Kansas City Council Business Session - February 9, 2024: FY25 Submitted Budget Presentation
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Kansas City Council Business Session - February 9, 2024: FY25 Submitted Budget Presentation
The Kansas City Council held a business session on February 9, 2024, primarily to receive the presentation of the Fiscal Year 2025 (FY25) submitted budget from Budget Officer Krista Morrison and Finance Director Tammy Queen. The meeting included approval of the previous session's minutes and extensive discussion on budget details, structural imbalance, fund balances, and police funding compliance.
Consent Calendar
- Approval of Minutes: The minutes from the business session of February 1, 2024, were approved by unanimous voice vote.
Discussion Items
- FY25 Submitted Budget Overview: Krista Morrison presented the $2.27 billion budget, which includes $1.5 billion in governmental activities (a 13.3% increase) and $768.7 million in business-type activities (a 4.9% increase). The general fund is estimated at $708.7 million in revenue, with a 9.3% growth projection. Key revenue sources include earnings tax (45%), utility taxes (13%), local use tax (12%), and property tax (11%). Expenditures are outpacing revenues, leading to a structural imbalance that requires a $49.9 million drawdown of the general fund balance.
- Structural Imbalance and Fund Balances: Tammy Queen highlighted the ongoing structural imbalance and the need to identify revenue opportunities, implement priority-based budgeting, and be cautious about starting new programs without ongoing funding sources. The city's fund balance target of 25% of general fund expenditures is maintained but declining. Discussion ensued about special revenue fund balances (e.g., Parks Department has up to $18 million) and whether departments should exhaust their own reserves before accessing the general fund. Mayor Lucas and Councilmembers questioned the necessity of separate fund balances when the city maintains a robust reserve. It was noted that general fund is the fund of last resort, but policies may need to be codified.
- Police Funding and 25% State Mandate: Councilmember Duncan and others questioned compliance with the state mandate requiring at least 25% of general revenues to fund KCPD. The submitted budget allocates $317.3 million to KCPD, which Morrison stated meets the requirement at approximately 25.05% of general revenues (excluding some grants and pension costs). However, Councilmember Willem raised concerns that actual revenues may be higher, potentially leaving the city below the mandate. The city will prepare a memo clarifying the calculation.
- Other Budget Highlights: Housing and Healthy Communities: $1.5 million for emergency shelter, $800,000 for Right to Counsel program, $6 million for violence prevention (year 2 of 5), $12.5 million for housing trust fund (year 2 of 4), $1.5 million for dangerous building demolition, $1 million for tree canopy, $8.1 million for trash and recycling. Public Safety: wage increases, hiring incentives, $2 million for police vehicle replacement, $500,000 for citywide cameras, $27.6 million for fire capital improvements (including new breathing apparatuses and ambulances). Infrastructure: $4 million for Vision Zero, $800,000 for street sweepers, $600,000 for ADA improvements at City Market. Finance and Governance: $375,000 for language access, $1 million for refugee/immigrant services, $210,000 for reparations committee, $5.7 million for employee retirement contribution increase.
Key Outcomes
- Budget Submission: The FY25 submitted budget was formally presented to the council. It will be discussed in finance committee over the coming weeks, with a series of public hearings: February 24 (Southeast Community Center, 9 a.m.–noon), March 2 (council chambers, hybrid, 9 a.m.–noon), and March 4 (Northland Neighborhoods, 6–8 p.m.). Adoption is scheduled for the last regular meeting in March.
- Future Steps: The city will recirculate a special revenue fund presentation from late last year to provide council with clarity on fund balances. A memo on police funding calculation will be prepared. Administrative amendments (Amendment A) and council amendments (Amendment B) will be processed through the finance committee.
- Adjournment: The session adjourned to the next meeting.
Meeting Transcript
Welcome to business session. Our first item is approval of minutes for business session of February 1, 2024. Is there a motion? So moved. Second. The moved and seconded. All in favor indicate by saying aye. Aye. All opposed. Motion passes. Krista Morrison for the most important thing in our city charter. I think the submitted budget. Go ahead. Well, good afternoon, Honorable Mayor Lucas, members of City Council and City Manager Plaid, Krista Morrison, budget officer, and I'm happy to be here today to present your fiscal year 25 submitted budget. First, I'd like to acknowledge, if I could ask the budget staff if you would stand, those of you that are here. So really thank you for that. This is a very hardworking team of business public officials or public administration professionals. And this work, it's a labor of love. It's really meaningful work around resource allocation and supporting your decisions for public policy. I'd also like to acknowledge department leadership and their financial staff. This is a citywide process. We start this in July of every year. So this is not just our office working. This is an entire citywide process managed under the leadership of City Manager Platt. I want to also take a moment to recognize Vicky Watson who recently passed. Vicky Watson is the CFO for the health department and served both the police department and the health department for over 34 years of service, I believe. So I do want to acknowledge Vicky's recent passing and her hard work for this city. And finally, I'd like to recognize the leadership of our city manager Platt, our new finance chair, Councilwoman Boo, that will be spending lots of weeks ahead and years ahead, as well as members of this city council. Budget is a reflection of the priority of its residents, and our city's needs are great. I want to thank you for your time and the hard decisions you'll have ahead on these important quality of life services that the city provides. So with that, we'll walk through the detail of Kansas City's budget. So here's where we're at in the budget process. You all, as soon as you took office, started developing the brand new adopted citywide business plan. It sets the goals and the priorities for Kansas City for the year ahead and during your term as well. That citywide business plan includes a five-year plan, and that becomes your annual budget each and every year. So that's where we're at. We're at the submitted budget step of the process. We will be going through over the next two months, basically, discussion on Kansas City submitted budget, provide opportunities for resident input, and then at the end of March, the last meeting in March, Kansas City's budget will be adopted. So the budget document itself is available online at KCMO.gov forward slash budget. The budget contains several key components. The first is the transmit a letter, followed by a city overview, the adopted citywide business plan, budget overview, and then we get into detail for each and every department and program in the city and how those programs are funded. There's also a capital and debt section of the budget, glossary, and a whole view of fund schedules about possibly every slice and diced view you might want to look at Kansas City's budget. This is our second year using a new budget system. It is very interactive, and I would encourage you to look online. If there are two sections for residents to look at, because it is a 700-page document. It is the transmit a letter and the budget overview. That really gives you the highlights and overview of Kansas City's budget. So how the budget is broken out. It's broken down in activities. Activities are it's a phrase in local government budgeting for a breakout of revenues in two classifications.
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