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Tough times and difficult decisions

2009 Revised & 2010 Unified Government Proposed Budget July 13, 2009. Tough times and difficult decisions. Where were we in the Summer of 2008?. Bright Future – 2013 and beyond Lean years between 2009 and 2012 Symbolic continued decrease in property tax rates

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Tough times and difficult decisions

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  1. 2009 Revised & 2010 Unified Government Proposed Budget July 13, 2009 Tough times anddifficult decisions

  2. Where were we in the Summer of 2008? • Bright Future – 2013 and beyond • Lean years between 2009 and 2012 • Symbolic continued decrease in property tax rates • Maintained Commission goals and priorities • Expanded targeted service levels • Diversify Revenues

  3. A solid financial planin the Summer 2008 • To Control costs • Implemented hiring freeze • Delayed Capital projects • Anticipated new Casino Revenues • Decreased property tax rate slightly • Planned Prudent use of fund balance • Maintained service levels

  4. But in Fall 2008…World Wide Financial Crisis • National Collapse of Housing Market • Credit Markets close down • Financial Institutions default • National Economic Recession • Unemployment skyrockets • State of Kansas Budget Crisis

  5. State Budget Crisis takes Heavy Toll onUnified Government Revenues • $6.4 m cut from anticipated revenues • Machinery & Equipment Tax elimination results in major revenue loss; reimbursement payments stopped • Special City-County Highway Fund

  6. Unified Government RevenuesDisappearing Dollars in 2009 • State Funding gone $2.7m • Property Tax $5.5m • Sales Tax $2.5m • Mortgage Tax $1.1m • Building Permits $1.4m • Gaming Revenue $1m • Investment Earnings $1.2m

  7. Total Loss of Revenuesfor 2009 UG BUDGET $15.4 Million • Money we had expected to receive, must NOW be cut from the Unified Government Budget

  8. Further Declining Dollars in 2010 • 7% reduction in property values • 15% Tax Delinquency rate • Continuing Sales Tax decline • Further reduction from State

  9. We find ourselves in the same position as other Local Governments “KC Council OK’s pact with Firefighters Union that includes concessions” “City lays off employees as it tries to address budget shortfalls” “Police, Fire, Grass Streetlights, among City of Topeka Cuts” Kansas City Star The Olathe News WIBW.com “Wichita considers layoffs to cover budget shortfall” “City Budget crisis may take officers off streets” “Overland Park wants to cut budget by $67 m in 5 years” “Dallas City Council knows “brutal” budget cuts coming” Wichita Eagle Cincinnati.com Kansas City Business Journal The Dallas Morning News

  10. Options to Deal With the Problem • On the Expense Side • Cut personnel expenses • Eliminate non-essential services • Reduce primary essential service levels • On the Revenue side • SALES TAX - Give serious consideration to increasing sales tax , which requires public support and referendum • ECEP - Economic Crisis Emergency PILOT • Temporary inter-fund deferrals • Federal Stimulus Dollars

  11. Limited Impact 0f Federal Stimulus Dollars on General Funds • $ 1,000,000* COPS (GF per year – over 3 years) • $ TBD * SAFER (GF per year – over 4 years) • $ 500,000* Byrne Grants (2) (GF- over 2 years) • $ 840,000 Justice Assistance Grant (GF-up to 3 years) • $ 204,000 Justice Assistance Grant (GF-up to 3 years) • $5,000,000 State Avenue – 47th to 69th Streets (CMIP Project long-term impact to B& I Fund) • $ 650,000 CDBG • $1,398,000 Energy Efficiency and Conservation Block Grant • $2,000,000 Transit (Buses and Preventive Maintenance) • $3,600,000 NSP • $1,003,000 Homeless Prevention • $2,700,000 Adult Employment & Training • $2,200,000 Summer Youth Program • $ 98,000 Community Health Centers • $ 85,000 Aging • $1,200,000 Weatherization Assistance Program • $ 775,000 I-435 & Woodend Road – Edwardsville • $ 440,000 138th Street – Bonner Springs *Competitive grant application pending

  12. Key Points of the Proposed 2009/2010 Budget • EXPENDITURES - Implement overall reductions in expenditures across the organization generally of 10% or more • REVENUES - Selectively increase revenue opportunities to offset funding losses • SERVICES - Minimize impact on citizens by maintaining essential services and reducing non essential services • TAXES - Hold the line on the Property Tax Mill Rate; thus NO increase in Property Taxes and in fact most will see an average 7% reduction in their UG property tax bill for 2010

  13. Hold the Line on the Tax Rate If current tax rate is maintained Tax payers would a see an average 7% decrease in UG tax bills resulting from a 7% average reduction in property values.

  14. The Proposed Budget Includes • HIRING FREEZE and retirement incentives will result in a reduction of more than 300 positions/15% of workforce by April 1, 2010 • AVOID LAYOFFS while positions will be eliminated, every effort is being made to avoid layoffs • REDUCTION IN PERSONNEL EXPENSES • Must honor the collective bargaining process with the multiple labor unions representing more than 60% of the workforce • Continue Salary/COLA freezes • Furloughs begin this August through the end of 2010; general fund employees would be off one day a month without pay excepting sworn public safety personnel

  15. The Furlough Concept “Sacrifice of many to avoid layoff of individuals “ Proposed Furlough Schedule - 2009 *Furlough Floater Day off to be scheduled similar as vacation **District Court may be required to be open, thus courts buildings only may be open on limited basis. Other offices such as D.A. and grant funded units such as Health Department, may be operating on limited open basis as well on dates scheduled for closure.

  16. Proposed Furlough Schedule - 2010 *Furlough Floater Day off to be scheduled similar as vacation **District Court may be required to be open, thus courts buildings only may be open on limited basis. Other offices such as D.A. and grant funded units such as Health Department, may be operating on limited open basis as well on dates scheduled for closure.

  17. To Reduce Major Costs In Jail Operations Unprecedented Cooperation Underway Joe Reardon, Mayor/CEO Moe Ryan Municipal Court Judge Wayne Lampson Chief Judge John Mendez Commissioner At-Large District 1 Jerome Gorman District Attorney Tom Cooley Commissioner, District 7 Don Ash, WYCO Sheriff

  18. Cost Containment for 2009/2010 – WYCO Jail To control the skyrocketing costs of housing inmates Immediate efforts are underway to reduce the average length of stay including: • FARM OUTS - Shift to alternate, lower cost facilities to house inmates that are farmed out • HOUSE ARREST - Expand options for utilizing House Arrest for inmates not posing a threat to the public • PROCESSING OF INMATES - More timely and efficient processing of inmates in and out of the WYCO facility • TRANSFER OF INMATES – Reducing holding times of inmates transferring to other facilities such as Kansas Department of Corrections (KDOC) • SENTENCING GUIDELINES – Review of practices in both District Court and Municipal Courtbutassuringsteps taken do not endanger the citizens of Wyandotte County • Efforts underway estimated to reduce expenditures by: 2009 - $1,050,000 2010 - $2,700,000 • Review of long-term need and options being undertaken as well

  19. The Proposed Budget IncludesReduction on UG Services • Public Safety recruit classes limited to funding from COPS/SAFER Grants • Major reductions in funding for Parks and Recreation • Reduction in funding for Snow Removal; Weed cutting; Street Cleaning • Decrease in Public Transportation Services • Cut UG funding for the County Historical Museum/limited operations only • Suspend County CiFi Program to KCK/Bonner Springs & Edwardsville • Reduction in Building Security expenses by closing access points • Staffing adjustment for Public Safety 9-1-1 Dispatch Center • Reduction in funding for Senior Citizen Utility Rebate • Scale back 3-1-1 Program • Freezing of all Capital expenditures excepting Grant and Federal Stimulus Funded projects

  20. Funding Reductions to Outside Agencies in 2010 • Mental Health – reduced from $628k to $565k • CVB – reduced from $750k to $675k • County Fair Board – reduced from $198k to $77k • Extension Service –reduced from $431k to $388k • Kaw Valley Arts – reduced from $48k to $18k • Neighborhood Group’s NBR – cut 10% • WYEDC – cut 10%

  21. Changing Roles and Restructuring Responsibilities • WYEDC – Assuming greater Eco Devo role • Parks Rangers to Sheriff/PD First Responder to 9-1-1 • Manager of Accounting and Payroll merged • Shifting responsibilities of Risk Management/WC • Shifted Constituent and Organizational Affairs duties • To avoid layoffs – shift and retrain

  22. Special One-Time Deferrals • Inter Fund Transfers and Deferrals – one time shift from existing UG accounts that must be repaid • Employee Health Insurance Fund • Environmental Trust Fund supported by the Residential Solid Waste Management Program

  23. Economic Crisis Emergency PILOT (ECEP) Relief Fund • Last year we increased the UG/BPU PILOT fee to 9.9% and would require reauthorization in 2010 • Reluctantly propose increase to 12.8% as an emergency economic crisis relief measure • Increase would phase out 1% per year over the next three years • Temporary in nature - burns off in 3 years

  24. The Current 2010 Unified Government Annual Budget - $250.1* Million All Funds * Not including grants

  25. Judicious Management Required • Must carefully monitor the situation as fund balances remain low • No room for slippage or surprises • Must be cautious and conservative in managing through these difficult financial times • Must also focus on restoring fund balances to adequate levels to maintain favorable credit status and bond ratings

  26. Budget Calendar May 7 7pm1st Budget Public Hearing (CDBG) July 9 7pm Public Comment on proposed budget July 13 5pm Budget Presentation followed by Work Session July 16 4pmBudget Work Session– Set Maximum Mill Levy Set Furlough Schedule July 20 7pm*Budget Work Session July 23 4pmBudget Work Session July 27 4pmBudget Work Session July 30 4pm Budget Work Session 5PM Public hearing 7pm Adopt Budget & CDBG Consolidated Plan ECEP Initiative will require meet and confer meeting with Board of Public Utilities BUDGET WORKSHOPS WILL BE HELD IN 6TH FLOOR TRAINING ROOM *Budget Work Session to be held immediately following Standing Committee meetings

  27. The Future • Our Bright future • Casino dollars – est. in 2011/2012 • STAR BOND pay-off – est. in 2013 • The future will be different, and even after the recession recedes, the fundamentals for local government will evermore be changed from what we know from the past • Future remains bright, we will manage through the current challenges and be in a better position our organization and our community to be able to take advantage of opportunities

  28. To Meet these Challenges will Require Unprecedented Sacrifice, Commitment and Cooperation from: • Our Citizens • Outside agencies • Other stakeholders such as Neighborhood Groups • Board of Public Utilities • Our 13 Labor Unions • The Unified Government Employees • The Unified Government Commission

  29. Budget Calendar May 7 7pm1st Budget Public Hearing (CDBG) July 9 7pm Public Comment on proposed budget July 13 5pm Budget Presentation followed by Work Session July 16 4pmBudget Work Session– Set Maximum Mill Levy Set Furlough Schedule July 20 7pm*Budget Work Session July 23 4pmBudget Work Session July 27 4pmBudget Work Session July 30 4pm Budget Work Session 5PM Public hearing 7pm Adopt Budget & CDBG Consolidated Plan ECEP Initiative will require meet and confer meeting with Board of Public Utilities BUDGET WORKSHOPS WILL BE HELD IN 6TH FLOOR TRAINING ROOM *Budget Work Session to be held immediately following Standing Committee meetings

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