Task force to solve question of tax increase

Friday, July 12, 2002

CAPE'S FINANCIAL WOES

By Bob Miller ~ Southeast Missourian

A substitute teacher, a financial adviser, an organ donor program specialist and two former mayoral candidates were among the 10 Cape Girardeau residents Thursday who began a quest of deciding whether or not the city needs to increase taxes.

The Citizens Finance Task Force, created by the Cape Girardeau City Council to assess the city's financial situation before the council asks voters to approve a three-quarter cent sales tax increase, met for the first time as city finance director John Richbourg explained the city's various funds and accounts.

Organizers said understanding the city budget is the first, basic step in solving the city's financial crunch.

"I was impressed with the depth and the volume of research gathered by the city," said Phil Ivers, a financial adviser. "And I was impressed with the diversity of the citizens on the panel."

The task force roster is made up of 10 men and three women. Some of the members have lived in Cape Girardeau all their lives, and others have recently moved to the city. Breita Church said she moved here just over a year ago and "just fell in love with it."

Ten of the 13 members on the panel were present at Monday night's meeting. Melvin Gateley, a longtime public servant who served two terms on the city council and ran for mayor this spring, was named co-chair. The other chairperson is Nancy Jernigan, the executive director of the area United Way.

Mayor Jay Knudtson was largely responsible for putting the group together.

"I think it's truly grass roots," Knudtson said. "It's what you're supposed to do. This group is not about who you know or what you do, but what you represent as a resident of Cape Girardeau. I'm just real proud of the cross section of folks we have here."

The task force will review the findings and recommendations made by a similar committee, the city's revenue team, which consisted of city employees who are not department heads. The revenue team studied the financial issues and asked the council to put a three-quarter sales tax increase on the August ballot.

The council thought that time frame was too short to educate the public. The council then assembled the task force so residents with no direct involvement with the city's operations could come to their own conclusions.

Stan Wicks, who was a mayoral candidate last spring and was asked by Knudtson to be on the task force, said he is looking forward to studying the city's operations.

"I'd be a lot more willing to pay a little extra if the city came back and said 'We've eliminated this, we cut that and we still need a little more money,'" said Wicks, who lives on North West End Boulevard. "But if the first thing they say is they need more money, I'd have a problem with that. With the task force, the citizens will have more knowledge of what's going on. It's an awesome idea, because the public sometimes feels left out of the loop."

Elizabeth Seesing, a substitute teacher who lives on Good Hope Street, was asked to be on the task force by her ward representative, Charlie Herbst.

"I feel it's real important that the city gets community input," she said prior to the meeting. "I'm going in with an open mind."

The panel will hold six meetings, the last coming Aug. 1.

The task force is the latest product of an economic downturn that has caused the sales tax rate to increase more slowly than the inflation rate. Because revenue has not come in as expected, the city has spent more than it has earned for three straight years. The city has used reserves to make ends meet.

Over the last three years, the city has maintained all of its services, but it has not been able to adequately replace equipment. City employees in many cases are working with outdated equipment and in buildings that are either too small or in need of repair.

Some of the financial burden is due to an equipment replacement program that is being set up to keep up with depreciation. The city is saving money for the long term, essentially doubling payments on new equipment. The savings eventually would allow the city to replace outdated equipment annually instead of relying on what is left over after operation costs. It will take 14 more years for the equipment replacement fund to reach the targeted amount of $1 million per year.

The city also has increased its payroll. A study performed in 1996 revealed the city's salaries were lower than other comparable cities in Missouri. Over three years, those salaries were brought up to a competitive level. Even though across-the-board raises were not given for three straight years -- a 1-percent raise is called for in this year's budget -- annual step increases, as well as improved retirement benefits, have increased expenditures while tax revenue has shown virtually no increase.

Meanwhile, several economic issues factor into the decrease of tax receipts beyond the slowdown seen by the rest of the nation. Richbourg has pointed at Internet sales and an increase in the number of stores in nearby towns as detriments.

bmiller@semissourian.com

335-6611, extension 127

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