Revenue prognosis for Cape is gloomy at retreat

Cape Girardeau city government is so strapped for cash that it's considering eliminating the employee Christmas party, a move that would save $7,500 this year.

But the city council said Friday at its annual retreat that it would prefer to keep the holiday party even if employees had to pay part of the cost.

"Morale is an important thing," Mayor Jay Knudtson told the city staff at the all-day retreat held at Black Forest Villages north of Cape Girardeau.

"Very frankly, we don't have the money, so we cut it out," city manager Michael Miller said.

City officials pored over the minutiae of municipal finance on Friday. Most of the news was negative.

City officials are projecting tax revenue to be slim this year. The city's 1 cent sales tax is expected to grow by 2 percent, generating $7.95 million in revenue or about half of the revenue for the estimated $15.6 million general fund for the new fiscal year, which starts July 1. The general fund is the city's main operating fund.

The franchise tax paid by AmerenUE is expected to generate $2.38 million. The rest of the revenue comes from property taxes, permit and license fees, municipal court fines and fees, state motor fuel taxes and such things as grants and user fees.

Without new taxes, the city can't afford merit or across-the-board pay raises, officials said.

None was included in the proposed fiscal 2004 budget shown to council members on Friday. But that could change if voters approve the April 8 tax measures, Miller said.

Voters are being asked to approve four tax measures that would generate an estimated $4.13 million a year in added revenue. More than $1.3 million of it would go for operating expenses. Money also would be spent on replacing old equipment, improving storm drainage, replacing a fire station, expanding the police station and building a water park.

The city has proposed a quarter-cent sales tax for fire department needs, a local-use tax or sales tax on out-of-state purchases above $2,000, a storm-water fee and extension of a 10-cent property tax.

Even if some or all of the measures pass, most of the taxes won't kick in until late this year, city officials said. But the city could dip into its unreserved fund balance, projected at $822,504 by June 30, the end of the 2003 fiscal year, officials said.

Even without raises, the city faces rising personnel costs for its more than 300 employees. These costs are expected to increase 2.9 percent to $13.3 million in the new fiscal year.

Personnel costs increased 23.9 percent over the last six fiscal years, driven in large part by rising health-insurance costs, city finance director John Richbourg said.

Meanwhile, city revenue has declined in some areas. Parks and recreation fund revenue is expected to total $484,800 in the new fiscal year, down 1.8 percent from the current year's projected revenue and well under the $523,000 generated three years ago.

Dan Muser, parks and recreation director, said revenue from A.C. Brase Arena Building rentals has declined since weekly bingo games moved to Bingo World, a commercial venue that opened in Cape Girardeau in the fall of 2001.

The Kiwanis Club held its bingo games at the Arena Building for years, paying rent to the city.

City officials said they're locked into rental fees for the city's Arena Building and Osage Community Centre. Raising those fees would require voter approval.

The city can't afford to apply for some federal grants because it doesn't have needed matching money, officials said.

Even the April election is a spending drain on the city. The city must pay $10,300 to cover ballots, poll workers, etc.

"There is no free election," Miller said.

mbliss@semissourian.com

335-6611, extension 123