By Leilani Haywood
The City of Lee’s Summit revenue is forecasted to be at $70.8 million for the general fund for fiscal year 2019 with property taxes and sales tax as the primary drivers. Jack Feldman, a management analyst with the City’s Finance Department, presented a picture of the city’s financial health at the Budget and Finance Committee meeting on March 5th. Mayor Pro Tem Rob Binney, chairperson, councilmembers Phyllis Edson, Craig Faith were present and Dave Mosby was absent.
In a presentation on the city’s financial dashboard, Feldman said the city has $46 million year to date with expenses of $40,668,210. His next presentation was a picture of the city’s fiscal year 2019. “This part of the FY19 budget planning process where staff reviews revenue trends and what we expect to happen to the next fiscal year as far as revenue,” said Feldman.
Feldman explained that the city analyzes population growth, data trends, changes in price or schedule of fees, changes in legislation, micro/management trends and new development that will yield licenses or permit revenue when forecasting revenue for the next fiscal year.
“We have $1.5 million over our projected level,” Feldman told committee members. “However, I want to temper this by saying this isn’t new revenue.” Property taxes are 3.5% over the projected level as well at $731,566 for fiscal year 2018. The projection is based actual property tax assessments from 2017, the Hancock Amendment levy calculations and the three-year replacement tax which has been volatile.
Feldman was quick to point out the “Payment in Lieu of Taxes” or PILOT payments line item. “When you see the $493,700 payment keep in mind that 80 percent of this will also be in the finance budget as an expense as well.”
For sales tax, Feldman says, “we’re anticipating a 2.5 percent increase over projected levels. What drives growth in sales taxes is population growth. We’ve had additional development of multi-family development driving more population.” Gross sales taxes are projected at $16 million with a projected increase of $420,636. However, “EATS” or economic activity taxes account for approximately $697,658 for fiscal year 2019. These taxes are part of the tax increment financing activity within the city.
Although sales taxes have increased, franchise taxes are decreasing. “We’ve seen a decrease of $508,000 or 3.8 percent over projected levels,” Feldman said. The decrease in franchise tax was affected by a 10% decrease in telephone franchise tax from the projected fiscal year 2018 the projected fiscal year 2018.