Since February 2006, the City Council and staff have conducted eight work sessions to review and establish an operating budget that focuses on delivering quality City services and programs according to the priorities outlined by Council.

In April, the City conducted a citizen survey to gather feedback from residents regarding quality and priority of services. Based on the responses submitted, the Council held a strategic goal setting work session and established the following priorities:

1. Maintain (upgrade) quality public safety services
2. South Park School planning/development
3. Maintain (upgrade) sidewalks, streets, and curbs
4. Single Family Residential/Neighborhood Revitalization Districts
5. Unification of City Residents and Identity as Merriam
6. More emphasis on Senior Programs (recreation and housing)
7. Maintain (upgrade) parks and trails
8. Code Enforcement
9. Beautification of Merriam
10. Improved Communications

The proposed budget documents were presented in a public hearing on July 24th. The City Council voted to approve the final budget on August 21st, and the approved budget was then be submitted to the County Clerk.

Since the fall of 2005, the Governing Body and staff have anticipated many challenges in creating the 2007 budget. The most significant factors affecting the City's financial outlook include:

• Lack of growth in overall sales tax revenues from existing sources.
• Increases in the cost of providing basic City services, including:
  • Increased cost of fuel and related commodities; and
  • Increased cost of salaries and benefits for City staff in order to maintain quality services and remain competitive in the job market.
• Legislative actions at the state level that erode the City's property and sales tax base, including:
  • (HB2640) Elimination of sales tax on motor vehicle rebates.
  • (HB2619) Eventual elimination of property taxes on commercial machinery and equipment

The 2007 budget incorporates a total increase in property tax revenues of $285,000 over the 2006 budget. This representes a 1.8 mill increase. The increase is made up of two elements:

• Increase in assessed valuation due to reappraisal growth and new construction; and
• A $201,000 increase in property tax revenues, or approximately 1.8 mills.

The average market value for a home in Merriam is $150,000. The property tax increase resulting from a 1.8 mill increase in the mill levy equates to $31.05 per year for the average Merriam home.

Property Tax Calculation Example:
Average Value of Merriam Home: $150,000
Annual Tax Liability for City Services: $331.91
Current (2005) Mill Rate: 19.241

Assessed Valuation: 11.5%
150,000 X 11.5% = $17,250

$17,250 X 19.241 = 331,907.25
331,907.25÷ 1,000 = $331.91

Cost of one mill: $331.91 ÷ 19.241 = $17.25 per year

The City's increased revenue needs for the 2007 budget may be largely attributed to increases in the following expenditure items over the City's 2006 budget:

• Increased gasoline and diesel fuel costs;
• Legislative changes in calculation of sales tax on vehicle rebates;
• Increased Police and Fire Department overtime; and
• The addition of one full-time police officer.

For the 2006 budget year, Merriam has the second lowest mill rate in Johnson County when the Consolidated Fire District #2 mill rate is included:

The following is an overview of general fund revenue sources, followed by a detailed projection for the City's 2007 budget:

• Property Tax includes estimated reappraisal growth only. Effects of new legislation begin in 2008.
• City Sales tax is comprised of 95% of the actual 2005 collections, plus $300k for additional store openings in late 2007, minus $65k estimated loss of sales tax on vehicle rebates.

The greatest ongoing budget challenge is lack of overall growth in sales tax revenue from existing sources (auto dealers, Merriam Town Center, and other established businesses).

While there are a number of redevelopment projects currently underway in Merriam, the two largest commercial redevelopment projects are Merriam Village (under construction east of I-35 and south of Johnson Drive) and Merriam Pointe (under construction west of I-35 and south of 67th Street).

Once tenants are announced for these developments, sales per square foot can be more accurately estimated and when the buildings begin to be constructed there will be a better idea of sales tax revenue timing.

The following is an update on the status of these projects (as of July, '06):

• Merriam Village:
  • DDR (the developing agent) is leasing based on October 2007 store opening dates. Their primary focus for now will be establishing primary mid-box tenants. Leasing for restaurants and smaller out-lot retail will occur later.
  • There will be 3 months of sales tax revenue in 2007 if opening occurs as anticipated.
• Merriam Pointe:
  • This summer, Southern Star will be relocating a major gas pipeline that currently runs through the project area.
  • Road construction is currently underway.
  • No revenue is anticipated for 2007 except for a Hyundai dealership that will be erected on the south end of the project area.
  • The developer is marketing the site and seeking leases.

The following is an overview of general fund expenditures for the City's 2007 budget:

*Note: by law, the City's projected expenditures must balance against projected revenue.

Residents can expect the same high level of service that they have come to expect from the City of Merriam.

The City's 2007 operating budget was established with a focus on delivering quality City services and programs according to the priorities outlined by council.

Personnel Changes: The Governing Body has established their number one priority be to, "Maintain (upgrade) quality public safety services." The 2007 budget includes the addition of one new police officer and the reclassification of two positions in the Community Development Department from contractual workers to employees.

Major Equipment Purchases: The 2007 Equipment Reserve Fund budget includes the replacement of five police patrol vehicles for a total of $104,000. It is also anticipated that a sixth patrol vehicle will be purchased with drug forfeiture funds. The budget includes $34k for replacement of the breathing air compressor for the Fire Department (if needed), as well as $17,150 for a bay vehicle exhaust system and $60,000 for the replacement of the Community Center chiller (if necessary). Also included are funds to upgrade and replace computer equipment and software as scheduled.

General Health & Welfare: The budget includes continued funding for the Home Improvement Loan Partnership Program with Mission Bank, the Downtown Investment and Architectural Assistance Program, Johnson County Human Resources Energy Assistance Program, United Community Services (USC), the Johnson County HOME Program, and the Volunteer Center. These programs are all being funded at the same levels as last year.

The 2007 budget includes the additional of one new police officer to be hired in November of 2007. It also includes the reclassification of two positions in the Community Development Department from contractual workers to employees.

The total salary increase for the General Fund is 6.93% and includes the personnel changes mentioned above. The salary increase also includes additional overtime in the Police and Fire Departments. The 2007 budget reflects merit increases of 3% - 5%, with an average merit increase of approximately 4.2%.

The total increase in employee benefits is 11.9%. A portion of the increase is a result of the additional salary items listed above. The 2007 budget also anticipates an increase in employee health insurance rates, which will be limited to 10% based on council direction.

Transfers to the Capital Improvement Fund is reduced by $159k from the level set by policy. Council has directed that the Merriam Enhancement Program and the Sidewalk Program included in the CIP 5 Year Plan be postponed for 2006 and 2007.

The projects outlined in CIP 5 Year Plan are anticipated to remain in the budget, however the timing of some projects has been extended to match when funds become available.

Residents with additional comments or concerns are always encouraged to visit with their council representative. Contact for Merriam's Governing Body members can be found online by clicking here.

Merriam's municipal budget is coordinated through the City's Finance Department. For more information about the City's operating or capital improvement budget, contact Maureen Rogers, Finance Director at (913) 322-5509, or Quinn Bennion, City Administrator at (913) 322-5501.