Cape Girardeau City Council to vote on budget, rate increases Monday

On Monday night, the Cape Girardeau City Council will finish work on a $54.1 million budget that offers no raises for city workers and relies on new revenue transfers from water, sewer and trash service to balance the general fund.

The budget vote will complete one of the most difficult efforts to craft a spending plan of Mayor Jay Knudtson's tenure. The local effect of the national recession has cut into sales tax revenue, and the budget relies on receiving overdue rent payments from Commander Premier Aircraft Corp. to begin rebuilding depleted reserves.

Knudtson, who is term limited, will be out of office by the time the budget year ends June 30, 2010. After several years of offering big ideas to voters -- and winning approval each time -- the focus is back on the basics of city operations, he said.

"The budget has truly become our reason to live," Knudtson said. "... The allocation of our time for the last six months has been centered around the budget."

The budget vote will be part of the council's regular meeting, which begins at 7 p.m. Monday at city hall, 401 Independence St.

Along with approving the budget, the council will also vote on an ordinance increasing water and sewer rates by 5 percent and trash pickup fees by 2 percent. The average bill for residential water, sewer and trash service will increase $1.95 to $50.80 per month. The average bill for commercial water and sewer service will increase by $6.87 to $144.28 per month.

The increases will appear on bills issued after the city budget year begins July 1.

That extra revenue would help fund two new transfers, totaling $425,000, to cover expected shortfalls in the general fund. One change would charge the water, sewer and trash funds $139,000 for the estimated cost of city administration of those operations. The other change would impose a 5 percent payment in lieu of sales taxes on the water, trash and sewer fund.

The tax payment will not appear on bills but will bring about $286,000 into the general fund, said John Richbourg, city finance director.

The spending plan projects an unrestricted ending balance of about $100,000 on June 30. If revenue arrives as projected, including Commander Premier's rent on its production building at Cape Girardeau Regional Airport, the unrestricted reserve would increase to almost $380,000, the first increase since 2004.

Sales tax revenue is down about 1.3 percent for the current year, and the budget projects no increase. "That creates huge challenges for us," Knudtson said.

The problems would be worse, however, if voters had not approved sales taxes in recent years to support road construction, police and fire operations and parks, Knudtson said. All three take pressure off the general fund, he said.

"It would be a chaotic situation," Knudtson said. "We would be in a situation where we would experience significant layoffs and significant cutbacks. Without those taxes, it would be a completely different city from a financial standpoint and an appearance standpoint."

rkeller@semissourian.com

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Pertinent address:

401 Independence St., Cape Girardeau, MO