PITTSBURG — City Manager Daron Hall and Finance Director Jamie Clarkson presented the City's five-year financial forecast at Tuesday’s Pittsburg City Commission meeting, highlighting various aspects of the city’s fiscal planning through 2023.

Prior to Tuesday’s presentation, on May 18, city commissioners and staff reviewed the financial forecast document, Clarkson noted. Following the presentation by Clarkson and Hall, the city commission voted to approve the plan, and Pittsburg Public Information Manager Sarah Runyon sent out a media release Wednesday summarizing it.

“A recap of the five-year plan shows a steady increase in sales tax revenues, a healthy balance in reserves, declining debt service, and an increase in assessed valuations,” the release notes.

The financial forecast also incorporates aspects of the Imagine Pittsburg 2030 community visioning plan, a long-term community planning effort that dates back to 2010.

“I think a lot of the community is unaware of the vision 2030 process,” Hall said Tuesday. “But when I was hired back in 2012, I was handed a document by [Pittsburg Area Chamber of Commerce President] Blake [Benson] and others [who] said ‘Hey, implement this if you want the job.’ And so we talked a lot about how that would go and the city took up the lead on that.”

Since then, the plan has been revised somewhat, Hall said. While housing, economic development, public wellness and infrastructure remain priorities for Pittsburg, education and marketing have been added to the list, though the city government has little to do with implementing some aspects of the revised 2030 plan.

“I think it’s important to understand that as you add things like education, it quickly is apparent that the city has a very small role in education,” Hall said. “We are going to be completely in support when it comes to that, which drives the point that this is a community plan.”

Pittsburg’s school district for public education at the elementary through high school levels, Unified School District 250, has its own board of education, while Pittsburg State University is part of Kansas’s six-school university system and is overseen by the Kansas Board of Regents.

Beyond the Imagine Pittsburg 2030 plan, the financial forecast reviewed Tuesday by Hall and Clarkson included information on the city’s net assessed valuation, which is projected to continue to slowly increase in coming years, but increased more dramatically over the past few years, from less than $120 million in 2016 to more than $130 million today.

“In 2018 a major shift happened and the city grew to almost $128 million,” Clarkson said. “That was when the Kansas Crossing Casino and Hampton Inn hotel came into town, and that grew our assessed valuation by about 8.5 percent in one year.”

Clarkson noted, as Runyon also did in her media release Wednesday, that no property tax increase is recommended for 2020. There is also no recommendation to increase sales taxes or utility rates in 2020, although a one percent annual utility rate increase is recommended for the years 2021 through 2023.

According to the Five-Year Financial Plan document, half of the city’s revenues in 2018 came in roughly equal amounts from two sources: utility revenues and sales taxes, each accounting for about 25 percent of total revenues. The next largest contributor was property taxes at 21 percent of total revenues, adding up to more than $7 million, followed by several smaller categories, none of which individually topped 10 percent of revenues. Total city revenues for 2018 amounted to $35,108,096.

The overall sales tax rate in Pittsburg is 9 percent, although as Hall pointed out, most of that goes to the State of Kansas, which has a 6.5 percent sales tax rate. Crawford County additionally collects 1 percent sales tax, leaving 1.5 percent that goes to the City of Pittsburg.

The city’s 1.5 percent sales tax breaks down to 0.5 percent for street maintenance, 0.5 percent for public safety, and 0.5 percent split three ways between economic development, with a quarter of a percent, and capital outlay and funding for Memorial Auditorium, with an eighth of a percent each.

In reviewing the major sources of revenue for the city’s general fund, Clarkson pointed out that “Pittsburg has gone from being a property tax funded operation in the general fund to more of a sales tax [funded operation] over the last several years.”

Hall noted that only 2 percent of city expenditures in 2018 went to economic development, saying that “as we go out and talk to people, you hear a lot of people that are concerned with how much money we spend with all the economic development that’s going on in the community,” Hall said.

“We get a lot of bang out of our buck thanks to Blake Benson, Pitt State University, the private businesses in this town. They invest. They’re the reason we’ve spent half a billion dollars in six years on this community. It’s not because of the city because quite frankly, the city doesn’t have that kind of money. But we have spent two percent and we will spend two percent again this year.”

There were a few areas of the financial forecast that Hall seemed to go through relatively quickly considering the projects referenced in the document and the amounts of money involved.

“In the City’s 2018 Five Year Capital Improvements Plan, staff identified approximately $64 million of needs for years 2019 through 2023 and beyond; $36 million of this total is unfunded,” the five-year financial plan document notes.

“You know there’s not a ton to say here, capital improvements, I think the things that jump out — what is a capital improvement? A capital improvement is a permanent fixed asset, you know, a street, a road, a bridge, a building, so I think most of us understand that,” Hall said.

Hall noted that the city has a five-year capital improvements plan which the city commission approves every year, but only one year of it is actually budgeted.

“Everything after that is a place for us to put every project that we know about, regardless of what road it is, regardless of what building,” Hall said, adding that the plan gives the city an idea of what projects would cost, and “it’s good for the community to see what’s out there. It doesn’t mean we’re going to do everything that’s in that plan, but it means that we’ve got a pretty good idea, within the city of Pittsburg, what the need is, and that there’s a priority of what’s going to get done when, so the expectation is there. I’m not going to go through the projects.”

Among the projects listed in the document that were funded with approximately $8 million in the 2018 budget year was $1.5 million spent to begin construction on Silverback Way, a new street to connect East Centennial Drive to the planned Silverback Landing housing development, which some members of the public who live near the planned road and development have raised concerns about at previous city commission meetings.

Though Clarkson did discuss the city’s outstanding debt, including principal and interest, which stood at $36,177,139 at the start of 2019, the five year financial forecast document also included a section titled “Potential Future Municipal Electricity Utility,” which neither Clarkson or Hall discussed in detail in presenting the plan.

“City staff, along with City Commissioners, and area stakeholders have studied the feasibility of creating a City-owned electric utility for several years. In the fall of 2018, the City contracted with municipal electricity consultants to review the City’s current power infrastructure to see if it is financially feasible for the City to acquire, stand up and operate a municipally owned electric utility. The preliminary results were very favorable for the City,” the document notes.

“As a result, in the spring of 2019, the City assembled a team of experts and the City Commission approved both a legal services agreement and a consulting services agreement to further the effort to municipalize. To pay the costs of this effort, the City Commission set aside $600,000 from reserves in 2019 and $400,000 from reserves in 2020 to accomplish this goal. These costs will split evenly between the General Fund, Utility Fund and Revolving Loan Sales Tax Fund and paid back in the future.”