If the City of Manhattan cuts the budget for the first time in a decade you will be able to thank Commissioner Ed Klimek. It the City of Manhattan continues to double the budget every seven years you will be able to thank Commissioner Ed Klimek. Klimek is the man in the middle and it doesn't look good.

Tuesday night the Commission worked on the 2002 Budget. Commissioners Mark Taussig and Brad Everett took the leadership in gaining control of spending. Commissioner Roger Reitz and Mayor Bruce Snead played the old tax and spend song. But it was Klimek that was the disappointment. For the past three years Klimek has been to sole common sense voice.

It could be that Klimek only appeared to have a common sense voice because the other four were so far out in left field. Now with Taussig and Everett, Klimek looks to be in short left field.

Taussig and Everett agreed on lowering the 2002 budget by 2 1/2 mills from the 2001 budget. When you are spending $59 million that is not hard to do. And at times Klimek had some very good ideas to cut costs. One item, which make good sense, is to not purchase new cars and trucks next year and save $400,000. That is a great idea. But, when it came down to the final discussion on cutting the budget Klimek wants to keep the mill rate at the 2001 level.

That would mean the City of Manhattan's 2002 Budget would be 8% higher than this year. City Administration had given the Commission the word that the estimated City Valuation would be $220 million,

If every there were a time to contact you City Commissioners it is now. One more vote is needed and that is Ed Klimek's.

BACKGROUND

On June 26, 2001, City Administration presented the 2002 proposed budget to the City Commission.  The proposed budget provided for an estimated 4 mill property tax levy increase needed to fund services provided by the City and other agencies.  At that meeting, it appeared that the City Commission indicated a desire to examine ways to further reduce expenses.

DISCUSSION

Proposed Budget Cuts and Reduction in Services:

Since the June 26 meeting, City Administration and Department representatives have worked diligently to identify further cuts in the proposed budget   Department heads were given the charge to revisit their proposed budgets and identify areas for cuts.  The proposed budget cuts and adjustments equate to slightly over $500,000, equivalent to approximately 2.3 mills based on an estimated valuation of $220 million.

Attached is a summary of the budget cuts which have been identified.  Areas for cuts include commodities, travel, continuing education and training, personnel services, delay or elimination of several capital improvement items, reduction in sidewalk funds, elimination of the adult craft programs, and reduction of seasonal code services primarily related to enforcement of the mowing ordinance.

As a result of the proposed cuts, the proposed property tax mill levy increase has been reduced to approximately 1.7 mills, or approximately $374,000.  This mill levy increase is necessary as explained further in this memorandum, due to expansion of the community, maintaining existing City services, and funding demands of outside agencies.

New Services Due to Growth

In deliberating over the 2002 budget, City Administration suggests that the City Commission take into account the addition of expenditures due to new services necessitated by the growing community.  This is particularly the case regarding two items included in the 2002 budget, the new Eureka Valley Fire Station and the Northeast Community Park.

As the Commission is aware, the construction of the Eureka Valley Fire Station was authorized in 2000.  The station is being brought into service to provide coverage for the Manhattan Regional Airport, the Corporate Technology Park, and future growth in the Eureka Valley.  This has required the addition of twelve personnel.  In order to prepare for the opening of the station and ensure that personnel are trained and ready to staff the station’s three shifts in 2002, fire personnel have been added to the City’s budget in stages at a total cost of $425,830.  The full cost of these personnel for a full calendar year will be felt in 2002, an increase of approximately $225,000 over 2001 personnel costs.  Below is a listing of all of the new 2002 costs associated with opening the new fire station.

Personnel- 2002 impact of 12 personnel (4 per shift, 3 shifts)

                              $225,000

Estimated increase in utilities

                               $12,040

Increased fuel/lube costs including additional vehicle  $4,500

Increased maintenance of additional vehicles             $1,000

Janitorial Supplies            $1,200

Maintenance Supplies            $200

Office Supplies/Computer Supplies                               $740

Kitchen Supplies            $1,800

Training Materials/equipment                                         $4,775

Aircraft Rescue and Fire Fighting (ARFF) Training            $5,640

Total:                      $256,895

The City purchased the land for the Northeast Community Park several years ago.  Since that time, the City has utilized an incremental approach for the development of the park.  Currently, phase one construction is underway with approximately $287,000 under contract to perform site grading, utilities, roads, and parking.  The neighborhood and other community organizations are developing the southern portion of the park with Parks and Recreation Department staff scheduled to seed the newly graded areas later this year.  The proposed 2002 budget includes $178,910 in additional costs associated with this new addition to the City’s park system.

Equipment:

2/4 ton pick up-       $26,950

12' mower-                 $29,050

ATV Transport-             $6,100

Water Reel-               $7,500

                                 $69,600

ADA restroom/park maintenance building                         $80,000

Personnel                  $29,310

Total:                       $178,910

Together, the additional expenses related to the new fire station and the Northeast Community Park equate to $435,805 or approximately 2 mills.  City Administration recommends funding for these new services from growth in new taxes.  To fund these new services from current budget bases will not sustain these and current functions in the long term.

Revenue:

One of the major challenges with this year’s budget is stagnant or declining revenues.  This, of course, greatly affects the City’s ability to maintain existing levels of service without increasing taxes.  Loss in state aid and declining sales tax revenues largely account for a 1% overall reduction in General Fund Revenues from 2001 to 2002.  This equates to a revenue decrease of approximately $200,000.

Budget Publication:

Kansas Statute requires that cities publish their proposed budget within 10 days of consideration of the budget at a legislative session to provide notice to the public that the budget is being considered.  In this case, the proposed budget must be published by July 14.  Once published, the final amount provided for in each fund may decrease but cannot increase.  Given this deadline, City Administration recommends that the City move forward with publishing the 2002 proposed budget as presented for the July 10 meeting unless the City Commission directs otherwise.  Again, these figures may change for final adoption of the budget, but may only be decreased, not increased.