Overall, the city’s financial condition is still considered to be “fragile.” Compliance with the consent decree is still years away and costs towards the decree are expected to cost an additional $300,000 in out-of-pocket in monitoring expenses. The COVID-19 pandemic affected all the current 2020/21 fiscal period. $1.4 million in CARES Act funds were received by the city, half of which was used to remove the 10% wage furlough that had initially been budgeted at the beginning of the fiscal year for city staff as an alternative to potential staff layoffs. An additional $3.8 million from the American Rescue Plan Act is expected to be received in fiscal 2022, but guidance is still awaited on how these funds will be allowed to be spent and they are not included in the budget at this time. It is anticipated that these additional federal funds will offset revenue reductions occurring due to the pandemic. Municipal courts are still not allowed to hold in-person court sessions. Although sessions have been held via video conferencing, revenue from fines was down significantly in fiscal 2021 and it is not known when in-person sessions will resume during fiscal 2022.
The additional funding from CARES has been a game changer. The initial outlook for fiscal 2021 projected a negative change in the fund balance of about half a million. With the federal aid, it is now anticipated that there will be a surplus of revenue over expenditures in fiscal 2021 of approximately $2.8 million.
Reviewing the budget can be dull, tedious work, but understanding how the budget is set up and laid out is of importance to every informed citizen. This is especially true at a time when a Petition for State Audit is moving forward for the city. For those new to understanding the city’s budget and funding, this article provides a basic guide.
The fiscal year for the city begins on July 1st and ends on June 30th of each year. The coming “fiscal 2022” year extends from July 1, 2021 through June 30, 2022. The city council holds special meetings annually, usually in May, to review the current year’s budget and forecast (the expected end of year spending or revenue) and hear presentations by the city staff for their budget requests for the coming year. You can view each of those three special council meetings for the budget at these links: May 12, May 14, and May 18.
A hefty budget review binder of nearly 500 pages accompanies these work sessions and is made available here. Previous years are also available online. State law guides much of what is required to be presented and included in a municipal budget. The information in this binder is also audited by an external company hired by the city prior to review by the council. This is the tenth year an electronic “binder” has been used. Although no longer physically assembled, sections are still sometimes referred to as “tabs.”
The budget is made up of different “pots” of money, and many of the “pots” can only legally be used for certain purposes. For instance, revenues raised from certain specific taxes are required to be spent only on those items allowed by legal statute. Often, these are taxes approved by voters. However, some transfers can be made among special funds if they meet the legally required purpose of spending the money.
The largest of these “pots” of funds are the General Fund. This fund has multiple divisions which roughly reflect the departmental structure of the city. The reporting divisions within this fund are: City Council and Clerk, Administration, Finance, Public Safety (Court, Police, Fire and Code Enforcement), and Public Works. Except for grant funding dedicated for specific spending, money can be moved from any division to another with a vote of the council.
After the General Fund, there are five special revenue funds that each have their own “pot,” often with dedicated funding sources. These are:
The Parks Fund receives revenues dedicated to parks and raises revenue through things such as fees and concessions. An increase in fiscal 2022 is anticipated with the relaxing of pandemic restrictions. The pool is planned to reopen, and more activities are to be scheduled at the Community Center. As programming increases, so will expenditures. For 2022, a negative balance of funds of about half a million is anticipated, largely in result of limitations in programming due to the pandemic.
The Economic Development Sales Tax (EDST) Fund was created by a proposition approved by voters in April 2016. The city began collecting taxes for this fund in October 2016. Collection of funds is recorded in the EDST fund and the balance is reported in the Downtown TIF (DTTIF) Fund. (TIF is Tax Increment Financing used to encourage new development. Read more here.) Proceeds are to be used on revenue eligible projects and costs to provide administrative support for these projects.
The Ferguson Special Business District (FSBD) Fund raises money from the collection of FSBD business license fees assessed on businesses within the designated business district centered on the downtown. FSBD was once had oversight of the Farmers Market, but the two are now separate funds.
The Farmers Market Fund receives funds from a transfer from the Downtown TIF (DTTIF) Fund. The city currently holds a contract with Tower Grove Farmer’s Market for the management of the market. This contract expires in fiscal 2022 and the city will need to determine whether it should be extended or if a stipend should be paid to the person managing the market.
Sewer Lateral Fund is funded as a property tax. The fund continues to accrue more than is used and needs to be better utilized. Funds are used for repair of sewer lateral lines. For homeowners needing sewer line repair work this fund covers a significant amount of the cost by working with the city to pursue the repairs.
The city also has three funds for Debt Service. One, the Halls Ferry TIF Debt Service, was closed in the current fiscal 2021. The others are the Certificates of Participation (COPS) Fund, to be paid off in 2023 and 2035, and the General Obligation Bond Fund, which is fully funded and has a reserve.
There are two Capital Projects Funds. The Capital Improvements Sales Tax (CIST) Fund includes debt thatwas moved from COPS to CIST in 2017 with a new financial arrangement that allowed for the purchase of a new fire truck in fiscal 2020. An additional amount is being transferred from EDST to pay the city’s share for two projects within this fund planned in fiscal 2022 with the federally funded Surface Transportation Projects fund for Florissant Rd. and Frost Ave. The other fund, the Downtown TIF district was established in 2002 for the purpose of promoting development within the district.
Overwhelmingly, the binder consists of financial statements and tables. The first is the Combining Statements found on Page 10. This one-page chart is an at-a-glance look at the budget with each of those “pots” of funds in a column. Do note that figures on this page are reported by rounding to the nearest thousand dollars. As such, the figure “24” stands for $24,000. Negative figures are shown in red and inside parentheses. This is followed by another one-page report giving a breakdown of personnel numbers within their department and according to their fund and gives totals for the past two fiscal years, the current fiscal, and the project 2022 fiscal year.
Beginning with the expenditures summary section, tables in the binder show the actual budgets for the previous fiscals 2019 and 2020, then show both the budget and forecasted end of 2021 (the fiscal year now still in progress) and then the budget requested for 2022. Keep in mind that this is the draft budget, and council has already made some changes to what is seen in this binder. There is another review in August when fiscal 2021 reporting is complete, and a better picture is in place for the new fiscal 2022. And too, the council can vote at any time to amend the budget as needed even past that review.
Once past tables demonstrating changes from fiscal to fiscal year, the real detail begins. Starting on page 44 and on through page 400, each individual division provides an accounting for each department’s budget with detail.
On page 405, the monotony is broken with the budget for capital improvements plans for spending. The proposed improvements range from the West Florissant Community Park to new vehicles, to video surveillance systems. With one final section on budget transfers, the whole binder comes to an end at last on page 438.