While Crestwood aldermen soon will decide how to proceed with debt payments, the city’s administration is digging for further cuts to future expenses.
City Administrator Jim Eckrich told aldermen last week that department heads have been instructed to revise their five-year plans.
“As I spelled out in the (2009) budget, the city cannot operate in 2010 the way we have in 2009,” he said. “The city has to make modifications to reduce our expenditures.”
He said department heads are working to revise capital-improvements expenses as well as future budgets for the city’s park and stormwater fund. Eckrich is striving to cut expenses in the city’s general fund.
“As discussed at the (Jan. 13) meeting, we started with the park and stormwater fund,” he said. “The board indicated their desire to perform a similar analysis on the capital-improvements and the general fund.
“I’m working on that and hope to have something to the board by the second meeting in February regarding what can be done in the capital-improvements and the general fund to ensure the long-term financial stability of the city.”
Eckrich added that while city officials are developing revenue-enhancing ideas to fortify the park and stormwater fund, which is slated to be depleted of cash reserves by the end of this year, the capital-improvements fund and general fund will both see cuts.
When asked by Ward 4 Alderman Steve Nieder if aldermen would be prudent to redo the 2009 budget, Eckrich replied he believes the city can operate in 2009. The concern, he believes, is 2010 and beyond.
“The 2009 budget works for the city,” Eckrich said. “It gets us through 2009 … The sooner the city takes action to reduce expenditures, the better our cash position is going to be again in 2009. And I respect that position. That’s why we’re moving. The department heads’ deadline to get us that information is next Friday (Feb. 6). I have to take it. I’ll review it and make my modifications and give it to the board hopefully some time in February. I feel like redoing the budget is counterproductive. I feel like making these changes, which are going to be large changes, is something the board can work with on a moving-forward basis. And if they want to implement those prior to 2010, it only helps our cash position.”
Aldermen in recent weeks already have cut $237,900 from the city’s $13.7 million budget for 2009 due to an expected $181,000 loss in sales-tax revenue this year from the scheduled April 1 closing of the Crestwood Court Macy’s.
The 2009 budget was balanced with the use of more than $600,000 in cash reserves from the capital-improvements fund and park and stormwater fund. City officials estimated on Jan. 1 that Crestwood had roughly $3.4 million in cash reserves among its three major funds.
Faced with the prospect of spending all cash reserves in Crestwood’s park and stormwater fund by the end of 2009, aldermen must decide whether to cut expenses, redirect expenses or refinance Aquatic Center debt slated to be retired in 2012.
Eckrich has advised aldermen that this year’s budgeted use of more than $468,000 in park-and-stormwater cash reserves “will essentially deplete the reserves within that fund.”
The city administrator has identified the following options for aldermen to consider:
Reduce expenditures in the park and stormwater fund by $565,000. Eckrich said this could be accomplished by closing the Whitecliff Community Center or closing some or all of the city’s parks.
Reduce expenditures in the general fund to move park and stormwater costs into the general fund.
Pay part of the city’s Aquatic Center debt in 2010 and 2011 out of the general and capital-improvements funds. The city owes $1.1 million per year until 2012.
Refinance the Aquatic Center debt to pay $350,000 per year until 2019.
And with an Internal Revenue Service provision still intact on the city’s 2006 tax-exempt $2.87 million financing agreement with Royal Banks of Missouri, Eckrich now believes that the city will be forced to make an unscheduled debt payment of $895,000 in penalties by April 10.
