Cape Girardeau general fund balance up

Although a full budget picture for the city of Cape Girardeau won't be available for several months, officials are looking toward another good year thanks to above-trend sales tax and franchise tax revenue.

A general fund balance that sat at $416,000 in 2008 has grown to roughly $3 million, said city finance director John Richbourg. The larger fund balance can be attributed mostly to a sales tax revenue increase. In 2010, the total amount of sales tax brought in by the city was $8.9 million. The 2013-2104 budget includes an estimated $9.9 million after the actual amount in last year's budget reached $9.5 million. A combined growth in revenue of about $585,000 also was seen in franchise taxes on public utilities, cable TV and several others since 2010. The revenue represents about 60 percent of the city's general fund. The remainder comes from a combination of fees from city-issued permits and licenses and various taxes.

"It's getting better," Richbourg said of the city's overall financial picture. "We were at least able to give better raises this year and we haven't been able to give them like that the past several years. And before that we weren't giving raises at all."

A 3 percent pay raise for all city employees went into effect July 1 after the budget was approved by the city council. In 2011 and 2012, employees received 2 percent raises. In 2010 the raises were 1 percent.

Issues do, however, still remain for the city when it comes to the budget.

"We still have some operating cost issues to work out, like how to fund our equipment needs," Richbourg said. "You need to be able to fund those out of your operating budget, and currently we can't do that, so that's still a challenge that we need to get past. But compared to where we were five or six years ago, when we didn't have any money for raises or equipment either, we have improved."

Richbourg said the city also has done well controlling expenses, but nothing helps the budget like above-trend revenue. Some midyear budget adjustments, such as the transfer of property from the general fund to the sewer fund so that property can hold a new wastewater treatment plant that is under construction, also benefited the general fund by about $500,000.

City staff also ran into some pushback from city council members and residents about the size of sewer and trash bills during budget discussions this year. The way the city must manage its "enterprise funds" that pay for services such as sewer, water and trash was detailed for the council by staff to explain how only user fees can be used to support those services, per the city's charter, since not everyone agreed that an 85 cent per month increase was necessary for trash service. Higher than anticipated maintenance on a fleet of trucks put into use by the city in 2010 and falling revenue from transfer station tonnage prompted the increase, which was passed by the council June 17 on a second attempt. Some city council members also hoped for a larger decrease in the amount charged on sewer bills than the $1 that was passed.

"Basically, it comes down to you can't take money in an enterprise fund, like money from a sewer fee, and move it over and fund something for the softball complex, which is another of our enterprise funds," said city manager Scott Meyer.

The enterprise funds stand on their own to fund operating expenses for a certain service.

An overall budget of about $2.4 million less than the previous year was approved by the council with no changes from the version proposed by staff. About $1.8 million of that amount came from a reduction in debt service when bonds were paid off that are funded by the city's capital improvement sales tax. The remainder of the savings was a result of a decrease in operating expenses and capital project costs in the water services department, since some expensive equipment was replaced in 2012 and will not need to be paid for in 2013.

The budget is just more than $71 million. The city expects to have a full report available on the 2012-2013 budget within a few months.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, Mo.