Crestwood board likely to put sales tax on ballot
By MIKE ANTHONY
An ordinance placing a quarter-cent sales tax on the August ballot to offset some of the costs of providing fire protection was scheduled to be considered earlier this week by the Crestwood Board of Aldermen.
The Board of Aldermen was scheduled to meet Tuesday night — after the Call went to press.
City Administrator Don Greer is recommending the Board of Aldermen place the quarter-cent sales tax on the Aug. 5 ballot. Approval of the ordinance placing the sales tax on the ballot appeared likely as no major objections to the recommendation were voiced by aldermen during a re-cent work session.
If the quarter-cent sales tax was placed on the ballot and approved by Crestwood voters, the city's sales tax rate would increase to 7.575 percent from the current rate of 7.325 percent.
The quarter-cent sales tax would generate from $900,000 to $1 million annually for the city's Fire Department, which has an annual budget of about $2.5 million.
If the board wishes to place the quarter-cent fire sales tax on the Aug. 5 ballot, a decision will have to be made Tuesday night because the deadline to place a proposition on the August ballot is 5 p.m. Tuesday, May 27.
The board's May 27 meeting begins two hours later — at 7 p.m.
As first reported by the Call, Greer told the city's Ways and Means Committee April 12 that he would recommend the Board of Aldermen place the quarter-cent fire sales tax before voters.
Greer's comments to the Ways and Means Committee about the sales tax came after he detailed the city's current financial condition, preliminary projections for fiscal 2004 and recommendations to eliminate a dozen city positions — primarily through attrition — plus other cost-cutting measures in an effort to reduce general-fund expenditures for the coming fiscal year.
In discussions with both the Ways and Means Committee and the Board of Alder-men, Greer has emphasized that reductions in expenditures and personnel are one-time cost-cutting measures. Any further efforts to reduce operating expenditures will require the elimination of services currently provided by the city, according to Greer.
In a May 6 memorandum to Mayor Jim Robertson and the Board of Aldermen, Greer noted that Director of Finance Diana Madrid has prepared a summary projection of revenues and expenses, containing both historical and future revenue and expense projections.
"As one can readily see, given a realistic picture of anticipated increases and operating cost and conservatively projecting our revenue position, a deficit position be-gins at the end of fiscal year 2005,'' Greer stated in the memo.
Without the additional revenue from a quarter-cent fire sales tax, a deficit of $388,079 is projected in the general fund at the end of fiscal 2005. The following year, fiscal 2006, a general fund deficit of $606,200 is projected.
"As we've previously discussed, the city of Crestwood has been in a deficit position for the most recent several years,'' the city administrator's memo stated. "(The) fiscal year ending June 30, 2002, was reported to the board to end with a positive fund balance only with the diversion of more than one-quarter million dollars to the capital improvements fund. Fiscal year 2003 was heading in the direction of deficit spending prior to significant adjustments to our operating expenses in October/November of 2002. We've been able to avert projected deficit spending for fiscal year '04 by severely reducing our personnel expenses.
"Detailed in my previous report to the board under the topic of recommended 'General Fund Efficiencies,' I summarize my recommendations for permanently reducing our labor costs,'' Greer's memo continued. "While this is a significant ef-fort designed to curtail a growing operating budget, I reaffirm my prior statements to you that this is a one-time adjustment. Attempting to further reduce our operating costs will necessitate the elimination of one or more services currently being provided.''
During a discussion of the quarter-cent fire sales tax at a work session before the April 22 board meeting, Ward 2 Alderman Gary Vincent asked what would happen if the quarter-cent sales tax was placed on the ballot and rejected by voters.
Greer said, "The only thing we really have (left) to cut is police and fire. Those are general-fund dependent. I don't think I have any room left in any other operation.''
Of the fire sales tax, Greer wrote in his memo, "The popularity of this form of taxation to support local fire services has been widely adopted by a number of municipalities in St. Louis County since it became available.''
Since 2001 in St. Louis County, eight of the 19 municipalities that are eligible to collect the tax have sought and received voter approval to do so. Among those municipalities collecting the quarter-cent sales tax, which is not subject to any redistribution or sharing provisions, are Brent-wood, Richmond Heights, Maplewood, Rock Hill and Olivette.
In his memorandum, Greer noted that voter approval of the quarter-cent sales fire tax would make Crestwood's increased tax rate of 7.575 percent "consistent with other regional retail-dependent municipalities such as Brentwood and Richmond Heights.''
Greer wrote, "Voter approval of the quarter-cent fire sales tax would enable the city to capture about 38 percent of the current cost of providing municipal fire services. I have indicated to you that the obvious benefit for receiving this revenue is to offset costs associated with these services for the benefit of the general fund, from which all these costs are currently expended.''
Since the Ways and Means Committee began meeting in January, Greer has stressed the need to build a cash reserve of $1.5 million to $2 million in the city's general fund, which has been called "depleted'' by the mayor.
Based on projections prepared by the director of finance, voter approval of the quarter-cent fire sales tax would place the city "... in a position to build the necessary cash reserves in the general fund to an ac-ceptable level over a three-year period,'' the city administrator stated in his memorandum.
"Given our current financial status, I consider that to be a reasonable time frame. In addition, this revenue would enable us to establish a capital replacement budget within the general fund — an expense budget that would give us the ability to appropriately plan for the replacement of vehicles and equipment related to operations such as police and fire, government center; essentially all those not related to our streets program or parks,'' Greer wrote in the memo.