Crestwood may weigh hikes in merchant fees, utility taxes
August 24, 2005 - Crestwood voters could consider increasing the city's merchant license fees and the city's tax on utility gross receipts in the Nov. 8 election.
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During a Saturday morning work session, Board of Aldermen President Tim Trueblood of Ward 2 asked to have ordinances placing the measures on the Nov. 8 ballot added to the board's agenda for its regularly scheduled meeting this week.
The Board of Aldermen was scheduled to meet Tuesday night — after the Call went to press. The deadline to place propositions on the November ballot is 5 p.m. Tuesday, Aug. 30.
Saturday's work session was called by board members to discuss current and future levels of public safety provided by the city. Mayor Roy Robinson opened the work session by noting it was called by aldermen and that he was "on record as opposed to any reductions of both the Fire and Police departments ...''
In June, City Administrator Don Greer had proposed roughly $1 million in reductions to stabilize the city's fiscal woes, including cutting six Police Department employees and four Fire Department employees.
In a June 12 memorandum to aldermen, Greer said the cuts in public safety-employees would be accomplished "exclusively through attrition.'' But that would not be the case with proposed staff reductions in other areas, including parks and recreation, according to the memorandum.
Part of Greer's restructuring plan included increasing the benefit level for employee pensions to encourage retirements for a two-year period. The city participates in the Missouri Local Government Employ-ees Retirement System, or LAGERS.
But Ward 3 Alderman Jerry Miguel had voiced concerns about the long-term cost to the city, saying the increase in benefits could increase the annual costs of the pension plan by $400,000 annually and the unfunded liability of the pension plan by $3.7 million.
During Saturday's work session, Miguel referenced Greer's proposed restructuring several times, saying he believes that $1 million needs to be cut from the city's budget each year for the next five years.
Robinson and Greer, however, said the restructuring plan would not work without the retirement incentive because without that incentive, personnel cuts could only encompass bottom-level employees — patrol officers and firefighters — which would impact the quality of the public safety services the city currently provides.
At one point, the mayor said, "... Our city is here for one thing only and that's to provide services to our community. We don't have any other purpose and the main thing is our safety. Without the safety aspect, we are no longer a city.''
Ward 1 Alderman Richard Breeding later said, "... No one on this board wants to cut public safety. No one wants to do that be-cause you (Robinson) were right. That's what we're here for. No one wants to do a lot of the things we're talking about. But wanting to and having to is really what we should be discussing. That's what we should be discussing. Should we cut these great services and what number do you need to be at? So if there's a number that we need to be at, then I think we take this discussion that way.''
A lot of "passion'' exists for public safety, he said, "And there should be. But there's also lots of passion about not being broke and where do you draw the line?''
At one point, Ward 2 Alderman Jim Kel-leher noted that the board at the beginning of the year was aware of the city's financial problems and placed a general obligation bond issue on the April ballot. Voters defeated the proposal.
"... We were told that if that did not pass, there would have to be significant cuts. Has anything changed from the beginning of the year until now?'' he asked Greer.
Greer replied that nothing has changed since then.
"The question with regard to improving the general fund really depends upon the time frame under which the board wishes to get out from under a line of credit ... If there isn't a significant reduction in our expenses or an increase in our revenue or both, the ability to get out from the under the line of credit does not occur in the foreseeable future,'' he said.
Since the fall of 2003, the city has had a line of credit with Southwest Bank to meet cash-flow needs. That line of credit now stands at $2 million.
In a June 23 letter, Southwest Bank Assis-tant Vice President Mark C. Niemeyer wrote, "With the bond issue failing to pass this April, the city currently lacks a de-fined plan of action to make marked im-provement in its overall financial position.
"Please understand that Southwest Bank values the relationship we have with the city of Crestwood, however, when it comes time to begin the renewal process on the city's line of credit later this summer, it will be imperative that the city provides a concrete plan of action to improve the current financial situation,'' he wrote.
As part of that plan, aldermen discussed having voters consider approving an in-crease in the city's merchant license fee, which currently is $1 per $1,000 in gross receipts, and an increase in the tax on utility gross receipts, such as cable television, telephone, electric, water and gas, for residential and business customers.
Robinson advocated placing such measures before voters, noting the impact — except for cable television — to residents would be minimal.
"I can't see why the voters wouldn't do it because it's — we don't, I mean we don't want to put any additional burden on our business community. However, we have a financial problem and one of the things we can do is bring them in line with surrounding cities. We're not asking too much, but we're asking enough to help us at this time,'' he said.
Trueblood at several previous work sessions has advocated placing such increases before voters and did so again Saturday.
He asked that the items be placed on Tuesday night's board agenda for aldermen's consideration.
He also suggested placing non-binding referendums on the November ballot on whether the city should contract for police and fire services — a proposal that received a lukewarm response from other aldermen. Nonetheless, ordinances for the non-binding referendums also were scheduled to be considered Tuesday night by the Board of Aldermen.
At the end of the work session, several speakers opposed cutting police and fire personnel.
One speaker, Kurt Becker, 4th District vice president of Local 2655 of the Inter-national Association of Fire Firefighters, pledged his organization's support in helping obtain voter approval of any revenue-generating measure the board may place on the November ballot.