Pre-Budget Financial UpdateDEPARTMENT OF FINANCE
AND ADMINISTRATION
Rodney Franz, Director
300 West Ash, P.O. Box 736
Salina, Kansas 67402 -0736
TELEPHONE (785) 309 -5735
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June 18, 2012
Study Session Summary
Pre - Budget Financial Update
FAX (785) 309 -5738
TDD (785) 309 -5747
E -MAIL rod.franz @salina.org
Website: www.salina - ks.gov
The budget outlook for the balance of 2012 and 2013 is cautiously optimistic, certainly
compared to previous years. Sales taxes are showing some growth, and 2012 sales taxes
are projected to be approximately 5.8% higher than 2011. Building permit activity is up, and
building permit fees received year to date are significantly above previous years. We may
reach, or possibly slightly exceed budgeted levels in 2012. Franchise tax receipts will be
significantly short of budget, and the future for property tax receipts appears to be stagnant at
best.
Funds relying on service fee revenue appear to be performing well, including the Golf Course,
which is showing signs of being cash flow positive this year.
Expenditures for 2012 are currently projected to be slightly under budget.
The result is that fund balances show stability or modest growth in all significant operating
funds.
Despite a small amount of projected growth in the General Fund balance, it remains below
optimal levels. The current target for the fund is set at $3,400,000. We are still below that
level. The target is too low. The optimal target would be at about 15% of current year
revenue /expense, or $5,500,000.
2012 Pre - Budget Financial Status
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2012 Pre - Budget Financial Status
2013 Commission Operating Budget Calendar
• June 181h
Study Session: 2012 Update and overview
• June 25th
Transportation
• July 2nd:
Update on Current CIP /Financial Projections. Building
Authority
Update?
• July 5th:
Target for Distribution of Materials to the City Commission
• July 9th:
Budget Overview; Health Department, Municipal Band
• July 16:
Economic Development, Chamber, Tourism, SDI
• July 23:
Other Issues and Options; Fees, Personnel
• August 6:
Final Issues and Options, Public Hearing
• August 13:Adoption
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2012 Pre - Budget Financial Status
saints
• Budget Outlook
- Stagnant General Fund Revenues
- Sales tax; some growth (2 -3 %)
- Property tax base uncertainty
- Franchise tax off (Gas in particular)
- Machinery and Equipment Tax Exemption
- Investment Rates (less than 1 % return)
- On the plus side, year -end 2011 was close to planned
levels, as adjusted.
- Target: $3,400,000
- Budget: $3,000,000
- Actual: $3,007,119
2012 Pre - Budget Financial Status
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• Budget Outlook
- Revenues
- Property Taxes
- As projected
- Sales Taxes
- Projected at current YTD growth and recent months.
- Results in increase of about $200,000 above budget
- Increase of $682,000 (5.8 %) over 2011
- Large range of "reasonable" estimates
- Franchise Fees
- $425,000 under budget
- Shortfall Mostly in Gas Franchise
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2012 Pre - Budget Financial Status
saints
• Budget Outlook
- Revenues
- EMS charges to Saline County
- Include $168,000 attributable to 2011
- Municipal Court fees projected on YTD experience
- Building Fees up $80,000 ytd (68 %)
- Anticipated to reach budget ($300,000) this year
- 2011 was $60,000 short (20 %)
- Pool fees
- 2010: $489,053
- 2011: $482,699
- 2012 Budget: $480,000.
- So far, participation is good
2012 Pre - Budget Financial Status
• Budget Outlook
- Revenues
- Guest tax projected at $1,350,000
- YTD up $20,000 (3 %) comp. to 2011
- Should make budget
- Gas tax appears to be on estimate
- YTD up $35,000 (2.5 %)
- Sanitation fees projected to be $200,000 above budget
- Solid Waste fees projected to be $100,000 above buget
- Anticipate significant decline in 2013 ($450,000)
- Equivalent to $5.50 per ton
- Other utility charges seem to be on- target
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2012 Pre - Budget Financial Status
seine
• Budget Outlook
- Revenues
- Golf Revenues
- Year to date play has been very good
- 5 months, 2012: $ 321,731
- 5 months, 2011: $ 229,121
- Annual results depend on "walk -in" performance for
the balance of the year.
- 5 month expense, 2012: $293,199
- 5 month expense, 2011: $262,289
2012 Pre - Budget Financial Status
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• Budget Outlook
- Revenues
- Water Revenues
- YTD indicates about $350,000 above budget
- Revenue comparable to last year
- Wastewater
- YTD indicates about $300,000 above budget
- Revenue will be up about 6% comp. to 2011
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2012 Pre - Budget Financial Status
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• Budget Outlook
- Expenditures
- Line -item cuts /reduction in services
- Merit allowance for an average of 3%
- Budget impact of 1.5%
- Maintain Capital and Infrastructure Investment
- General Fund-
- Projected to be about $360,000 under budget
- 1% of budgeted expenditures
- Expect Similar performance from other funds
- Exception may be Solid Waste
2012 Pre - Budget Financial Status
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• Fund balances, selected funds
- Fund 12/31/2011 12/31/2012 12/31/2012
- Actual Budget Projected
- General $ 2,574,000
- Adjustments 433,000
- Total $ 3,007,000 $ 3,417,000 $ 3,167,000
- Sanitation $ 614,000 $ 543,000 $ 700,000
- Solid Waste $ 2,824,000 $ 2,814,000 $ 3,167,000
- Golf $ 1,000 $ 75,000 $ 60,000
- Water / WW $ 9,988,454 $ 3,488,846 $ 8,000,000
- Health Ins. $ 1,915,707 $ 1,500,000 $ 1,520,000
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cm," 2012 Pre - Budget Financial Status
2013 Preliminary Challenges
SFAM
• Economic Conditions
—Sales Tax
• Turnaround in progress
— Property tax delinquency's
— Building Permit Activity
• Business Machinery and Equipment Exemption
—State Legislature Exempted new Business Machinery
and Equipment from personal property tax
• About a five year implementation —takes effect as old
equipment depreciates or is replaced
• Fuel costs are still very volatile
2012 Pre - Budget Financial Status
2013 Preliminary Challenges
• Expenses
— Personnel
• General Fund $24,000,000
— Modest 3% growth requires $720,000
— Sales tax 3% growth provides only $360,000
— Nothing to address changes in other costs
— Infrastructure
• Streets
— $2,000,000 per year in "extended maintenance"
— New and significantly rebuilt streets through debt issiance
• Water and Wastewater
— Significant Cash projects underway
— Also a significant amount of debt contemplated
— Rate structure and plan in place to support projects now contemplated
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