City council voices concern over lack of pay raises in proposed budget; city officials see need for more revenue

Operating revenue for the city of Cape Girardeau is expected to total more than $72 million in fiscal 2019. Still, the city can't afford to give employees even a 1 percent raise, city officials said Thursday.

At a special study session to review the proposed budget for the fiscal year that begins July 1, city staff and council members expressed concern about flat sales tax revenue and how to pay for operations in the future.

City officials have projected operating revenue will total slightly more than $72 million, with expenses budgeted at more than $71 million.

Expenses for city operations have grown by about $20 million since 2011, city finance director John Richbourg said.

Mayor Bob Fox said the city has implemented numerous capital improvements funded with sales tax revenue approved by voters. But he said city officials have let the operating needs "slide a bit."

While the city does have reserve funds, Fox said that "the bottom line is we have to have more revenue."

Ward 4 Councilman Robbie Guard said the council may have to consider a real estate tax or some other type of tax. Guard said the city cannot continue to seek increased sales taxes.

Council members and city staff have voiced concern growing internet sales will lead to decreased sales tax revenue for the city. City officials are discussing placing a use-tax measure on the ballot next year in an effort to tax out-of-state purchases including internet sales.

City manager Scott Meyer said without increased revenue, city officials in future years may have to cut services.

But Ward 1 Councilman Daniel Presson said the city needs to look at "finding efficiencies" rather than cutting services or adding taxes.

Richbourg estimated a 1 percent pay raise for city employees would cost about $190,000 a year.

Presson said, "That doesn't seem like a lot of money."

But Meyer said the city can't afford such an expense in the coming fiscal year.

Ward 6 Councilwoman Stacy Kinder said, "No one is happy about the salary issue." Guard asked if the council could consider giving city employees a one-time bonus. Meyer said the city legally cannot give out bonuses to regular employees.

Guard said personnel costs are a major expense in city government.

According to online city budget figures, salaries and wages for the coming fiscal year will total $19.1 million or 26.8 percent of the operating budget. When employee benefits are included, the total expense climbs to more than $26 million or nearly 37 percent of the budget.

In terms of city departments, three areas account for much of the projected operating expenses. Public works expenses are tentatively budgeted at $28.5 million. Another $15.1 million is proposed in spending for the operation of the police and fire departments, and $7.15 million for parks and recreation, budget figures show.

Council members said the city has added facilities over the years, which has led to increased operating costs.

The city has also increased staff.

Richbourg said the number of full-time equivalent staff in Cape Girardeau city government has grown by about 30 employees over the past six years. The fiscal 2019 budget projects a staff of 494 full-time-equivalent employees, Richbourg said.

Much of the increase in city staffing has occurred in the police department where additional officers have been hired, city officials said.

mbliss@semissourian.com

(573) 388-3641

For more information: budget.cityofcapegirardeau.org