Some Cape Girardeau city employees will be getting pay raises under the new city budget approved by the city council last week, and none of it will come from the new fire sales tax.
The budget for the new fiscal year that begins July 1 includes reinstating the current merit pay plan that has been on hold for the past year because of a money crunch.
Adoption of the budget for fiscal 2005 means that some city employees will receive pay raises in the next six months even as the city works to develop a new pay plan, city manager Doug Leslie said.
Merit pay is awarded on the anniversary of an employee's hiring. For eligible employees, pay would increase about 2.65 percent, said finance director John Richbourg.
Reinstating merit pay is a major step because city employees saw no pay raises last year, city officials said. The city has about 360 regular full-time and part-time employees.
Development of a new pay plan could change the city's pay structure by January, city officials said.
The city council approved a $45.8 million budget a week ago today, the day before the fire sales tax election. The spending plan doesn't reflect the $2 million annually the city expects to receive from the new quarter-cent sales tax approved by voters on Tuesday.
The money will fund improvements to the fire department and free up money in the general fund to make improvements at the police department.
But the new tax doesn't go into effect until October, and the city doesn't expect to start receiving sales tax checks from the Missouri Department of Revenue until December or January.
With the new fiscal year starting in less than three weeks, city officials said the council had no choice but to adopt a fiscal 2005 budget that doesn't take into account the fire sales tax. The council is expected to give final approval to the budget on June 21.
"We didn't have time to amend the budget," Richbourg said.
With the city not expected to receive any of the additional tax money until late this year at the earliest, city officials said there was no need for quick revisions to the budget.
Among other things, the city plans to build a new fire station and buy several fire trucks over the next decade. But Richbourg said it takes time to draw up architectural plans for a new fire station and to have new fire trucks manufactured.
As a result, Richbourg said the city won't need the added tax revenue for project construction and actual purchase of equipment for the police and fire departments for at least nine months.
The budget approved last week by the council earmarks $34.46 million for operating expenses, which is $110,540 less than the current fiscal year's budget.
Total capital expenses for equipment and construction projects are budgeted at $11.4 million, up nearly $1 million from the current year's budget. But those expenses don't include any of the new police and fire department improvement projects planned as part of the fire sales tax measure. Many of the projects in the latest budget are road improvements.
Richbourg said he expects the operating budget figure will be increased to reflect the new fire sales tax revenue later this year.
The new budget includes 2 percent increases in residential and commercial water rates and 5 percent increases in parks and recreation fees to meet operating expenses.
As in past years, Cape Girardeau relies heavily on sales tax and franchise tax revenue to pay its bills. Sales and franchise taxes represent 63 percent of the revenue projected for the city's general fund, the municipal government's main operating fund.
City council members said little in approving the budget last week. Mayor Jay Knudtson said the major budget decisions were made earlier in the year when the council cut spending. "Approval is rather anticlimactic," he said.
The budget reflects $158,000 in spending cuts approved earlier this year by the council, including the elimination of the next spring cleanup for trash.
"It's pretty lean," Richbourg said.
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