ST. ROBERT, Mo. (Nov. 26, 2008) — Times will be tough next year for St. Robert, Finance Committee Chairwoman Theresa Cook acknowledged at a Thursday joint meeting of her committee and the city’s emergency services committee, but they’re not impossible.
“We’re looking at this like it’s terrible. It’s not terrible,” Cook said. “We will still be able to pay our bills, we will be able to pay our employees, we will be able to function as a city. And if things change, (City Administrator) Norman (Herren) and (Finance Director) Edna (Givens) are really good at telling us that.”
However, Givens acknowledged that balancing the 2009 budget will be difficult compared to previous years in which St. Robert could expect a substantial increase each year in sales tax revenues.
“It’s totally different this year than it is in other years with a zero growth budget,” Givens said.
Herren presented a total budget of $15.5 million based on funding requests from city departments, out of which he expected cuts of up to $600,000 could be required.
Things could easily be much worse, Herren said.
“I do not expect revenue to increase in the city of St. Robert for 2009, but neither do I expect it to decrease,” Herren said. “Most of the cities in southwest Missouri are going to decrease, but because of the stability of Fort Leonard Wood and the funding there, I think we are going to stabilize.”
Preliminary estimates showed that after fixed costs and must-do construction projects were taken into account, there’s no way to accommodate many of the department requests for funding after they were tallied up.
“When we did that, we came up with $313,000 in the red with no pay increase at all,” Herren said. “The next step is what do we consider for a pay raise. We ran numbers of what it would cost for a 3 percent step increase, and what it would cost for a step increase plus the state’s 3.9 percent cost of living increase.”
There’s no way to postpone some major projects, Herren said, including two sewer pump stations that are at risk of failure. One is located near Taco Bell and the other is at the city’s trash transfer station; both are in serious need of repair, and Herren said installing a larger new $570,000 pump station would solve both problems as well as accommodate future development.
“We are trying to come up with enough money that we can give something to the employees on a pay raise. We’re coming close but we are not there yet,” Herren said. “I just ask you to give me some time and be patient with me as I work with the staff.”
While most revenue line items aren’t expected to change much, there are some exceptions.
“With the decrease in construction, planning and zoning fees have gone down so we’ve had to do some adjustments,” Herren said. “One thing I did not address in this is the proposed increase in the electrical charges, but I don’t see that as a positive or a negative. It is a pass-through.”
City officials are considering other ways to raise revenue, Herren said.
“We don’t have impact fees; other cities have impact fees. Do we want to look at impact fees to help us build these half-million dollar sewer stations?” Herren asked. “We have some major costs when the Woodland Hills project fires up.”
Woodland Hills is a major residential subdivision planned for St. Robert that’s already been approved by the city.
Alderman Todd Williams agreed that there are major infrastructure needs that have to be replaced; Herren said the only separate revenue source for infrastructure at present is a half-cent sales tax that goes directly into street work.
“Have we looked at some of the things that we’ve got financed that we may be able to refinance at a lower rate?” asked Alderman Allan Johannsen.
Herren said that option has been explored.
“Our consultant has told us that with the current situation, refinancing of government bonds is not real lucrative,” Herren said.
While refinancing is possible, Herren said he’s been advised that legal and other costs in the refinancing project would likely consume most of the savings with current interest rates.
“So 2009 will be a no-frills year?” asked Alderman Ralph Cook.
Theresa Cook said that isn’t necessarily the case, and it may be possible to make trades between departments. As an example, she said a four-wheel drive vehicle may be needed by some departments in some seasons but could be used by other departments in other seasons.