Kansas City Council Business Session – February 1, 2024
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Kansas City Council Business Session – February 1, 2024
On Thursday, February 1, 2024, at 2:00 PM in the 26th Floor Council Chamber, the Kansas City Council held a Business Session covering budget updates, trash cart implementation, and a community-led tax abatement program. The meeting began with approval of the January 25, 2024 minutes.
Consent Calendar
- Approval of Minutes: The minutes from the Business Session of January 25, 2024 were approved unanimously.
Discussion Items
2nd Quarter Budget Analysis Report
- Presentation: Budget Officer Krista Morrison and Senior Analyst Tanner Owens presented the Fiscal Year 2024 second quarter budget analysis, covering revenues, expenditures, and fund balance projections.
- General Fund: Revenues are projected at $707 million (a $57.9 million surplus over budget); expenditures are projected at $663.8 million (a $14.9 million overage). The general fund balance is projected to decline from $272.8 million to $265.5 million by fiscal year-end (April 30, 2024).
- Revenue Highlights: Earnings tax surplus of $21.1 million, local use tax surplus of $14 million, property tax surplus of $6.4 million, interest/rental income surplus of $7.9 million. Growth is slowing in some categories.
- Expenditure Highlights: Fire Department projected deficit of $9.8 million, attributed to overtime, work-out-of-class, and a 3% vacancy rate versus the budgeted 7%. Public Works deficit of $9.3 million, primarily $8.5 million for the trash cart program.
- Long-term Outlook: By FY2027, the countercycle reserve (3 months of operating expenses) may be breached; by FY2028 the emergency floor (2 months) may be breached, emphasizing the need to preserve fund balance.
- Special Revenue Funds: Surpluses in sales tax ($10.9M), interest ($7.7M), property tax ($6.5M), restaurant tax ($6.3M). Convention & Tourism Fund requires a $3 million supplement due to event support, emergency repairs, and World Cup costs. Parking fund no longer needs General Fund transfer.
- Convention Hotel Catering Fund: Debt service of $6.8 million offset by $3.1 million revenue from hotel catering; General Fund supplement of approximately $4.8 million anticipated, consistent with prior years.
- Cleanup Ordinance: Ordinance 240093 (second quarter cleanup) was discussed and transmitted to council for consideration.
Trash Cart Implementation Report
- Presentation: Director Shaw presented the plan to provide 64-gallon trash carts (with gray lids) to all residential households, complementing the existing recycling cart program. The ordinance requests $8.5 million from the unappropriated General Fund balance to purchase carts outright.
- Service Details: Carts would be collected semi-automatically (tippers on existing trucks) with an eventual transition to fully automated collection. Residents on disability/front-door service remain unchanged. Implementation begins May 2024, phased by collection day (Friday to Monday), taking about 5 months.
- Tonnage Impact: Currently about 0.5 tons/household/year (pre-COVID); post-COVID volume up 35%. Carts are expected to add another 20% but remain below national average of 1 ton/household/year.
- Landfill Discussion: Regional landfills used by Kansas City have 13 years of capacity; without waste reduction, closures accelerate. Director Shaw recommended: (1) enact host fees on transfer stations (ordinance introduced for August 2024 ballot), (2) issue an RFI for a P3 waste minimization facility (targeting $60/ton processing cost), and (3) continue investing in diversion programs like composting.
- Recycling Contamination: Contamination rose from 15% to 30% after recycling cart rollout; trash carts expected to reduce contamination by providing a designated container for trash.
- Council Questions: Addressed opt-out policy, cart sizes (64 preferred, 35 possible but less efficient), cart maintenance (10-year life, city-managed replacement), multifamily inequity, and the need to address displacement prevention policy.
Westside Chapter 353 Program Report
- Presentation: Chris Franzé (Stinson Law), Bobby Hernandez (former councilmember), and Gloria from Westside Housing presented the annual report on the Westside Owner-Occupant Residential Property Chapter 353 development plan, approved September 2022.
- Program Details: Eligible households (income ≤136% of median annual income, $81,657) pay 2.65% of income as property tax; higher brackets receive partial reductions. The program runs through 2047.
- Enrollment: 283 of 584 eligible households (54%) enrolled in first 15 months. Of those, 95 earn under $27,000/year; 158 are of Mexican heritage. Three families were saved from losing homes due to back taxes.
- Impact: Bobby Hernandez described the program as a critical tool to combat gentrification and displacement in the historic Westside Mexican-American community. Councilmembers praised the collaborative community effort and noted the program as a model for other neighborhoods.
- Next Steps: Enrollment continues until June 2026; goal is 80% participation. An LCRA tax abatement program for the Westside will be discussed in committee next week.
Discussion of Ordinances, Resolutions, and Communications
- Office of Language Access Ordinance: Mayor Pro Tem announced introduction of an ordinance to establish an Office of Language Access, following a resolution passed in the prior term directing the city manager to create a plan.
Key Outcomes
- The council approved the minutes from January 25, 2024.
- The second quarter budget analysis and accompanying cleanup ordinance (240093) were received and will be considered on the council docket.
- The trash cart implementation report and the $8.5 million cart purchase were discussed; the ordinance is before council for approval.
- The Westside Chapter 353 program report was received with strong council support; the program continues through 2026.
- An ordinance to establish an Office of Language Access was introduced and will go to committee.
- No closed session was held during the business portion of the meeting.
Meeting Transcript
Welcome to business session. Our first item is approval of minutes for business session of January 25th. 2024 is there a motion. It's been moved and seconded all in favor of approving the minutes from January 25th. Say aye. Aye. All opposed. The motion passes. Our first item is the second quarter budget analysis report. Whoever wants to come. Krista. Budget analysis report, second quarter. No, it has been short. We can bring this down. All my problems get solved. Well, good afternoon, Honorable Mayor Lucas, members of City Council and City Manager Platt, Krista Morrison, budget officer. And I am joined today by Tanner Owens. Tanner is a senior analyst in the budget office. And among his many hats, he manages the quarterly analysis process for the office. So appreciate the opportunity to be here today. We will be presenting the October 31st monthly financial report as well as the fiscal year 20 for second quarter budget analysis. So jumping right in, um, the first two pages are actually from the month ending report, uh, pages two and three. And this is general revenue, general fund revenues, and it is prepared by the accounts division, and it is a view October 31st, so second quarter end of each year for five years worth of history. And just a couple items I'll highlight here because you'll hear much more detail ahead as we project out in quarterly a forward look. But in general, our major revenue categories for the city in the general funds, such as property tax, local use tax, earnings tax are strong. They are coming in above the budget. Um while growth is starting to slow in some categories, there's still growth. Um moving to the general fund expenditures year to date as of October 31st. I think most notable on here, you'll see a comparison October 31st from fiscal year 23 last year to the current year. You'll see that personnel services are up from the same time last year. That is in general just due to wage pension, health care costs planned in the budget. In the area of contractual services, um, we are trending above last year, and most of those expenditures were planned in the budget, such as the tree planting program, T Mobile Center improvements, and uh recycling and trash program, bulky item program expansions. So with that, I will jump in to your second quarter analysis. So we are required by um code to present to city council in first, second, and third quarter where we anticipate uh we're going to close the fiscal year. Um I want to acknowledge that this is a citywide process. It is collaborative with each and every department, so every department director, their financial staff provides input on um issues they're running into in their department and also where they anticipate we're going to end the fiscal year. The information is being provided to you to help um provide really policy decisions so you know where we're on trend, where we might be ahead in revenue, where we may be behind, and then also some of our operational issues we may be um running into for the city. Why this is so important? I think um a couple years ago, several of you were on this council when COVID first hit, and we had to make very quick mid-year reductions and changes to continue services across the city. Um, each quarter. Uh there will be a cleanup ordinance, a second quarter cleanup ordinance accompanies this and is being considered on the council docket today. That ordinance numbers 240093, and we'll go through the highlights of what that cleanup ordinance does. So, general assumptions in the quarterly budget analysis. Um, we have included all expenditures through through second quarter. Any of our uh collective bargaining agreement terms are included in that quarterly analysis. Um it does assume that the contingent appropriation is fully spent. As of the time we ran this report, contingent appropriation was at 2.2 million. There is recent legislation that as of today, the contingent appropriation is at 1.2 million to close the fiscal year. That's the available balance left from where we started a fiscal year at around 6.3 million. All right, with that, I'm gonna turn this over to Tanner Owens to talk specifics on our analysis and where we're anticipating to close the fiscal year.
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