Cape budget to reduce spending, increase employee pay

The Cape Girardeau City Council is expected Monday to approve its annual budget for the coming fiscal year; it reduces spending by more than $2 million from the previous year's budget.

Included in the proposed budget is a 3 percent pay raise for all city employees, made possible in part by decreases in operating expenses and debt service costs.

The just more than $71 million budget represents a 4.8 percent fall in projected spending from the 2012-2013 original adopted budget. The city's charter requires the council to pass a budget before July 1 each year.

The pay raises, if approved, would cost the city $557,370 and would go into effect after July 1.

Mayor Harry Rediger said employees also were given raises in the last three years. the years 2012 and 2011 brought 2 percent raises, while in 2010 there was a 1 percent raise for city employees.

Early retirement of bonds that paid for construction of the River Campus at Southeast Missouri State University is part of the reduction seen in the debt service costs -- the city anticipates saving 6.5 percent when compared to last year on bond payments. Other savings are heavily represented by decreases in debt service payments and operating expenses in the city's water division within the Public Works Department.

One element of the budget that remains uncertain is a section covering the enterprise fund that pays for solid waste pickup. The council was reluctant to pass an ordinance earlier this month that would have raised trash rates 85 cents per month, per customer, which city staff say is needed to cover continuing higher than anticipated garbage truck fleet maintenance costs and a fall in revenue produced by solid waste drop-offs at the city's transfer station. Revenue from the transfer station has traditionally been used to offset a portion of monthly residential solid waste charges, according to city documents.

The council did not approve the ordinance at its June 3 meeting, and the proposal would need to pass as an emergency ordinance Monday for the increase to take effect.

Rediger said he knew several council members did not earlier agree with the increase because they felt they did not have enough time to evaluate the proposal, but said he is confident it will pass Monday.

The council also is expected to give final approval to a sewer rate reduction of $1 per month.

During the study session, the council will continue discussion of a citywide vote likely to be placed on the November ballot, which, as proposed, would ask residents to make permanent half of a 1-cent sales tax levied on all restaurant receipts and half of a 1/4-cent fire tax set to expire in 2014. The mayor and other council members have advocated keeping the restaurant tax levy at the full amount to help pay for a new police station or other capital projects.

Through the end of May, the restaurant tax produced $1,222,000 from the beginning of the fiscal year in July 2012, up from $1,159,000 in the same time frame the previous year, according to figures released by John Richbourg, the city's finance director. A 4-cent hotel/motel tax produced $619,000 through the end of May, up from $557,000 at the same point the year before. The revenue from the restaurant tax now goes to pay off River Campus bonds, while the revenue from the hotel/motel tax funds the operation of the Cape Girardeau Convention and Visitors Bureau.

The rise in revenue seen in those tax levies follows the total projected rise in all sales tax revenue included in the proposed budget.

City officials say revenue growth in the last year has been strong, which should allow the city to end the fiscal year with a general unreserved fund balance that exceeds $3 million.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, Mo.