Sunset Hills 2022 budget projects $1.5 million deficit

ARPA funds will be used on some of city‘s capital improvement projects

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By Erin Achenbach, News Editor

The proposed Sunset Hills 2022 budget projects a $1.5 million deficit. The board will give final approval to the budget Dec. 14.

The proposed general fund budget projects total revenues of $7.94 million, with anticipated expenditures of $9.45 million — a deficit of $1.5 million. 

Final approval of the city’s 2022 budget will be considered when the Board of Aldermen meets Dec. 14.

“Deficit spending is assumed in all accounts for various reasons. One, grants and donations from previous budget years are now allocated. … Additionally, we have project completion and capital purchases scheduled, things that have been put on hold due to budget cuts because of the COVID-19 pandemic,” City Administrator Brittany Gillett said during a first reading of the budget Nov. 9. “Yearend 2022 fund balance numbers are still projected to be very healthy.” 

The budget projects a yearend total of more than $10 million in reserves. 

For 2022, the capital improvement fund projects expenditures of $1.57 million with anticipated revenue of $1.31 million — a deficit of $409,501. With a beginning balance of $835,645, the capital improvement fund is projected to end next year with a balance of $426,064. 

Nearly half of the city expenditures – 47.3 percent – is set aside for salaries and benefits, while 27 percent is allocated for capital projects and equipment, and 8 percent for debt services. The remaining expenditures are used on building maintenance, professional services, supplies and similar expenses. 

The majority of the city’s revenue comes from sales tax and use tax at 48 percent, followed by utility taxes at 14 percent. 

This past April, Sunset Hills voters voted in favor of implementing a use tax in the city, which imposes a tax at the same rate as the city’s sales tax, 1.25 percent, on purchases from companies outside of the state on taxable items. The state of Missouri also passed a Wayfair bill this year, which allows the state and local jurisdictions to collect a use tax. To be eligible for use tax revenues from the Wayfair legislation, Sunset Hills had to have its own use tax legislation on the books. 

“I want to thank the residents of Sunset Hills for passing the use tax because if we did not have that in place, we would not be receiving the Wayfair Act monies that we will be receiving in 2023,” Mayor Pat Fribis said Nov. 9. “Thank you to the residents for voting and believing in us and passing the use tax.” 

Other major revenue drivers for the city include charges for services at 10 percent and licensing and permits at 8 percent. Property taxes bring in about 2 percent of the city’s revenue. 

“We’re beginning to see sales tax revenue creep back up to pre-COVID levels. Utility taxes are based heavily on weather. Telephone tax has been declining as folks turn off their landlines,” Gillett said. “Other revenue sources remain flat besides driving range income … which is outperforming all expectations. We do expect to see a slight bump in revenue because the use tax was implemented in July of this year and eventually the Wayfair bill will take place in 2023.” 

Other highlights of the 2022 budget include a full budget for the parks and recreation for the first time in two years, and fully staffed departments throughout the city. With the help of federal funding, like American Rescue Plan Act funds, the city can complete several projects that were put on hold in March 2020, said, like upgrading cyber security and outfitting aldermanic chambers with AV equipment to record and live stream meetings. 

No new positions are proposed and staff increases have been pushed to July. 

The city also has several capital projects laid out in 2022 and beyond, with help from ARPA funding. Aldermen conducted a first reading of the city’s five-year capital improvement plan alongside the first reading of the 2022 budget. 

Some of the slated capital improvement projects in 2022 include reconfiguring the entrance to city hall and the addition of AV equipment in chamber computers for $140,000. This project would be funded through ARPA. 

Other ARPA-funded capital projects in 2022 include $70,000 for stormwater intake grates and $30,000 for improvements at the Kennerly and Gravois Roads. 

So far the city has received $852,241, or half, of its scheduled ARPA funds, with the remaining $852,241 coming in mid-2022. 

During the first reading of the capital projects plan Nov. 9, Ward 3 Alderman Randy Epperson motioned to move phase 2 of redoing city hall’s parking lot from 2024 to 2023. The project is going to be paid for out of ARPA funds is budgeted to cost $250,000. 

“I was driving around the city hall campus the other day and I noted there’s pretty much two parts to that campus … and after doing a little bit of research … the streets on the police department side … have not been serviced since they were built 21 years ago,” Epperson said. “They’ve seen better days. … Realistically, we could easily move that (project) up to 2023 and get these done and I think they can last another year obviously, but I think it’s a reflection on the city. They’ve certainly gotten their lifespan and money’s worth out of the 21 years, soon to be 22.” 

Daues questioned why public works had not proposed redoing that side of city hall’s campus sooner and why it took an alderman to bring it forward. 

Director of Public Works Bryson Baker said that the city had wanted to follow up after the first phase of the project but that budget constraints forced the city to kick the project “down the road” and prioritize residential streets and needs. 

Epperson’s motion passed unanimously.