Proposed One-Cent Sales TaxInformation and Education

Presentation

City of Ulysses

This presentation is created to educate the people of Ulysses about the upcoming one- cent sales tax election on July 12th, 2011

This information is provided to help citizens make an informed decision about the use of the one-cent sales tax

City of Ulysses

Ballot Language for July 12th, 2011 Election

The proposition on the ballot shall be:Shall the following be adopted?

Shall the City of Ulysses, Kansas levy a 1% additional retailers sales tax to be effective October 1, 2011, through September 30, 2021, with said proceeds to be used for the general operation of the City which may include street maintenance, park maintenance, administration, public safety and to offset property tax increases?

Poor Economy Impacting Ulysses

Severe and sustained decline in natural gas revenues

Little or no growth in sales tax

Minimal growth in property tax

Fund balance has declined dramatically

Ulysses General Fund Spending (In Millions)

$2.77

$2.98

$2.77

$3.25

$2.62

2007 2008 2009 2010 2011

Mill

ions

Gas Revenues No Longer a Source of Supplemental Revenue

Since 2000, the General Municipal Funds were supported by $2,150,000 of Natural Gas funds, or about $180,000/year. That is the equivalent of 5.8 mills per year if raised through the property tax.

Since 2009, optimism that natural gas would again produce these types of surpluses has caused us to spend from reserves, rather than seek a tax increase. Now those reserves are at the level where a tax increase or significant service cuts must be considered.

Gas Revenues No Longer a Source of Supplemental Revenue (Chart)

Natural Gas Revenues

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

03 04 05 06 07 08 09 10 11

Year

Trend: Decline in General Fund Reserves

Spending reserves is not uncommon, especially during difficult economic times. One reason cities require an adequate reserve is to allow them to get through tough times and emergencies.

Fortunately, we have not had an emergency but we have seen our share of tough economic times. It continues today. The $1.5 million of reserves used from 2009 through 2011 is a result of poor economic conditions.

Ulysses General Fund Year-End Fund Balance

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

03 04 05 06 07 08 09 10 11

Year

Tax Dollars

Year End Cash

Ulysses Response to Declining Revenue

Budget Containment Options:

Reduction/Elimination of Capital Projects and Equipment Purchases – No vehicles/equipment purchased in 2009 & 2011Reduction in Operating Budgets – 5% in 2009 & 10% in 2011Workforce Reduction – 5% reduction during 2011Hiring FreezeSalary FreezeFurloughsLayoffsProgram Eliminations

Ulysses Holds Line on Property Taxes

No Increase in property tax in 2010 & 201190% of the General Fund revenues comes from the property tax and sales taxThe property tax is paid by property owners in Ulysses, not all residentsThe sales tax is paid by anyone who purchases goods or services in Ulysses

Ulysses Proposes Sales Tax Increase

On July 12th, Ulysses voters will consider approving a one-cent increase in the Ulysses sales tax. This is a City of Ulysses initiative, not county-wide.

The new revenue raised will support the general fund programs, including administration, code enforcement, streets, street lighting, police, parks, golf and reserves.

The sales tax is for general purposes and will sunset in 10 years.

What Does a “Yes”

vote mean?

Voting yes means there will be a new source of money to allow the City to continue to adequately provide core services to our residents, while maintaining adequate reserve funds.

Core services include maintaining curbs and valleys, resurfacingstreets, replacing streets and some sidewalks.

It will allow us to avoid further budget reductions which would impact our ability to deliver services.

What Does a “No”

vote mean?

Continued budget shortfallsNeed for property tax increaseContinue to suspend the timely replacement of our vehicles and equipmentPotential budget cuts to administration, police, streets and parks

What is the current Ulysses sales tax and what will a one-cent sales tax cost me?

The current sales tax in Ulysses is 7.3%6.3% goes to the State1% goes to the City of Ulysses

Approval of the one-cent sales tax increase will make the sales tax rate 8.3%Anyone who shops in Ulysses will pay 8.3 cents for each $1 spentMaintains a competitive rate in our region of the State

How much more

will I spend?

$20 pizza = 20 cents $100 groceries = $1

$500 sofa = $5

Who pays for the one-cent Sales Tax?

As a homeowner you are responsible for the property tax

Both residents and non-residents or visitors will share the cost by paying

sales tax

I am a homeowner in Ulysses

Let’s go to Ulysses and buy

something

People from Johnson, Liberal, Hugoton, Lakin, Moscow and

anywhere else

Sales Tax Rate Comparison with Ulysses One-Cent Proposal

0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%9.00%

Lakin

Trib

une

Cimarr

onHug

oton

Pratt

Greens

burg

Kinsley

Syracu

seUlys

ses

Garden

City

Libera

lLa

rned

Scott C

ityDod

ge

Summary

Ulysses sales tax rate will remain competitiveThe sales tax will generate new revenue to support general operations of the City, including infrastructure, equipment and reservesThis will help prevent further increases in the property taxNon-residents and visitors contribute to the tax

Further Information

This presentation was prepared to provide information about the proposed one-cent sales tax vote which will be held on July 12, 2011

For further information please contact City Hall at 356.4600, or email the City at cityadmn@pld.com; or go to www.cityofulysses.org and follow the sales tax link

Thank You