Cape Girardeau City Council studies '09 budget

Friday, April 25, 2008

Before June 18, Cape Girardeau's city council members will have to make some hard decision about money.

John Richbourg, the city's financial director, pointed out key issues in a two-hour budget review Wednesday evening.

With the combination of a general economic slowdown and rising costs, the city must be conservative in how it manages money, Richbourg told the board.

He said fuel prices are expected to rise by nearly 50 percent, just one cost pushing up the next fiscal year's expenses for the city by an estimated 4.7 percent — $331,737. Other costs going up are health and dental coverage.

To meet the city's needs, Richbourg said, sales tax revenue must increase by 2 to 3 percent.

Though he recommended the city council seriously consider opting out of the sales tax holiday, that may not happen. Mayor Jay Knudtson said that while he was opposed to new sales tax holidays, the original back-to-school tax break was aimed at families. In light of the recent passage of the sales tax for parks and storm-water improvements, he said, tax payers deserve the holiday.

The state legislature recently approved two additional tax-break shopping dates. June 27 through 29, state sales taxes will be waived to encourage people to spend their federal tax rebates. From Nov. 7 to 13, shoppers would not pay taxes on the first $1,500 for certain energy-efficient items such as furnaces, light bulbs or dishwashers.

"It seems to be a going trend to have these holidays with little regard to the local impact," said Doug Leslie, the city manager.

According to Eric Cunningham, the city's attorney, the decision to opt out would have to be made in May in order to meet a June 18 deadline to notify the state.

City officials debated whether a 2 percent across-the-board pay increase should be adjusted. Personnel costs make up 75 percent of the city's budget.

Councilman John Voss noted that operating costs for existing parks and recreation facilities would rise, but that user fees had not been increased. The parks and storm water sales tax approved last month only covers operations for future facilities.

Richbourg recommended the city council consider increasing sewer bills by 5 percent, water by 2.5 percent, solid waste by 3.5 percent and the transfer station by 6.2 percent. He said the new fees would raise the average utility bill by 3.47 percent, or about $1.64.

The city council will continue to discuss the budget at future meetings.

335-6611, extension 127

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