Operating Budget Workshop Meeting 2003

Meeting Agenda

Meeting Minutes

MINUTES of the OPERATING BUDGET WORKSHOP
November 10, 2003

The meeting was called to order by Mayor Jones at 5:34 p.m. in the Board Room at the Ballwin Police Department.  The meeting was open to the public and notice was posted in the 24-hour lobby of Ballwin Police Department, the Government Center, and The Pointe on the Friday preceding the meeting.  Those in attendance were Mayor Jones, Aldermen Easter, Buermann, Suozzi, Robinson, Anderson, Gatton and Lembke.  Also in attendance were City Administrator Kuntz, Assistant City Administrator Aiken, Finance Officer Loehr, Director of Parks and Recreation Bruer, Chief of Police Biederman, City Engineer Kramer, Deputy Director of Public Works Levoy, and City Attorney Lucchesi. 

OVERVIEW

City Administrator Kuntz presented an overview of the Operating Budget for 2004.  He said $300,000 will be used for Parks maintenance and operating.  A lease/purchase agreement has been arranged for the salt storage building.  Instead of a conventional purchase of $317,000, a lease purchase agreement is proposed that will spread the cost of the building over 5 years and enable construction in the first year.  It obligates the Board to future years of budget commitment, but it frees up dollars in the 2004 budget to do other items.  The operating budget reflects a 4% merit salary adjustment based on evaluations with an effective date of January 1.  There are higher contributions to the pension system and there is an additional payroll date in 2004.  There is a 10% increase in employer contributions to health insurance premiums.  When it exceeded that in the past, formal proposals were solicited, and the lowest bid was recommended.  When the lowest bid was not the current carrier, and the majority of the employees elected to stay with the current carrier, the employees absorbed the difference over the 10%.  Until April, the new rate will not be known. 

Mayor Jones voiced concern about the condition of the tennis courts in Vlasis Park.  He asked if for some reason Ballwin did not receive the grant, could the fence be repaired and the cracks in the pavement sealed.  Director of Parks and Recreation Bruer said these repairs will be done.  A response regarding the grant can be anticipated in December or early January.  City Administrator Kuntz said there are two grant funds, one for large cities and one for smaller cities.  Linda’s application was right at the average grant for large cities in the previous grant cycle.  This is only Ballwin’s second funding request.  The tennis courts renovation is the last major piece of construction in the park project. 

Alderman Anderson asked about the sales tax revenues and the 4% increase.  Finance Officer Loehr said the revenues that were budgeted for 2003 were optimistic.  Compared with what the actual 2003 revenue figures are expected to be, 2004 will be a 4% increase.  City Administrator Kuntz said the most current check was about equal to what it was a year ago in the TIF area, but not the rest of the City.  Finance Officer Loehr said the City was $50,000 down in the regular retail area and another $20,000 down in the pool share for the October check that Ballwin receives.  The money received in January must be credited back to the year before because it was the year before receipts.  At this point in time, Ballwin should be at the 75% mark in revenues and it is not. 

Alderman Buermann said Ballwin has always been conservative in the sales tax revenue estimates.  He thinks a 4% estimate is risky.  Finance Officer Loehr said that she is optimistic that the projection for the capital sales tax, which is $1.4 million, will be better in 2004. 

OPERATING BUDGET

Finance Officer Loehr said the revenues presented in the Capital budget, an extra $50,000 was moved from the Parks sales tax to the Operating budget.  $430,000 was moved from the county road tax to the operating budget.  These are appropriate transfers because street maintenance is in the operating budget.  Parks sales tax is also used for maintenance of the parks.  $30,000 was added to the Parks grant application.  By reinstating the Manchester Road sidewalk project, Ballwin will be reimbursed $245,000 from the State.  The total would be $5,667,682.  This will leave a $1,200 surplus over the expenses budgeted.

The sales tax revenue is lower.  It was a good year for vehicle sales tax.  The permit fees were increased during the year administratively.  City Administrator Kuntz said that none of the revenue numbers reflect any impact from the November 4 election.  Should these issues be successful, the revenues will add to reserves in 2004..  Finance Officer Loehr said that since the budget was prepared before the election, only $315,000 was budgeted to receive from business licenses.  The original operating budget was $13,308,423.  Including a 4% salary raise increased the budget by about $291,000.  The salary portion of the budget increased by almost $½ million by having the extra payroll plus the increase in the LAGERS percentage. 

Finance Officer Loehr said that moving the revenues from capital to operating is not a one-time procedure.  This will have to be done every year.  We have been dipping into reserves to balance the budget for several years and there won’t be anymore reserves to dip into.  $400,000 of the reserves is being used in 2003.  That much won’t be available to be used next year.  The same amount of income from capital or from another source will be needed next year.  City Administrator Kuntz said that if every dollar that was budgeted was spent and every dollar of revenue came in, and no other changes were made, there is $400,000 that is non-recurring because that was taken from reserves to balance the operating budget. 

PUBLIC WORKS

City Engineer Kramer said the salt storage building is budgeted as a 5-year program.  The yard expansion will be a 2-year program.  Grading, retaining walls, gravel base and fencing will be included next year with enough asphalt around the salt dome that it can be used in the winter of 2004-2005.  The retaining wall on Seven Trails is in bad shape.  The money for this repair remains, as does the Claymont sidewalk.  City Engineer Kramer said he will submit for a time extension for the Manchester Road sidewalk project, which will move the construction into the federal fiscal year which begins October 1, 2004.  Getting the money “obligated” will move the right-of-way acquisition completed by the end of September, 2004.

Mayor Jones asked what funds are at risk if the acquisition of the rights-of-way cannot be completed by September, 2004.  City Engineer Kramer said the funds have to be “obligated” before September 30, 2004 and the construction has to be obligated by September 30, 2005.  Mayor Jones said even though all of the rights-of-way are not acquired, an additional 11 months would be available for condemnation if necessary.  City Engineer Kramer said if the project is not constructed, all of the federal money would have to be paid back.  To acquire the rights-of-way, the offer can be made to the property owner.  If they counter with an unrealistic amount, after waiting the amount of time set out by federal guidelines, he would like to come before the Board and ask for authorization to proceed with condemnation.  City Administrator Kuntz said the right-of-way agent is aware of the tight schedule.

City Engineer Kramer said that before condemnation, Ballwin should consider removing all work from their property even if it means a retaining wall.  A retaining wall is usually cheaper than condemnation.  If there is resistance, staying off their property is an option if possible.  Because this project uses federal funds, O.R. Colon keeps files on everything they do and all conversations with property owners must be documented in detail.  The rules are very strict and funding could be in danger if they’re not followed.  If the Board members or Mayor is approached about this by a property owner, they should be referred to our agent.  The grant applied for two years ago was $675,000 for right-of-way.  Now the amount is estimated at about $200,000.  The total cost of the project is almost $1 million yet to go.  If the sidewalk is not constructed, approximately $170,000 would have to be given back.  If all of the right-of-way was acquired, the engineering, utilities, the reimbursement would be about $200,000 if the project was not constructed.  Mayor Jones said that Ballwin would be out $305,000 and not have the sidewalk in the worst case analysis. 

Alderman Lembke said that the purpose of constructing the Manchester Road sidewalks is to make shopping in Ballwin easier.  Approximately $15 million in additional sales will have to be generated over a period of years to pay for the project.  City Administrator Kuntz said that $200,000 for the Claymont Drive sidewalk over 4 years has nothing to do with sales tax.  It’s about the quality of life.  The sidewalks won’t pay for themselves if sales tax is the motivator.  Alderman Buermann said that the City has done a good job in the past 4 or 5 years of getting sidewalks along Manchester Road.  There are 20 property owners yet to construct sidewalks.  Due to the economic conditions that exist, a business way of doing this should be used. 

City Engineer Kramer said that the right-of-way agent believes that without condemnation, the easements can be acquired by the end of September, excluding any condemnation time.  Technically, all of the right-of-way does not have to be acquired by September 30, 2004.  The construction must be under contract before September, 2005.  All of the right-of-way must be acquired before MoDOT will give final plan review.  Alderman Anderson asked how long does condemnation usually take.  City Engineer Kramer said his experience was that it can take months.  The court appointed commissioners decide when they will meet and look at the project at their leisure. 

Mayor Jones said that this is the time to decide if the Board wants to go forward with the project.  If the project is completely abandoned, Ballwin would still owe approximately $73,000.  Without the construction, it will be approximately $300,000 of federal funds.  City Engineer Kramer said the list of potentially difficult right-of-way acquisitions has been given to the right-of-way agent.  The contract for the agent is worth $120,000 or less.  It is a unit price contract.  This does not include what would be paid to the property owners.  $80,000 has been included in the estimate for this purpose.

City Administrator Kuntz said he does not want the property owners who refused to cooperate to get by without paying when everyone else has contributed to build the sidewalk.  If this can be done, he recommended staying with the sidewalk project.  The gaps in the sidewalk are more of an inconvenience than if there was no sidewalk at all.  Alderman Easter agreed saying it’s not fair to the property owners who have paid and have constructed sidewalks in front of their property for the City to go ahead and finish the project after they have already paid their money.

City Attorney Lucchesi said that due to the safety concerns along Manchester Road with some sidewalks in place but not at all locations, there could be justification to get the rest of the sidewalks done.  If you deviate from what the court approved, there is a potential problem.  If you don’t like what the court did, it will be better completing the project piecemeal as they come up for a Special Use Exception than any other method.  Mayor Jones said if the project was completed with Federal funding, a special tax bill could be sent out assessing each property the 30% of the City’s share.  City Attorney Lucchesi agreed that this could be done.

Alderman Easter asked if the Special Use Exception transfer is not contingent upon the sidewalks being constructed, how can they be asked to pay for it.  City Attorney Lucchesi said that most of the S.U.E. petitions have something else that they are contingent upon.  When there are other grounds to base the decision, it is not based on a refusal to construct a sidewalk. 

Alderman Gatton said this is an opportunity to get the sidewalks constructed and he believes that the Board should move forward with the Manchester Road sidewalk construction.  Alderman Robinson agreed that the project should go forward because 70% of the cost is covered.  Mayor Jones said that the property owners who have already paid their share for the sidewalks would expect the City to complete the project.  The Board was in agreement. 

City Administrator Kuntz said the Operating budget does not reflect any additional positions.  The manpower will remain the same.  The lease/purchase for the salt building is a tax exempt municipal lease.  At the end of 5 years, we own it.  Bids will be solicited from 3 or 4 companies and the facility could be available for use before next winter. 

POLICE

Police Chief Biederman gave an overview of the Police Department budget.  Half of the vehicles will be replaced.  Operating expenses have been cut.  One position has been frozen for the coming year.  Bullet resistant vests on which warranties have expired need to be replaced.  The intercom system in the booking room is failing and needs to be replaced. 

Alderman Anderson asked how much revenues comes to the City by providing police service to Clarkson Valley.  Chief Biederman said $221,000. 

PARKS AND RECREATION

Director of Parks and Recreation Bruer said that the $50,000 budgeted for the log home has been reduced to $25,000.  $25,000 is also budgeted for the school house.  Alderman Gatton asked what is covered in the $25,000 for the log home, since $60,000 was originally budgeted to rebuild the log home.  Ms. Bruer said siding could be installed.  City Administrator Kuntz said that the amount was reduced because if $50,000 was requested, it would be excessive and probably be rejected.  If the siding cannot be installed for $25,000 or less, it will be recommended that all of the remaining resources be applied to the school house.  If it becomes a $50,000 or nothing solution, other considerations will have to be made.  This is a net reduction of $20,000.

Ms. Bruer said renovations are not being made to the tees at the golf course.  This budgeted work for 2004, which was $25,000, has been postponed to 2005.  A blower in the golf course budget has also been postponed.  The total revised capital cuts are $53,000.  $50,000 of the Parks sales tax that is used to fund park capital is moved to operating.

This will be the first full season of operating North Pointe.  There will be 102 operations days compared to 80 in 2003.  The expenses and revenues will be higher.  It is expected to net $120,000 profit at North Pointe next season. 

The Pointe budget is $103,000 more than last year.  The increase including salaries, extra pay period and pension is an increase of $113,000.  Other than salaries and benefits, the actual operating budget is lower than last year.  The regular hours will be reinstated and will not have shorter hours.  At the end of September, the revenue and expenses were even. 

The fairways at the golf course will receive a fungicide application and a deep tine aerification of the greens, which has not been done since the new greens were built.  The USGA will visit to give an objective assessment of the course, maintenance suggestions and what needs to be done to keep the course in good shape.  This is money well spent and this is done every 2 years. 

Allen Roofing has offered to remove the 3 roofs that are on the school house building and put on a new roof at no cost to Ballwin.

ADJOURN

The budget work session was temporally adjourned 6:55 p.m. to allow the regular Board meeting to proceed.

RECONVENE

The budget work session was reconvened at 7:55 p.m. to discuss the Administration Operations budget. 

ADMINISTRATION

Assistant City Administrator Aiken gave an overview of the Administration Operations budget.  It is essentially the same as last year but approximately $60,000 less.  A salary increase is included.  The biggest reduction was the City not paying for the recycling and passing this expense to the residents.  There is an increase in the cost of insurance and the 2004 budget includes a $75,000 contingency that was not in the 2003 budget.  All of the reductions came from the non-salary portion of the budget.  The administration budget is composed of 6 programs:  Planning and Zoning, Inspections, Community Service, Legal/Legislation, Support Services, and Information Systems. 

Mayor Jones asked if the $25,000 for TIF municipal revenue funding is the result of an anticipated payment shortfall in August, 2004.  City Administrator Kuntz said that this is correct.  Ballwin has budgeted for 35% of the TIF revenues as provided in the agreement.  Due to the apparent resolution of the property tax issues on the sale of Olde Towne from Regency to the new owner, based on our calculations, there will not be a shortfall.  This budget is a conservative measure against the possibility that there is a shortfall. 

Alderman Buermann said it was estimated that there would be 4% growth.  He asked if it is realistic that this will be attained.  City Administrator Kuntz said that until today’s check, the last two sales tax checks were in excess of 5% increase.  The check we just got was about the same as it was a year ago.  We thought we were moving towards a trend and then this was a setback for September.  Between now and the end of the year will determine if we are on the right track.  We will probably be $300,000 or $400,000 short in collections for this year.  It has taken longer to come out of the recession than anticipated.  The trend seems to be moving forward. 

Mayor Jones said a motion was adopted to draft legislation for approval of the capital and operating budgets. 

Alderman Easter, as Chairman of the Public Health & Safety Committee, requested a committee meeting at 6:15 p.m. on November 24, to review the responses from the Ballwin restaurants regarding the proposed smoking restrictions.  Alderman Gatton said the State law is written to allow communities to enact stricter regulations.  He recommended inviting a State official to attend the meeting to explain how the State law works and to answer questions. 

ADJOURN

A motion was made by Alderman Easter and seconded by Alderman Buermann to adjourn the Budget Work Session.  A voice vote was taken with a unanimous affirmative result and the motion was declared passed.  The Work Session was adjourned at 8:10 p.m.

Robert E. Jones, Mayor

ATTEST:
Robert A. Kuntz, City Administrator 
MC