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Finance Dept. - Finance Division

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1. What is the size of the entire 2012 City Budget?

General Fund $24,348,374
Special Revenue Funds $40,491,909
Debt Service $20,345,757
Enterprise $28,067,130

TOTAL $113,253,170

2. What is the sales tax rate paid by citizens?

State of Kansas sales tax = 6.3%
Both Riley County/Pottawatomie retail sales tax = 1.0%
(NOTE: For January, February, and March, the Riley County sales tax will decrease to .50% decreasing the total sales tax rate to 8.05% and 8.55% in the Downtown Redevelopment area. Sales tax rates will increase back to the original percentage on April 1, 2013.)
City of Manhattan sales tax = 1.0%
Quality of life sales tax = .25%
Total sales tax rate = 8.55%

Limey Pointe Transportation Development District sales tax = .50%
Quality of life sales tax = .25%
Total sales tax rate for Limey Pointe shoppers = 9.05%

Downtown Redevelopment Transportation Development District sales tax = .50%
Quality of life sales tax = .25%
Total sales tax for Downtown Redevelopment shoppers = 9.05%

You can click the link below for a map of the sales tax districts. Sales Tax District Map

3. What is the outstanding estimated total debt of the City as of the end of 2012?

$257,383,181

4. What is the City mill rate and the combined mill rate of the City, Riley County, and USD 383 for 2012?

City Mill Rate – 42.156 mills
USD 383 Mill Rate - 51.637 mills
Riley County Mill Rate - 34.782 mills
State of Kansas Mill Rate - 1.500 mills

Total Mill Rate - 130.075 mills

5. Where do my property taxes go?

Each dollar of property taxes paid is split between several local entities. To see the details of this split, view the document below. 2012 Property Taxes Levied

6. Where do the sales taxes collected go?

Each dollar of sales taxes paid is split between several local entities. To see the details of this split, view the document below. 2012 Sales Tax Allocation

7. What is a special assessment?

A special assessment is a fee for public improvement projects such as streets, sewers and waterlines that is levied against properties that will benefit from an improvement project. The fee consists of principal and interest and is usually paid over 20 years. The interest rate paid by the property owner coincides with the interest rate and the maturity date for the bonds which are sold to finance the project. Special Assessment Process Explanation

8. Why are special assessments good for Manhattan and it's citizens?

In many states and cities, subdivision improvements are not financed by special assessments. Instead a developer or property owner is required to obtain private financing at conventional interest rates. The cost of the improvement and financing is added to the price of the lots and homes sold by the developer. Because the City of Manhattan issues special assessment general obligation bonds to finance subdivision infrastructure improvements, which are exempt from Federal and State income taxes, developers and homeowners are able to secure lower interest rates on the specials they do pay. Additional advantages are that public financing of infrastructure improvements reduces the cost of housing in our community, helps promote growth in the local tax base and also helps to stimulate the local economy. All these benefits are achieved with no monetary loss to the property owner because a special assessment project generally increases the value of the property by an amount at least equal to the special assessment fees levied on the property.

9. How can a property owner learn more about special assessments?

You may contact Rina Neal, Operations Officer in the Finance Department by phone at (785) 587-2417 or direct an e-mail to neal@cityofmhk.com.

10. How are special assessments paid by the property owner once they are authorized?

The property owner has several options for payment. If the special assessment fee is from a newly completed project, the property owner can pay off the special assessment in full and not incur any interest charges. They may also pay off a portion of their assessments with a minimum payment amount of 10% per type of special assessment. This early payoff is made after the last step of the special assessment process that authorizes the levy of the special assessment. Generally, this period to pay in full is open for approximately 30 days. Each property owner of record will be notified of the early payoff option. They are also entitled to take a discount for early payoff because bond issuance costs and discount fees can be avoided when paid in full. If the property owner does not choose to pay the fee when the project is complete, they can pay the principal (plus interest) in installments of up to 20 years. The property owner is billed annually through the County Treasurer who adds the amortized fee to the property tax bill each year until paid in full. The interest rate paid is equal to the rate of interest on the tax exempt bonds which are sold by the City to finance the project on a long term basis.

11. Can a property owner pay off special assessments after the 30 day early pay off period has expired?

Yes, the City has a prepayment program available. Once a project is bonded for long term financing the principal and interest payments are locked in for the bonding term so direct payoff of principal with interest cannot be made against the bond itself. However, under the prepayment program, the City can make the payments on the bonds on behalf of the individual property owner. To take advantage of this program the property owner contacts the Finance Department of the City and requests information on the prepayment program. The Accounting Division will prepare an information packet that includes a computation of the present value amount for principal and interest on the property owner's outstanding special assessments. This computation includes the savings that will be realized for early payoff based on an estimated payoff date. If the property owner decides to proceed, they contract with the City and agree to pay the present value amount specified. This prepayment will be placed into a Special Assessment Escrow Fund that earns interest and the City will make the yearly bond payments for the property owner. For additional information on this program and current interest rates contact the Finance Department at (785) 587-2465.

12. Why would a property owner want to pay off their specials early?

There are several benefits to the property owner: 1. The property owner can make the property free and clear of all special assessments liens. This may help to make the property more marketable and may permit the owner to take out a second loan on a property. 2. If property owners cannot invest at a rate higher than the rate being charged on their specials, they could pay off this obligation and be money ahead. This is comparable to paying off high interest debt.

13. In terms of dollars, how large is the special assessment program?

A complete breakdown on special assessment debt and any other financial information for the City is available in the Annual Operating Budget and in the financial section of the Comprehensive Annual Financial Report (CAFR).