MAYOR’S CORNER 

Change—Some Good, Some not so Good! 

At the time of this writing, our once a week trash pick-up had not started; however, as you read this, the change should have been completed.  Therefore - no feedback on how it’s going.  You have undoubtedly heard reasons why the change was made and why at this time.  Let me be sure you have all the facts about this decision.  I will attempt to do this in two ways:  (1) summarize the process with the reasons and, (2) if you want more, I will provide details to explain our reasoning.  You can decide how much information you want.  The summary is in two parts:  Why Change and Why Now

Why the Change:  

In my chronicle articles in the February, July and October 2008 issues, I discussed the City’s continuing deficits--trying to give a heads up--that action would be needed soon, either increase revenues or decrease expenses.  It became apparent in late fall 2008 the recession was going to affect our revenues more than anticipated and our surplus was dwindling fast (interest rates down to 1% or less).  The only vehicle to increase revenues would be to ask you, the citizen, for a tax increase in your property tax.  In today’s environment, we didn’t see that as a viable option.  To address the deficits, a review shows they are a result of: (1) general sales revenues (our largest source) have been flat for the last five years, (2) the increase in our largest expenses (police and sanitation) and (3) lower interest rates.  Thus our approach was to work on our largest expenditures first.  The change in our trash contract will save us approximately $80,000.  And in preliminary discussions with St. Louis County Police, we anticipate maintaining our current contract with no increase in charges for the 2009-10 year.  Our efforts to control these revenues and expenses are discussed in subsequent paragraphs. 

Why Now (April 2009)? 

The City’s fiscal year is July 1 thru June 30.  Our current trash contract was signed October 1.  So it appeared we would not be able to address one of our biggest expenses (trash 38% of our expenses) until fiscal 2009-2010.  However, in discussions with our hauler (Meridian) we were able to negotiate a much better rate for once-a-week trash pick-up if we would do so now and not wait until the current contract expired. 

This summarizes our reasoning and the process leading us to the decision, if this satisfies your questions, skip to the last paragraph – if not, read on.  

Facts Considered in Trash Change 

In my February 2008 Mayor’s Corner, I explained our financial condition was continuing to deteriorate.  This began in 2005 when the City of Ballwin (who had been providing police protection to us for over 20 years) increased the price by $40,000.  In 2007, we signed a contract with St. Louis County for police service, increasing our coverage to an officer in the City 24 hours a day at $25,000 less than the Ballwin bid.  Trash collection in 2006 jumped over $83,000 (to $393,296).  In 2007, we found a new company providing better service for less money--$372,000 (almost $50,000 less than the previous year).  The point is, our two largest expenditures we feel we are controlling as well as the marketplace allow. 

Take a look at the revenue side of our budget first. 

Revenues we do not control:

 2009-10 Budget

 

 

 

 

 

 

 

 

 1)

General Sales Taxes

 

 $ 374,000.00

 

 

 

These are distributions of the state taxes collected through

 

 

 

 

 

the County to us based on population

 

 

 

 

 2)

Personal Property and Real Estate Taxes:

 

 $   17,000.00

PP

 

 

Currently the rate applied to generate these taxes is

 

 $ 123,000.00

RE

 

 

calculated each year not to exceed the generation of

 

 

 

 

 

revenues at the time the Hancock Amendment was

 

 

 

 

 

passed (1984).  This can only change if voters vote

 

 

 

 

 

for an increase in these taxes.

 

 

 

 

 3)

Utilities Franchise Tax:

 

 

 

 

 

The rate of 2% on electric service is set by you, the voter

 

 $   71,000.00

 

 

 

and can only be increased by a vote.  The cable

 

 

 

 

 

fee of 5% was set by the state in a recent court case. 

 

 

 

 

 

These are obviously usage-sensitive revenues.

 

 

 

 

 4)

Cigarette Tax:

 

 $     8,000.00

 

 

 

Has not declined as much as you might expect -- $1,000

 

 

 

 

 

over the last four years.

 

 

 

 

 5)

Gasoline Tax:

 

 $   80,000.00

 

 

 

A bit of a surprise here also, holding at 79,000-80,000

 

 

 

 

 6)

Fee Increases:

 

 $   13,000.00

 

 

 

Down last year from $17,800 to $13,000.  These are fees

 

 

 

 

 

coming from state licensing of boats, autos, etc.

 

 

 

 This total of $686,000 is 74% of our revenue budget.  With 74% of our revenues not within our immediate control, this side of the equation offers no relief.  However, for the future, we can cause an effect to the real estate, personal property and franchise fees by citizen vote. 

Revenues We Control: 

Permits and Inspections: 

This is revenue from plan review and inspections made by our building commissioner.  The fees charged for these services are commensurate with the services provided and are comparable with other cities. 

Interest Income: 

We have and plan to continue with federal insured CD instruments.  When interest rates fell in the second half of 2008, our income for the previous three years ($26,000 to $35,000) dropped to $9,000.  We are consulting with banking institutions to better position our surplus with safety. 

Traffic Fines: 

These fines are a direct result of trying to provide a safe environment throughout the City and make our roadways safe to travel.  If you hear the City has a speed trap on Clarkson Road—my answer is simple, YES, and it will be there until people slow down (from going between 60 and 80 mph).  We have had only one major accident in the last 20 years, but plenty of near misses.  And I know the residents along Kehrs Mill Road feel the same way about Kehrs Mill Road. 

Major Expenses: 

Our two biggest expenses for the 2009-10 fiscal year will continue to be Police and Sanitation—police $382,608 (40%) and sanitation $302,646 (32%).  The good news is the cost of police protection has leveled off and sanitation is down from $385,000. 

I discussed these expenditures earlier, just a note: at $382,608 that’s only a 6% increase over 3 years and, based on your feedback, the protection is outstanding. 

Sanitation: 

This contract for the once-a-week trash pick-up is extended from April 1, 2009 to July 1, 2010 allowing us additional savings for this fiscal year. 

Professional Fees: 

As most of you know, we contested the proposed sound walls that were to be placed along Clarkson Road.  It started in 2004 and concluded in 2008.  The attorney fees for the 5-year period were $190,000 ($40,000 per year).  A survey of our citizens conducted before we started the action, reflected over 70% of you wanted to use City funds to stop the walls.  As it turned out, MODOT has abandoned the project. 

Engineering Fees: 

Most of these expenses (for plan review and inspections) are covered by the fees for his service.  However, he does perform other duties not covered by these charges; i.e. follow-up on citizen complaints, etc. 

Salaries: 

We have two full-time employees.  The city attorney and the building commissioner are contracted.  We review salaries annually to evaluate with comparable positions and believe our pay is appropriate to the market place. 

Let me reassure you, your City government is working to preserve the kind of City you wanted when you moved here—a City with a beautiful environment, large lots, safety at home and safety on the streets, with no threat of commercial businesses violating your subdivision.  All this with low taxes and that’s a subject for another Mayor’s Corner. 

A working draft of our 2009-10 Budget can be found on our website at www.clarksonvalley.org.  The final budget will be approved at our June 2, 2009 Council Meeting.