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February 6, 2012 Honorable Members of Council City of Kirtland Kirtland, Ohio In accordance with the provisions of the City Charter, submitted herewith is the Mayors Recommended Annual Operating Budget for Fiscal Year 2012 and Capital Improvement Plan for the Fiscal Years 2012 - 2016. ANNUAL OPERATING BUDGET The Mayors recommended Annual Operating Budget for FY 2012 totals $7,127,825, which reflects a decrease of $147,170 or 2.02% , from last years FY 2011 appropriation of $7,274,995. Estimated Revenues Revenues in FY 2012 are estimated at $6,488,650, which represents a decrease of $565,248 or 8.01% compared to the actual FY 2011 receipts of $7,053,898. Combined with $786,769 of unencumbered FY 2011 opening balance, estimated FY 2012 General Fund resources total $7,275,419. The FY 2012 opening balance is increased $150,597 from a FY 2011 opening balance of $636,172. Municipal Tax Revenues Municipal tax revenues in FY 2012 are estimated at $4,884,100 reflecting a decrease of $7,191 or 0.15% over actual FY 2011 receipts of $4,891,291. Property Tax revenues in FY 2012 are estimated at $1,714,100, resulting in a decrease of $64,381 or 3.62% from actual FY 2011 Property Tax receipts of $1,778,481. Municipal Income Tax revenues, which provide approximately 48.85% of FY 2012 Annual Operating Budget revenues, are estimated at $3,170,000, representing an increase of $57,190 or 1.84% over actual FY 2011 receipts of $3,112,810. Special Revenues Special Revenues in FY 2012 are estimated at $600,500, reflecting a decrease of $88,879 or 12.89% from actual FY 2011 receipts of $689,379.

City of Kirtland
9301 Chillicothe Road Kirtland, Ohio 44094

City of Faith and Beauty (440) 256-3332 Fax (440) 256-9301 www.kirtlandohio.com

Kirtland City Council Members February 6, 2012 Page 2 Local Government Fund This primary source of State aid to the City is expected to decrease $212,377 or 42.27% from actual receipts of $502,377 in FY 2011 to estimated receipts of $290,000 in FY 2012. Estimated Expenditures Recommended expenditures in FY 2012 totaling $7,127,825, which reflects a decrease of $147,170 or 2.02% from last years appropriation of $7,274,995, are allocated as indicated in the following table:
Budget Increase (Decrease) Dollars 55,850 52,730 (274,750) (166,170) 19,000 $ (147,170) Budget Increase (Decrease) Percentage 1.71% 1.89% -44.47% -2.49% 3.16% -2.02%

2011 Budget Appropriation Personal Services Service & Supplies Capital Outlay Sub-Total Non-Governmental Total $ $ 3,272,560 2,783,535 617,900 6,673,995 601,000 7,274,995 $

2012 Department Request 3,448,510 3,414,115 796,900 7,659,525 620,000 8,279,525

2012 Recommended Budget 3,328,410 2,836,265 343,150 6,507,825 620,000 $ 7,127,825

Conclusion The proposed FY 2012 Annual Operating Budget is a financial plan that emphasizes Programs of Services provided to the community. This permits the City Council and residents to understand the cost of individual municipal services. The Recommended Total Government budget expenditures in FY 2012 show a decrease as compared to the FY 2011 budget appropriation. The proposed budget reflects a decrease of approximately $166,170 or 2.49%. Non-governmental expenses of $601,000 from FY 2011 are estimated to increase approximately $19,000 or 3.16% to $620,000 in FY 2012. The increase results primarily from increased debt service expenditures.

Kirtland City Council Members February 6, 2012 Page 3 2012 CAPITAL IMPROVEMENT PLAN The proposed five-year Capital Improvement Plan, as required by the City Charter, includes several capital projects for City Council consideration in FY 2012. The first year of the Plan, which is the Citys FY 2012 Capital Budget, contains $355,000 in major capital projects to be funded mostly by current revenues, including:

$160,000 for Public Works Equipment; $75,000 for street resurfacing and repair; $20,000 for storm drainage improvements; $100,000 for Community Center Improvements.

I would like to express my appreciation to the city staff and Finance Department for their assistance in preparing this proposed Operating Budget and Capital Improvement Plan. I look forward to reviewing this recommended financial plan with City Council.

Mark A. Tyler Mayor