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After much debate, U. City Council passes budget
(by Jenny Fisher - June 10, 2009)
The University City Council voted to go ahead with a $1 million buyout of 26 flood-prone homes on Wilson Avenue at a meeting June 1. The council also passed the city’s 2010 budget and approved a quarter-cent sales tax ballot issue.
At council member Terry Crow’s suggestion, the council bundled the budget, the Wilson buyout and the sales tax into one resolution that was approved with four council members in favor and two against. Council members L. Michael Glickert and Lynn Ricci voted against the resolution, and Mayor Joseph Adams was absent.
“These are extraordinary fiscal times for U. City, as for the rest of the world,” council member Robert Wagner wrote in a e-mail after the meeting. “We have not seen such economic distress in my 23 years on the council. Revenues are significantly down (mainly sales taxes) and required service expenditures (such as police and firefighting) are significantly up.”
The vote on the Wilson Avenue buyout came after weeks of discussion by council members and protests by homeowners on the street, who were told in early 2009 that the city planned to buy up homes in the area of the most severe River Des Peres flooding in University City.
The State Emergency Management Agency would pay for the bulk of the buyout by providing $3 million while the city would chip in $1 million. But after City Manager Julie Feier presented the council with a budget with a $1.3 million deficit earlier this year, the buyout appeared to be up in the air.
The budget passed on June 1 now includes a surplus of $41,261. The deficit is made up for in part by $240,000 the city assumes the increased sales tax would generate if it passes, as well as an estimated $125,000 from a program that would require rental owners to register their properties and pay a fee to do so.
The city estimates it will save $105,000 by joining a medical insurance consortium with other nearby cities. Another $525,000 was reduced from the original budget by allocating money for new fire pumpers to a proposed property tax bond issue.
And $100,000 from a yearly economic development sales tax was reallocated to fund city operations. The economic development sales tax brings in about $570,000 a year for the city and was created to fund projects along Olive Boulevard and in the Delmar Loop.
Council member Ricci, one of the two who voted against the resolution combining the three items, said the budget was unacceptable to her because of how money was allocated from the economic development tax fund and because the city did not institute salary freezes or cut more positions this year to save money.
Ricci said she believed that legally, the money from the economic development tax has to be used strictly for development on Olive and in the Loop. She cited Missouri statute 67-1305, which outlines how the economic development sales tax money can be used. The statute reads: “No revenue generated by the tax authorized in this section shall be used for any retail development project, except for the redevelopment of downtown areas and historic districts. Not more than 25 percent of the revenue generated shall be used annually for administrative purposes, including staff and facility costs.”
“They have taken that out of context and said they can take out however much they want, and use it for general operating, not for development,” Ricci said.
But other council members disagreed. “My understanding, in agreement with our city attorney John Mulligan, is that the state legislation enabling the economic development sales tax states explicitly that municipalities recover administrative expenses up to 25 percent of the revenue generated,” Wagner wrote in an e-mail. “I don’t consider this as applying the tax revenues to ‘general operations’ but for professional tasks to implement recommended projects. These services are real and necessary steps such as planning, bidding, awarding, contracting and engineering oversight to assure that specifications are met.”
Feier said the city had spoken to the state auditor and to the people on the original tax commission, in addition to obtaining the opinion of the city attorney. The money, she says, will cover “administrative costs, like salaries and office overhead” in the community development department.
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