While city officials estimate that Crestwood lost more than $2 million in the first three months of 2008, one alderman has proposed asking residents in August for a tax-rate increase.

A first-quarter financial report for 2008 shows that through the first three months of the year under a modified-accrual accounting basis, Crestwood had a $2,047,549 combined deficit in the city’s three major funds.

At the April 22 Board of Aldermen meeting, Ward 4 Alderman John Foote conveyed that if the city can’t afford in 2009 to pay for services now offered to residents, aldermen should place a tax-rate increase on the August ballot.

In a statement issued last week as an amendment to comments he made at the board’s March 25 meeting, Foote also proposed scheduling a town-hall meeting in April to help determine if desired services still can be afforded.

A town-hall meeting is set for 7 p.m. Wednesday, April 30, at the Community Center at Whitecliff Park. Mayor Roy Robinson has said that the meeting will focus on redevelopment options for the Crestwood mall as well as city finances.

In exploring the possibility of a tax-rate increase last week, Foote pointed to a series of three town-hall meetings that took place earlier this year and cited residents’ desire to see city services continue.

“The residents in attendance (at the town-hall meetings) felt strongly Crestwood needed to continue services as in the past,” Foote said. “In April ’08, a town meeting should be held and city income looked at to make sure that Crestwood has enough income to pay bills in 2009. If not, the Board of Aldermen should pass an ordinance to place a tax increase on the ballot for the August 2008 election and submit to the county election board before the early May deadline.”

An August ballot measure would have to be filed by 5 p.m. May 27 with the county Board of Election Commissioners.

Foote said an election would provide a chance for residents to choose between two options — maintaining city services through a tax-rate increase or allowing city officials to cut those services.

“Unless we provide this opportunity for residents to vote on a tax increase in August, they will not have a voice on how Crestwood moves forward,” Foote said. “With an election, residents can choose between providing enough income to pay bills or rely on continued cuts in services and possibly more debt.”

The city’s debt through the first three months of its 2008 budget adds up to $2,047,549 across the three major funds.

Based on a modified-accrual basis through March, the city had generated $1,443,203 and spent $3,029,555 in the general fund for a loss of $1,586,352; generated $399,290 and spent $1,092,947 in the park and stormwater fund for a loss of $693,657; and generated $292,533 and spent $60,073 in the capital-improvements fund for a gain of $232,460.

Key losses in the city’s finances include drops in sales-tax revenue compared to the first three months of 2007.

Among the city’s three major funds, the city had collected $1,159,410 in sales-tax revenue from January through March this year compared to $1,326,572 in sales-tax revenue generated during the same time frame in 2007. That amounts to a loss in sales-tax revenue of 12.6 percent in the three major funds when comparing the first quarter of 2008 to the first quarter of 2007.

The general fund generated $576,927 in sales-tax revenue through March of this year compared to $630,533 in sales-tax revenue in the first three months of 2007. That 2008 dip amounts to an 8.5-percent decline in sales-tax revenue in the general fund.

The city produced $308,391 in sales-tax revenue in the park and stormwater fund through March this year compared to $371,315 in sales-tax revenue in the first three months of 2007. That loss in sales-tax revenue amounts to a 16.9-percent decline in sales-tax revenue to the park and stormwater fund.

The capital-improvements fund generated $274,092 in sales-tax revenue in the first three months of 2008 compared to $324,724 in sales-tax revenue collected during that same time frame in 2007. That amounts to a 15.6-percent decline in sales-tax revenue in the capital-improvements fund.

The city also absorbed a $525,000 prepayment this year of excess cash to the city’s remaining $2.08 million in debt on an annual-appropriation note with Royal Banks of Missouri. The prepayment will reduce residents’ property taxes in 2012 as funds to pay off the note are generated from the successful 2006 property-tax increase Proposition S.

The city’s $2.87 million annual-appropriation note approved in October 2006 with Royal Banks contains an Internal Revenue Service provision that limits the city’s general-fund balance to no more than 5 percent of the highest expenditure month during the previous calendar year.

While Ward 3 Alderman Jerry Miguel and Foote questioned why the first-quarter report was based on modified accruals rather than actual cash balances, Robinson said the reports are not meant to be “detailed” but rather provide “oversight.”

“When I hear Alderman Miguel or Alder-man Foote talk about monies and whatever, they have looked in it so deeply that our accountants probably haven’t looked any deeper to find out what’s going on,” Robinson said. “So what I’m saying is you (aldermen) know perfectly well what it is that we’re coming to. The main thing of what our responsibilities are is to make sure we stay within the boundaries of good financial disclosure and make sure we’ve done what we’re supposed to do. As far as trying to figure out presentations to give to the citizens of this community, which I’m not sure, some people like this kind of stuff.

“But, as I’ve said before, I think it’s boring. I think what we need to know is where we are overall. If there appears to be a problem, then we dig in and find out what it is that’s caused this problem and that all the funds can be accounted for. So it’s not necessarily just switching numbers backwards and forwards for the heck of it.”

Ward 1 Alderman Richard Bland concluded that based on the first-quarter financial report, he sees a trend of declining revenue and increasing expenses that could cause “budgetary problems” if city officials don’t address these issues.

“I think what I’m seeing here is a couple things,” he said. “It looks like taxes overall are down … The other thing is it looks like that although our city staff is doing their level best that expenses are slightly up … So I think what we need to be looking at is how we can bring that in line and, if we can’t do that, ways of addressing those two issues. If income and revenues that we’ve got coming in are going to continue to decline and expenses are going to continue to increase, we’re going to have some budgetary problems down the line. I think this (report) is providing us that information to be able to sit back and look at this and look at a snapshot financially of what’s going on in the city.”