POPULAR ANNUAL FINANCIAL REPORT (PAFR)

For the fiscal year ending June 30, 2023 

Annual Comprehensive Financial Report

LEE'S SUMMIT - QUICK FACTS

Lee's Summit, Missouri, with a current population of 106,031, has been one of the fastest-growing communities in Missouri over the past decades. It’s located in eastern Jackson County extending south into Cass County and is a suburban community in the Greater Kansas City metropolitan area. The City encompasses a geographic area of 65.87 square miles served by I-470, US 50, M-291 and M-150 highways with convenient access to the metropolitan area commerce, employment, services and recreational opportunities.

Founded in 1865, Lee’s Summit is one of the largest cities in Missouri. The City’s exceptional services and amenities have helped receive regional and national recognition. Lee’s Summit has been named a “Community for All Ages” and a “Walk and Bicycle Friendly Community.” The City has also received the “SolSmart Gold” designation for advancing solar energy growth. Lee’s Summit holds four national-level accreditations for its Fire, Parks & Recreation, Police and Public Works services.

ECONOMY SNAPSHOT

*Workforce, or employee counts, is defined as a ratio of full-time equivalents (FTE) where one full-time employee is estimated to work 2,080 hours annually or 2,912 hours for certain Fire Department personnel.

FINANCIAL SNAPSHOT

• The City of Lee's Summit earned the highest rating possible on general obligation bonds (Aaa) from Moody's Investors Services. This reflects a strong fiscal position and manageable debt levels.

• The City of Lee’s Summit has received the Government Finance Officers Association (GFOA) award for Outstanding Achievement in Popular Financial Reporting for the Popular Annual Financial Report (PAFR) for three consecutive years.

• The City of Lee’s Summit has received the GFOA Certificate of Achievement for Excellence in Financial Reporting for 45 consecutive years.

The City uses funds to maintain its financial records. A fund is a grouping of related accounts and the City divides these funds into two categories: governmental funds and proprietary funds. The following charts focus on the City’s governmental funds, which finance most governmental functions of the City. The major governmental funds include the General Fund, Debt Service Fund, Capital Improvement Sales Tax Fund, Blue Parkway and Colbern Road CID Fund, Public Safety Series 2022B Fund and ARP Act Fund.

The General Fund is the City's primary operating fund, which accounts for all financial resources of the general government. The City’s unassigned fund balance for the General Fund decreased to $44,538,976 in fiscal year 2023.

The Debt Service Fund accounts for the payment of principal, interest and fiscal charges on long-term obligations. The Capital Improvement Sales Tax Fund was established to account for road projects related to the renewal of a 1/2 cent sales tax by voters in 2007. The Blue Parkway and Colbern Road CID Fund was established to account for costs associated with infrastructure construction in the Blue Parkway and Colbern Road Community Improvement District (CID). The Public Safety Series 2022B Fund was established to account for public safety improvements including construction and equipping costs for Fire Stations No. 4 and No. 5. ARP Act Fund was established to account for federal grant revenues allocated through the American Rescue Plan Recovery Act and the corresponding uses of those grant funds. The other governmental funds are considered nonmajor.

Statement of Revenues, Expenditures and Changes in Fund Balance (Governmental Funds)

The City's sales tax rate is 8.35%, divided between the state of Missouri, Missouri State Conservation, Missouri State Parks and Soils, Jackson County, Jackson County - Community Children's Services, Kansas City Zoo and the City of Lee's Summit. The City of Lee's Summit receives 2.75%. Of the 2.75% sales tax, 1% is for the General Fund, 0.50% is for Capital Projects, 0.50% is for Transportation, 0.25% is for Local Parks, and 0.50% is for Public Safety.

On February 1, 2023, the City of Lee’s Summit began collecting an additional half-cent Public Safety Sales Tax, which was approved by voters in April 2022. The Public Safety Sales Tax will provide support for law enforcement, fire protection, emergency responses and other public safety services.

The City also has a use tax, which is applied instead of a local sales tax on goods purchased from certain online and out-of-state sellers for delivery and use in Lee’s Summit. The use tax rate is the same as the sales tax rate of 2.75%.

The Statement of Net Position is the balance sheet of the City and is an important measure of the City's overall financial health. It provides details on all assets, including capital assets, along with all liabilities including long-term liabilities such as bonds. The difference between all the City’s assets and liabilities is the net position. The City's net position increased to $1.15 billion in fiscal year 2023 from $1.07 billion in fiscal year 2022. The largest portion of the City's net position reflects its investment in capital assets, which are used to provide services to citizens and are not available for future spending.

Revenue and Expense Breakdown (Governmental Funds)

Governmental funds account for the basic services provided by the City, such as public safety, public works, street maintenance, parks and recreation, community development and capital expenditures. This financial information is useful in evaluating the near-term financing needs of the City.

Revenues by Source

Sales and use taxes comprised the City's largest governmental revenue source (40%) for the fiscal year ending June 30, 2023. The second largest governmental revenue source was property taxes (29%) followed by Franchise Tax and Motor Vehicle Tax. Other revenue items comprised the rest of the City's revenue.

MAJOR INITIATIVES

Downtown Market Plaza

The Downtown Market Plaza, a mixed-use project in downtown Lee's Summit, broke ground in October 2023. This project, centered around a new farmer's market, event space, performance area and pedestrian plaza, aims to further enhance the vibrant downtown district and serve as a long-lasting community asset. In April 2013, Lee’s Summit voters approved $600,000 as part of a general obligation bond for the creation of a downtown performance and festival space which was the impetus behind this transformational project. The Downtown Market Plaza project will expand the downtown Lee’s Summit footprint and is intended to offer year-round programming opportunities, attracting visitors from throughout the region.

Downtown Market Plaza

$186 Million No Tax Increase Bond

In April 2023, Lee's Summit residents approved a $186 million No Tax Increase bond question, the largest amount approved in Lee's Summit history. This investment will address three crucial areas: emergency preparedness ($74 million), transportation ($98 million) and revitalizing city facilities ($14 million). With this funding, Lee's Summit is prioritizing its community's safety, convenience and overall well-being for years to come.

No Tax Increase Bond

Investing in Infrastructure

The City began several major road improvement projects this year. At $30 million, the Colbern Road Safety Improvement Project is the largest capital improvement project in the history of Lee's Summit. It is one of 20 projects in Missouri to receive funding from the Governor's Transportation Cost-share Program based in part on its economic impact and public benefit. The project began in September 2023 with an estimated completion date of May 2025. The project will widen Colbern Road to four lanes with turn lanes, sidewalk, shared-use path, curb and gutter, street lighting, and bridge replacement that includes bicycle and pedestrian accommodations over the Union Pacific Railroad. 

The Chipman Road Improvements Project began in July 2023. This project will reconstruct a section of Northwest Chipman Road as a two- and three-land roadway with sidewalks, shared use path, streetlighting, a traffic signal, a new pedestrian bridge and the relocation of 4,700 feet of water main and 1,400 feet of sanitary sewer.   

COMMENTS OR SUGGESTIONS

Thank you for taking the time to learn about the City of Lee's Summit’s financial position. Comments or suggestions on how the PAFR can be improved can be submitted by contacting Finance at FinanceDept@cityofLS.net or 816.969.1100.