April 2, 2011 Millage Election Information Kenner residents are being asked to consider the following: • 8 mills-Police Department Operations • 10 year 8-mill tax for salaries and benefits of the police department personnel • 4 mills-Police Department Buildings & Equipment • 10 year 4 mill tax • 1.14 mills-Sewerage • 10 year 1.14 mill tax renewal • 2.40mills-Garbage Collection and Disposal • 10 year tax renewal and increase from the current rate of 1.61 mills to the previously authorized maximum rate of 2.40 mills • 11.40 mills-Fire Department Operations • 10 year tax renewal and increase to 11.40 mills from the previously authorized maximum rate of 11.02 mills and the current adjusted rate of 7.40 mills • 2 mills-Fire Department Buildings and Equipment • 10 year 2 mill tax All revenues provided by these millages will stay in the City of Kenner to maintain police, fire, garbage collection and disposal and sewerage services
Kenner has relied too heavily on sales tax & gaming revenue Property Tax PROPERTY TAX IS A MORE STABLE & RELIABLE FUNDING SOURCE
Why is Kenner asking its residents for consideration? • Kenner’s heavy reliance upon sales tax is not sufficient as a result of the economic recession, competition with surrounding business and retailers outside of Kenner, and the rising popularity of online shopping • If forced to eliminate more positions, it will be impossible to provide the same level of services to the residents • In continuing to use capital funding to remedy the deficit of the operating budget, Kenner will continue to struggle to maintain status quo operations, and remain incapable of progress
What We’ve Done to Cut Costs • Among the steps taken to reduce more than 5.1 million in expenditures are: • Eliminated 81 positions • Imposed a pay freeze • City employees and police officers have received no raises in two (2) years • Transferred 2.5 million dollars of dedicated capital funds to operations to remedy budget deficit • Drastically reduced all departmental budget line items to a “bare bones” budget • Eliminated 16 take-home vehicles • Reduced janitorial services for all City buildings
What We’ve Done to Cut Costs • Among the steps taken to reduce more than 5.1 million in expenditures are: • Reduced employee benefits • (i.e. long & short term disability plans) • Eliminated costly and inefficient city contracts • (i.e.-secured a new telecommunications contract with purchased equipment; cancelled costly leasing contract) • Transitioned Rivertown museums to “by appointment only” usage • Eliminated tourist center • Eliminated the Help Line • Reduced advertising expenses • Reduced payments to the Rivertown Theater Guild • Reduced overtime citywide • Especially the Fire Department, which resulted in closing the rescue squad on certain days
Comparing millage rates for lA/MS municipalities • Comparing Kenner’s millages to the millages of other cities is an inaccurate basis of comparison • Many municipalities are responsible for providing services to their residents that others are not • Often the Parish government handles many services for municipalities, leaving the municipality requiring less millages to operate
Making an accurate comparisonKenner, LA vs. Lake Charles, LA • Making an accurate comparison of Kenner to another municipality requires an in-depth case study • We chose Lake Charles, LA as our comparison city as references have been made to Lake Charles, LA’s capability to operate on 15.35 mills with a population of 71,757.
The gaming industriesKenner, LA vs. Lake Charles, LA Treasure Chest Casino, Kenner, LA L’auberge Du Lac Resort Casino Lake Charles, LA
The gaming industriesKenner, LA vs. Lake Charles, LA • Revenue projections for the 2010-2011 Fiscal Year • Lake Charles Casinos-$8.8 million • Treasure Chest Casino-$4.6 million, 48% less • The City of Lake Charles receives gaming revenue from the following entities: L’auberge Du Lac, Grand Palais, Isle of Capri, and Delta Downs • The City of Lake Charles has just received confirmation that it will be the home to another $400,000,000.00 Casino • 78% of Calcasieu Parish’s gaming revenue is allotted to City & Parish as follows: • Reserve for small cities-$1,000,000.00 • Remaining funds evenly divided-50% to Calcasieu Parish and 50% to Lake Charles • Not only does the City of Lake Charles receive its own share of gaming revenue, but the portion of revenue allotted to Calcasieu Parish funds many citizen services, including services for residents of the City of Lake Charles
Sales Tax & funding factsKenner, LA vs. Lake Charles, LA • Sales Tax- • The City of Lake Charles sales tax revenues for Fiscal Year 2010-2011-$41,248,000. • The City of Kenner sales tax revenues for Fiscal Year 2010-2011-$28,712,000.00 • Sales Tax revenues are $12,536,000.00 or 44% higher in the City of Lake Charles • The fund balance for the City of Lake Charles has been depleted over the past three (3) years from $32,110,080 to 16,708,178, a staggering decrease of $15,401,902 or 48%. • Funds for capital projects has been decreased from approximately $16 million to $10 million
Facts regarding the financial state of lake Charles • The following are comments from Mayor Randy Roach in his budgetary address for Fiscal Year 2010-2011: • “As you know we will end our current fiscal year (FY 2009-2010) with approximately a $4 million operating deficit for the first time in many years. The proposed budget projects an additional deficit for the next budget year of approximately $5 million….That means we have to base our operational plans on the assumption that revenues will not increase to a point where we would be able to completely eliminate an operating deficit for at least the next two budget years.” • “In summary, the City of Lake Charles is fortunate to have adequate fund balance reserves to help cover current and projected year’s deficits. However, the City cannot rely on the General Fund reserves to sustain operations into future years.”
What do Kenner Residents pay vs. other Jefferson parish residents • Kenner Resident- • Millages to Jefferson Parish-64.46 • Millages to the City of Kenner-18.13 • Total Millages Paid= 82.59 • Metairie Resident • Millages to Jefferson Parish-102.70 • Total Millages Paid= 102.70 • Gretna Resident* • Millages to Jefferson Parish-62.55 • Millages to the City of Gretna-43.98 • Total Millages Paid= 106.53 * Unlike Kenner, the City of Gretna does not enjoy a municipal homestead exemption.
10 year analysisKenner’s Revenues vs. expenses • *Budgeted figures • Kenner’s revenues have been flat, while costs continue to rise; Kenner is continuously cutting to keep expenditures in line with revenues • Over the course of ten (10) years, there has been revenue growth of 2.5%, while consumer price index has increased 26%.
WHAT would THIS INCREASE cost kenner’s RESIDENTS? • Households with a home assessed at a value of $75,000.00 or less will remain tax exempt • Household with a home assessed at a value of $150,000.00 • Increase of $141.00 per year or $11.75 per month • Household with a home assessed at a value of $250,000.00 • Increase of $329.00 per year or $27.41 per month
What the sewerage renewal means to you • Renewal of an existing property tax • Provides funding for our overall sewerage system • REMINDER: The City of Kenner is still under a Consolidated Compliance Order and Notice of Potential Penalty Enforcement • Presents a threat of significant civil fines • Possible fines of $50,000 per day of continued violation or noncompliance
What the sewerage renewal means to you • The City of Kenner counts on this 1.14 mill tax to generate $540,000.00 per year which covers the cost of the following: • Operation of the system • Maintenance of the system • LDEQ Loan payments • Municipal bond payments • 20% yearly coverage ratio (required by the bond issuers) • Although the new user rate increase has been enacted, we still depend on the $540,000.00 this 1.14 mills will generate. The user rate is calculated to include this necessary funding.
What the garbage collection and disposal MILLAGE renewal means to you • Presently, garbage collection and disposal is paid via the following: • In 2002, voters approved 2.40 mills for garbage collection and disposal. The City of Kenner is currently collecting 1.61 mills. • Existing Service Charge • Residents-$10.33 • Commercial-$16.87 • Senior Discount-$7.28 • This combination of the current 1.61 millages and the service charge does not provide enough revenue to fully fund the entire garbage collection and disposal operation
What the garbage collection and disposal millage renewal means to you • Kenner residents enjoy one of the lowest (if not the lowest) garbage collection rates in the greater New Orleans region. • Our current rate is $10.21 per residential and small commercial unit • The cost of disposal at the sanitary land fill is borne by the City • Approval of the previously authorized rate of 2.4 mills will allow the City to completely fund its garbage collection and disposal expense; also this approval will allow a small cushion to provide for any future fuel rate adjustments (which are projected to climb)
Why do your police need your help? Current KPD Funding Formula= The greater of $400,000.00 or one percent (1%) of the Treasure Chest Casino’s gross revenue + Twenty-four percent (24%) of the Treasure Chest Casino’s gross revenues to the City of Kenner + All revenues collected within the City of Kenner related to one-quarter cent of sales tax by the Law Enforcement District of Jefferson Parish + Amounts rebated by Jefferson Parish for Kenner payments into the 911 system + Fifty percent (50%) of court fines assessed by the City of Kenner + Twenty-four percent of the undedicated revenues collected by the City of Kenner + Police retirement costs in excess of nine percent (9%)
Why are the police requesting your consideration? • No part of KPD’s funding formula contains a millage • In 2004, the funding formula for KPD was amended; KPD’s funding formula no longer includes revenues from the BellSouth franchise agreement, airport sales tax, nor the 50% of 1/3 of sales tax. • This change resulted in a total deduction of approximately $1.8 million dollars from KPD’s budget • The KPD funding formula has no stable, constant or reliable funding source as all elements have the capability to fluctuate • As a result of the Country’s economic decline, the rising popularity of online sales, and competition with surrounding retailers outside of Kenner, the sales tax revenue has plummeted significantly, leaving a large deficit in the Kenner Police Department’s budget • The City of Kenner has amended its budget moving capital outlay monies to correct KPD’s deficit, leaving limited or no funds for repairs or improvements to Kenner’s infrastructure
Kenner police department vs. lake Charles police department • The City of Kenner’s Police Budget includes the operation of its own jail facility; Lake Charles uses Calcasieu Parish’s jail facility. • Cost to run KPD’s jail facility= $838,000.00 • The City of Kenner’s Police Budget includes the operation of its own 911 call center; Lake Charles uses Calcasieu Parish’s 911 call center. • Average cost to run KPD’s 911 call center= $788,248.00 • While the police departments of both the City of Kenner and the City of Lake Charles possess similar budgets, Lake Charles has a much larger capital budget which can be utilized by the police department if needed • Kenner’s Capital Budget = $0.9 million • $150,000-hotel motel tax for Laketown • $750,000-council district funds • Lake Charles Capital Budget = $10 million
Kpd cost to outfit recruit Vehicle Crown Vic $30,500 Tahoe $33,500 Body Armor $928.00 Uniforms $820.00 Shirt Badge $ 62.00 Name Plate $13.00 Serving Since Pin $13.00 Collar Insignia $20.00 M & P Point 40 Pistol $479.00 Ammunition $25.00 Taser w/ Cartridges $845.00 Inner Gun Belt $40.00 Duty Gun Belt $60.00 ID Wallet $24.00 Holster $86.00 Magazine Pouch $21.00 ASP w/Holder $145.00 Police Radio w/accessories $5,500.00 OC Spray w/ Holder $29.00 Raincoat & Boots $40.00 Gym Clothes & Cap $60.00 Dress Hat $25.00 Hat Badge $53.00 Mock Turtleneck $25.00 Summer T-Shirt $15.00 Traffic Vest $12.00 AED $12.95 Psychological Test $300.00 Medical Physical $411.00 Drug Screen $95.00 Hepatitis Vaccine $200.00 Training Academy $700.00 Applicant Test $22.00 TOTAL: $42,863.00
Kpd recurrent cost to continuously outfit its officers 1. Recommended Replacement Every 5 Years: Vehicle: $30,500.00 Crown Vic $33,500.00 Tahoe 2.Mandatory replacement Every 5 Years: Body Armor: $928.00 3. Mandatory Replacement Annually: Ammunition-Duty $25.00 Ammunition-In Service $50.00 Uniforms $820.00 Taser Training Cartridges $38.00 Mock Turtleneck $25.00 Summer T-Shirt $15.00 AED Pads $64.00 Drug Screen $95.00 TOTAL $1,132.00 4. Replacement as needed: OC Spray $14.00 Raincoat & Boots $40.00 Gym Clothes & Cap $60.00 Dress Hat $25.00 Traffic Vest $12.00 Inner Gun Belt $40.00 Duty Gun Belt $60.00 TOTAL $251.00
What would this cost kenner’s residents if kpd’s funding shortfalls remain unresolved? • Major budget shortfalls have or will create the following negative impacts on our Kenner Police Department and Kenner’s citizens: • The safety of Kenner will decrease as monies are not available to allow for more officers to work, and layoffs will be iminent • Quality trained officers will leave KPD to seek employment with departments with proper funding, equipment, and opportunities for growth and better compensation
What would this cost kenner’s residents if kpd’s funding shortfalls remain unresolved? • Major budget shortfalls have created the following negative impacts on our Kenner Police Department: • Equipment utilized by the police department will continue to become aged, damaged and in need of replacement and repair as monies are unavailable to address these problems • Aging fleet will become increasingly unreliable and costly to repair • Police vehicles depreciate at a more rapid rate than standard citizen vehicles. • Hiring freezes for non-essential employees will remain in effect, thereby hindering the growth and potential of KPD • The overall safety and quality of life for the citizens of Kenner is jeopardized
Millage Historical Data • Millage was originally passed in 1983 @ 10.25 mils • It generated 1.9 million dollars in 1983 • The fire department budget was 1.9 million dollars at that time
Why do your firefighters need your help? • The City of Kenner’s Fire Department currently possesses a PIAL rating of Class 2 • This Class 2 rating was granted contingent on KFD making the necessary improvements and upgrades • There is no funding to make the required improvements and upgrades to remain a Class 2 or to meet the goal of becoming a Class 1 fire department • If KFD loses its Class 2 rating, the property insurance cost of Kenner’s citizens will increase; conversely, if KFD meets its goal of a Class 1 rating, Kenner’s citizens will see a decrease in property insurance cost • St. Tammany Parish Residents are battling this issue as their fire class rating was not entered correctly by some insurance companies and dropped from a rating of three (3) to four (4) • This has caused major increases in their homeowner’s insurance premiums • Most importantly, a Class 1 fire department will provide better service and safety to the residents of Kenner
Why do your firefighters need your help? • Rating deficiency exists as current employee schedule does not provide the most efficient use of manpower • All facilities and equipment cannot be manned at all times • NFPA recommends a fire truck be manned by 4 men at all times • Currently, Kenner staffs a fire truck with 3 men • Most local fire departments use a 56 hour per work week schedule • Kenner does not possess the funding for this • Kenner’s apparatus fleet is the oldest in the Greater New Orleans area, creating unreliability and high repair costs • Most apparatus fleet is out of warranty; • Some manufacturers are out of business, which creates high costs for repairs
How Our Fire department can improve its class rating • Placing a dedicated aerial device in service • Upgrading apparatus fleet • Appropriate staffing • Change work schedule to 56 hour work week to better utilize employees • Man fire trucks with 4 men as recommended by NFPA
How Our Fire department can improve its class rating • Replace Stations 35 (1801 Williams) & 38 (400 Veterans) • Proper allocation of equipment • Replacement of five (5) pumpers • Replace essential fire fighting equipment • Air packs and bottles • Turnout gear • Non-fire fighting vehicles • Station equipment • Acquire aerial ladder truck • Purchase 100’ aerial device
Net cost of fire millage increase If Class 1 rating is achieved, the following is the net cost for a home valued at $150,000.00 Millage increase= $45.00 per year - Insurance Savings= $33.00 per year ______________________________________________ Net Cost of Millage Increase $12.00 per year
Advantages • More efficient services for the public • More experience in positions • Shift some of the public’s expenses to pay for services instead of insurance • Property Tax is a deduction on Federal Income Taxes and insurance is not • Employee retention • Less maintenance cost for equipment