Crestwood residents will have an opportunity next week to comment on the proposed 2011 city budget.
The Board of Aldermen will conduct a public hearing on the proposed budget when it meets at 7 p.m. Tuesday, Nov. 23, at the Crestwood Government Center, 1 Detjen Drive.
The first reading of the budget will take place that evening. The second reading and adoption of the budget is scheduled for the Tuesday, Dec. 14, regular board meeting.
As proposed to aldermen at a work session last week, the 2011 budget anticipates $11,601,007 in revenues, $11,873,771 in expenditures and the use of reserves to cover the resulting $272,764 projected deficit.
City Administrator Jim Eckrich projects a $1.9 million balance in the general fund on Jan. 1 and a $1,485,503 balance on Dec. 31, 2011.
The 2011 general-fund budget anticipates revenues of $8,175,476 and expenditures of $8,090,491. It includes a $500,000 transfer to the park and stormwater fund to help make roughly $1.06 million in principal and interest payments on certificates of participation for the city’s aquatic center. No employee pay increases are budgeted for 2011, though the budget does include a 15-percent increase in health care costs.
A balance of $300,000 is projected for the capital-improvement fund on Jan. 1 and a $400,342 balance is estimated for Dec. 31, 2011. The 2011 capital-improvement fund budget projects revenues of $1,618,486 and $1,226,144 in expenditures next year.
A $300,000 transfer from the capital-improvement fund to the park and stormwater fund is budgeted, which like the general fund transfer will help make the scheduled 2011 aquatic center COP payments.
While the total transfers of $800,000 to the park and stormwater fund could have come solely from the general fund, Eckrich has said he did not want to further reduce the general fund’s cash balance.
Major 2011 capital-improvement expenditures include: $80,000 placed into savings for a fire truck; $128,504 for police needs, including three vehicles; $55,000 for information systems needs; $120,000 for the city-funded part of the Whitecliff Service Bridge construction; $34,400 for the city-funded part of the design of Spellman Avenue improvements; $80,000 for in-house concrete street improvements; $21,000 for building maintenance and $73,340 for public works vehicles and equipment.
While $357,000 was requested from public works staff for mill and overlay work on 13 streets in 2011, Eckrich did not recommend any money for these projects so the $300,000 transfer could be made to the park and stormwater fund for the COP payments.
Eckrich projects a Jan. 1 park and stormwater fund balance of $125,000 and a Dec. 31, 2011 balance of $174,909.
The 2011 park and stormwater fund budget projects $1,666,545 in revenues and $2,416,636 in expenditures. No major projects are budgeted in this fund in 2011.
Once the park and stormwater fund makes the 2011 aquatic center debt payment — using the combined $800,000 from the general and capital improvement funds — the city will have retired that debt because roughly $850,000 of the 2012 COP payment of about $1.06 million is being held in escrow, Eckrich has said.
With that debt gone, the park and stormwater fund will begin paying back the funds from which it has borrowed money. A repayment schedule included in the 2011 budget shows the park and stormwater fund repaying the general and capital-improvement funds $160,000 in 2013, $10,000 in 2014 and $15,000 in 2015.
The board last week discussed at length both the use of reserves to balance next year’s budget and what the city should do to address a continuing decline of sales-tax revenue and a projected depletion of its cash.
A five-year plan, which is based on a 2-percent annual cost increase and department heads’ individual five-year plans, forecasts a sharp decline in the city’s total cash across all three major funds: $2.06 million in 2011, $1.3 million in 2012, $360,801 in 2013, a negative $968,426 in 2014 and a negative $2.7 million in 2015.
“It paints a picture, for me at least, that we can’t go on this course and that we need to do something,” Eckrich told aldermen. “What I will say positive about it is we’re not at the point of 2013 yet. We have time to make corrections to ensure that doesn’t occur, whereas in the past we’ve had a line of credit without this type of analysis up front. We know where we’re headed if we don’t do something. The question is: What do we do ensure this does not occur?”
Eckrich believes the rate of decline of sales taxes eventually will level off and create a baseline.
“At some point, our Staples store, Sam’s (Club), Shop ‘n Save and Schnucks create a baseline of revenue that I don’t think varies much upon season as much as upon needs,” he told aldermen. “People need groceries; they’re going to get those … I did these projections based upon on the current status, and unless something changes, this is what will occur. If the economy improves, the sales taxes will improve, but I think that’s unknown at this point.”
Mayor Roy Robinson said he hopes the five-year plan represents the “worst-case scenario,” noting Crestwood Court, the city’s prime sales-tax generator, could be redeveloped by 2015.
But Eckrich said, “Things could get worse. The worse case would be a number of the stores I referenced leave. I think it could be worse than this. It probably, likely gets better than this … This is reasonable if economics don’t change between now and 2015. I think on the back end, the last two years of the plan, you’re really simply guessing. I think three years is probably more appropriate to look at.”
Ward 3 Alderman Paul Duchild asked why the administration proposed a budget that’s balanced with reserves, noting it did the same for the 2009 and 2010 budgets.
Eckrich replied the action is justifiable this year due to the outstanding aquatic center debt.
“I would say using $272,000 to balance a $12 million document of which $1 million is debt, I don’t think is a bad decision,” he said. “I think using $750,000 to balance a budget in 2012 where none of it is debt is a bad decision.”
Robinson said, “My opinion is that’s what the reserves are for. We didn’t put them up to have a big saving campaign. We have reserves to be able to pay our bills and make sure this city stays solvent. And hopefully that amount will keep us going until those revenues turn around.
“We can do two things. We can go out and borrow that money so that we can show it on the books as not having it, but I don’t think we want to do that because we’ll be paying a nice amount of interest to do that. But the money’s there to pay our bills, and that’s what we’ve done. We didn’t create the problem. The economy created it, and the revenues have been dropping … I think we’re perfectly justified using the reserves.”
Ward 3 Alderman Jerry Miguel said, “Let me follow up on that. Has everything been cut that can reasonably been cut?”
Robinson said, “You know the answer.”
Miguel said, “I have some thoughts on it.”
While the mayor contended the city has reached a point where additional staffing cuts will affect services provided to residents, Miguel suggested the board consider eliminating a police officer position that originally was going to be done through attrition.
Six public-safety positions — three police officers and three firefighters — are being eliminated through attrition as part of a 2009 plan to reduce annual expenditures. The fifth of those six positions will be gone at the end of this year. Eliminating the remaining police officer position could reduce the projected 2011 deficit by roughly $80,000, Miguel contended.
“The position eventually will be gone. Why do we continue to carry it?” he said, adding later, “I guess my objective would be to get that cost down by that $80,000. Eliminating the position would be one way of doing it … But bottom line, it seems to me that we’ve got to drive that deficit down, and that is something that we’ve previously identified as a cost reduction which would have been realized by this time. The expectation was that that position would have been eliminated by the first of this year. The economy the way it is, that hasn’t occurred.”
Ward 4 Alderman Deborah Beezley said to Police Chief Mike Paillou, “We already have an issue of morale in this community and our staff. What would that do additionally if we reduce another position? Can you tell me how that would impact the safety in our community and how that would impact the morale in our staff?”
Paillou replied, “We feel it’s going to be a challenge for us to make staffing levels to keep our officers safe and to get to your house at three o’clock in the morning at a reasonable time. We still think we can do that. As far as morale, I wouldn’t have thought you could take morale any lower than it is right now, but yeah, that would definitely do it.
“… We have been running the Police Department under the assumption that (the position) was going to belong to attrition, so we haven’t made any moves to try and drive anybody out of the Police Department, and I certainly have no intention of making any such action unless directed by the board … But as far as morale and safety, safety — we’ll cover our streets. Morale, it’s going to rip it apart, but it is what it is.”
Ward 2 Alderman Chris Pickel said the Board of Aldermen should address cuts as part of a plan, not individually.
“If there aren’t other proposed cuts you would make, I think it’s kind of moot to talk about this one position because that doesn’t get us anywhere,” he told Miguel.
Ward 2 Alderman Jeff Schlink said he would prefer other cost-cutting measures, such as furloughs, over eliminating positions.
“Even though it is a position that has been earmarked for attrition to be eliminated, there’s still no reason to rush anyone out the door — whether it’s this person or anybody that works here,” he said. “As long as they’re fulfilling their responsibilities to the department heads, they should be allowed to keep their position. And if the plan that is in place today counts on attrition to eliminate that position, I would be inclined to … keep that person employed as long as possible.”
Ward 1 Alderman Mimi Duncan echoed Schlink’s opinion.
“I would hate to be the one, in this era of almost 10 percent unemployment, to add to that in our city when we have other ways to do it,” she said.
Ward 4 Alderman John Foote stressed the the board needs to find ways to generate revenue.
The city has reached a point where it no longer can afford staff cuts, he said. Employees have been instrumental in securing grant money for Crestwood, Foote added.
“There’s a limit to how far your string is going to get stretched,” he said, “and I think it’s been stretched pretty far personally.”