budget at a Glance General Facts Final Mill Levy Final Valuation $825,753,501 Property Tax Levy (less 3.57% estimated delinquency) 21,980,869 Total All Fund Revenues $ 77,848,112 Total All Fund Expenditures $ 78,431,380 Projected Ending Fund Balance $ 26,526,635 General Fund Reserve as a Percentage of Revenue 31% General Fund Reserve $14,528,970 Total Published Budget (Including Fund Balance) $104,958,019 Maximum 2017 Full-Time Appointed Employees 307 Maximum 2017 Part-Time Appointed Employees 35 Total FTE Budgeted Revenues Taxes 63,324,421 Intergovernmental 1,762,411 Licenses and Permits 924,500 Service Charges 5,213,384 Fines 1,311,900 Use of Money and Property 223,155 Miscellaneous 5,088,340 Total Revenue $ 77,848, Budgeted Expenditures General Fund $50,121,450 Public Safety Equipment Fund 1,277,645 Special Narcotics Fund 6,000 Special Highway Fund 7,150,191 Special Park & Recreation Fund 97,500 Special Alcohol Abuse Fund 330,904 Park & Recreation Land Use Fund - Transient Guest Tax Fund 481,000 Parks & Pipes 260,000 Cemetery 25,000 Stormwater Utility Fund 3,281,479 Public Safety Fund 1,429,680 Neighborhood Revitalization 323,135 Equipment Reserve Fund 2,339,929 Economic Development Fund 2,007,093 CID/TIF/TDD Fund 980,475 Debt Service Fund 8,319,899 Total Expenditures $78,431,380 Page 17

18 2017 Budget Process and Calendar The City budget is one of the most important policy documents adopted by the City Council each year. As a result, planning for the annual budget begins nearly a year before the budget s fiscal year begins. The Finance Department coordinates the annual budget process in close consultation with the City Manager. A budget kick-off meeting is held in March with department directors to initiate the annual budget process. The kick-off is an opportunity to review the upcoming budget process, financial outlook, and share information. In the following month, departments develop base budgets and any proposals based on changing needs and programs. Once submitted, the requests are evaluated by the Budget Team (Finance Director, City Manager, Deputy City Manager, and Assistant City Manager). The Budget Team analyzes the impact of the requests on the financial forecast and meets with each department director and staff members to discuss alternatives and potential budget recommendations. The proposed budget is presented to the City Council over a series of meetings in May and June. Council provides direction and input to finalize the budget. A formal public hearing is conducted, in compliance with Kansas state statutes, prior to adopting the budget to allow citizens to express any comments or concerns. Adoption of the budget is required on or before August 25 of each year. The budget the City Council adopts goes into effect on January 1 of the next fiscal year. Page 18

19 2017 Budget Process and Calendar March 2016 Departments Develop Budgets (February 22 March 21, 2016) o Base budget requests o Review salary projections o Equipment, Vehicle and Facility Requests Review Special Revenue Funds April 2016 Staff Budget Review (March 23 April 1, 2016) o City Manager, Deputy City Manager, Assistant City Manager and Finance Director evaluate department requests and impact on financial forecast o Meetings with Department Directors to refine budget recommendations May 2016 Committee Meeting #1 (May 3, 2016) o Present Budget Overview o Review Revenue Assumptions o Tax Lid Concepts o Budget Preview Committee Meeting #2 (May 17, 2016) o Total Budget by Function o Forecast Highlights o 2015 Work Plan o Shawnee Chamber of Commerce Presentations (Economic Development and Transient Guest Tax Fund) June 2016 Council Committee Meeting #3 (June 2, 2016) o Department Presentations by Function Council Committee Meeting #4 (June 21, 2016) o Final Wrap up and Discussion July 2016 City Council Meeting (July 11, 2016) o Council Establishes Budget Limit o Notice of Public Hearing Published August 2016 City Council Meeting (July 25, 2016) o Public Hearing Held o Council Adopts Budget Budget Submitted to County Page 19

20 Comprehensive Financial Policy Summary Sound financial, budgetary and economic principles are part of creating a solid financial plan. Shawnee s budget incorporates the following long-term and short term-financial policies and guidelines, as set forth in the City s Comprehensive Financial Policy approved October Financial Planning Policies Balanced Budget and Budgetary Basis The City Manager is responsible for recommending a balanced budget to the Council for adoption. The annual budget adopted by the Governing Body shall be balanced, so that estimated expenditures do not exceed estimated revenues available for appropriation in each fund. State statutes prohibit a budget which projects spending in excess of available resources (current revenues and available fund balance). The City s budget is prepared on the modified accrual basis for all funds, and assumes that prior year ending cash balances may be utilized to balance the budget. The City avoids the use of non-recurring and unpredictable revenues to fund ongoing expenditures. Ongoing expenditures will be funded with reliable, ongoing sources of revenue. Long Range Financial Planning Ten Year Financial Forecasts The City will create and maintain a ten year financial forecast for each budgeted fund. Council will approve the revenue and expenditure forecasts during each annual budget process. The annual budget and Capital Improvement Program must be in balance with the long-term financial forecasts. The assumptions used for revenue projections will incorporate review of national, regional and local economic indicators, such as population growth, personal income growth, inflation, business growth, unemployment, retail trends, and property valuation trends. The City's goal is to maintain Special Revenue Fund balances in each fund at a positive balance over the entire ten year forecast. Six Year Capital Improvements Program (CIP) A Capital Improvement Plan (CIP) shall be collaboratively developed for a six-year period to allow for appropriate planning. The CIP shall be reviewed each year by the City Council and City Planning Commission. The CIP will include: o o o o o A clear summary of its contents A list of all capital improvements proposed for the ensuing six year period, along with supporting information for each project. The dollar amounts shown for internal funding sources in the CIP must match the appropriate ten year forecasts. Cost estimates, methods of financing, and recommended time schedules for each project The estimated annual operating impact of capital projects A statement on the financial capacity of the City to undertake these projects, and the impact the six-year program will have on the City s goals and objectives, credit rating, and any legal limitations. Capital projects should support City Council goals and objectives and must be consistent with the ten year financial forecasts. When possible, capital projects constructed in response to residential or commercial development should be financed through growth in the tax base, development fees or special assessments. Page 20

21 Comprehensive Financial Policy Summary Major changes to the CIP should be reviewed and approved by the City Council. Other Financial Planning Policies The City will periodically inventory capital assets in order to verify the location and assess their condition. Information from such inventory shall be used to assist in determining a prudent, orderly replacement of City-owned assets through the operating budget and CIP. Such inventory should be performed at least every three years. The City s goal is to provide for adequate, ongoing funding for required equipment replacement through the Public Safety Equipment Fund and the Equipment and Maintenance Replacement Fund. The City will fully fund the annual required contribution for the defined benefit Supplemental Retirement Plan each year. Revenue Policies The City avoids the use of non-recurring and unpredictable revenues to fund ongoing expenditures. Ongoing expenditures will be funded with reliable, ongoing sources of revenue. In order to aggressively pursue an economically diversified tax base, the City s goal is for at least 30% of the real estate portion of total assessed valuation to be derived from properties classified by the County Appraiser as commercial or industrial. The City establishes and evaluates fees and charges based on the cost of service, community benefit and cost recovery best practices. The goal is to review and consider possible revisions to fees annually to avoid significant adjustment in any single year. Shawnee seeks to partner with other intergovernmental agencies to share operational services, facilities, and equipment-related costs when prudent and beneficial, and will seek sustainable intergovernmental funding to support ongoing operational and maintenance expenditures. The City will aggressively seek funds from federal, state, county and other agencies for use in implementing the CIP, and shall normally give priority to projects that maximize the use of outside funds. Debt Policies Long term debt shall not be issued to finance ongoing operations. Debt shall be issued in a manner in which the term of the debt financing does not exceed the asset s useful life. Debt shall be issued primarily as a financing tool of the City s CIP. City staff will evaluate the capacity of the Debt Service Fund to service each proposed bond issue, considering current debt level, economic conditions, availability of outside funding sources, and key debt indicators. To maintain and improve the City s bond rating, the Finance Director will monitor reports and financial statements indicating the City s financial position and results of operations. The Finance Director will also periodically consult with the City s financial advisor to review municipal bond markets and trends in municipal finance. Debt structure shall be designed in accordance with the following, unless the City s financial advisor recommends an alternative approach: o Fixed rate obligations only. o o Optional prepayment provisions may be included in each bond issuance. Derivative transactions are prohibited unless specifically approved by the City s Governing Body. Bond proceeds shall be invested in accordance with the City s Investment Policy (PS-39). Debt shall not exceed 30% of the assessed valuation, as authorized under K.S.A The City shall hire highly qualified bond counsel and financial advisors on a competitive method whenever feasible and cost beneficial. The financial advisor shall maintain complete independence for the underwriting process. Page 21

22 Comprehensive Financial Policy Summary The City should market its debt issues on a competitive basis, unless specific predetermined criteria are met, such as unusual credit quality or security structure, issue size, or market access. If a negotiated sale is advised, the City will competitively select the underwriter(s) needed to accomplish the structuring, marketing, pricing, and sale of the bonds. The scheduled maturities of long-term obligations should not exceed the expected useful life of the capital project or asset(s) financed. The City shall insure that it fully complies with all state and federal regulatory requirements, including post-issuance compliance related to continuing disclosure, private use and arbitrage rebate. Refunding or prepayment of outstanding debt may occur when the possibility of interest cost reduction exists, or the city wishes to restructure its debt service and/or amend its contractual bond requirements. Fund Balance Policy General Fund unassigned fund balance is targeted to be at least 30% of the subsequent year s budgeted revenues. The target amount is expressed as a goal, and may fluctuate from year to year in the normal course of operations. The minimum for the General Fund unrestricted fund balance is 17%, which represents the Government Finance Officers Association (GFOA) recommended minimum of no less than 2 months of operating revenues/expenditures. Fund balance may be reduced below 30% for emergency needs in case of natural disaster, prolonged economic downturn, or other non-recurring need at the Governing Body s discretion. If it is anticipated at the completion of any fiscal year that the projected amount of unassigned fund balance in the General Fund will be less than the minimum established target, the City Manager shall prepare and submit in conjunction with the Ten Year Financial Forecasts a plan for the expenditure reduction and/or revenue increases necessary to restore the minimum target amount within a five year period. Financial Accounting and Reporting The City will adhere to generally accepted accounting principles (GAAP), including pronouncements by the Government Accounting Standards Board (GASB). The City will adhere to a policy of full and open public disclosure of all financial activity and information. The City will strive to provide transparent financial information which is easily accessible by the public. Each year, the City will employ an independent public accounting firm to perform the annual audit in accordance with K.S.A Department directors will have primary responsibility for ensuring that expenditures adhere to the appropriations of the adopted budget. The Finance Director and City Manager will monitor the City s financial position by cost center, department and fund, including revenues and expenditures, in relation to the adopted budget and long term financial forecast. If adjustments are needed in the City s expenditures in order to ensure the City s long term financial sustainability, the City Manager, at their discretion, will: o o Administratively reduce or redistribute annual budget allocations, and/or Provide information to the Governing Body regarding options for expenditure adjustments. The City Manager will establish and enforce uniform Purchasing Policies and Procedures in order to maximize the use of financial resources through sound procurement practices. Page 22

23 Basis of Accounting and Budgeting, Fund Structure Basis of Accounting and Budgeting Basis of accounting refers to the specific timing when revenues and expenditures are recognized in the accounts and reported in the financial statements. The City s audited financial statements are prepared on a modified accrual basis of accounting, according to generally accepted accounting principles (GAAP). The modified accrual basis is a mixture of cash and accrual basis accounting, under which revenues are recognized in the current year if both measurable and available. Revenues are generally recognized when cash is received, when collectible during the current period, or if the actual collection occurs after the end of the period but in time to pay current year-end liabilities. Expenditures are recorded when a liability is incurred. Exceptions to this rule include: (1) accumulated unpaid vacation leave, sick leave, and other employee amounts which are recognized when paid, and (2) principal and interest payments on general long-term debt which are recognized when paid. For budgetary purposes, the City also uses the modified accrual basis of accounting for all funds with the following exception in the Governmental Funds: Budget amounts are encumbered when the City enters into contracts with vendors. Encumbrances outstanding at year end are considered expenditures in the current year for budget purposes, but not until goods or services are received for financial reporting purposes. Only revenues and expenditures anticipated during the fiscal year are included in the budget. Unexpended operating budget funds revert to fund balance at the close of a fiscal year unless the City has entered into a contractual obligation, in which case the funds are considered encumbered and a reserve for that encumbrance is recorded. Unexpended capital reserve funds are carried forward from year to year until projects are officially closed. Fund Structure The City s Budget is organized into funds, each of which is considered a separate accounting and reporting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its revenues and expenditures, or expenses where appropriate. The types of funds are all Governmental Funds (General Fund, Special Revenue Fund, Debt Service Fund, and Capital Project Funds). The Capital Project Funds are not required to be budgeted because they are authorized on an individual separate action by the Council. Page 23

24 City of Shawnee Budgeted Personnel Position Summary BUDGET 2015 BUDGET 2016 BUDGET /- Position Full-Time Part-Time Seasonal Full-Time Part-Time Seasonal Full-Time Part-Time Seasonal Change* ELECTED: City Council APPOINTED: City Manager's Office City Manager Legal City Clerk Communications Human Resources Municipal Court (0.50) Total Administration Information Technology Finance Planning Planning Codes Administration Development Services (1.00) Public Works Administration Street Maintenance (1.00) Fleet Maintenance Traffic Services (1.00) Codes Administration (9.00) Stormwater Total Public Works (5.50) Police Administration Patrol Support Services Total Police Fire Parks & Recreation Administration Parks Maintenance Aquatics Civic Centre Recreation Programs Shawnee Town Total Culture & Recreation TOTAL APPOINTED TOTAL EMPLOYEES TOTAL 2017 FTEs 337 Police Patrol * TOTAL 2017 FTEs - 5 Additional Officers funded by Dept. of Justice Grant (approved November 2016) 342 Staffing Level Changes 18 additional full time employees were approved in the 2016R/2017 budget process: one Code Enforcement Officer, one Street Inspector, one Police Officer and 12 Firefighters were funded with a 1.52 mill levy increase. One new Information Technology employee was authorized from existing mill capacity. Two Stormwater Maintenance Workers were approved in November of 2016 with funding from a Stormwater Fee increase approved during the budget process. The two additional.5 FTE increases are a result of restructuring within the department. *Five additional Police Officers were approved after the budget adoption in November 2016 and will be funded by a grant from the Department of Justice. Note: Number of seasonal employees hired per year (as well as some Shawnee Town and the Civic Centre part time employees) depends on factors including hours each employee can work, availability, etc. Overall seasonal and Civic Centre and Shawnee part time budget hours are the guiding factor, rather than number of actual employees in those positions. There may be a decrease or increase in some instances, but no net gain or loss to FTEs. The numbers in these instances are best estimates for anticipated number of employees hired to fulfill the needed hours. Reductions and additions are based on best estimates of 2,080 FTE hours represented by full time and part-time positions. Total FTEs exclude elected officials. Page 24