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Chesterfield earmarks $1.5 million for debt service 

By: Jim Erickson

Faced with uncertainties about future sales tax receipts used for paying off previously issued bonds, the Chesterfield City Council has earmarked $1.5 million from general fund reserves to add to its debt service account in its 2018 budget.

The action came after a lengthy discussion at a Nov. 6 meeting of the council’s Finance and Administration Committee of the whole, meaning all councilmembers participated.

The $1.5 million represented a compromise between differing suggestions on how much should be set aside for bolstering funds available for debt service. The discussion had included amounts ranging from approximately $1 million to $2 million.

Although Proposition P approved by voters in St. Louis County earlier this year will boost total sales tax receipts in 2018, the additional income will go primarily for law enforcement needs. At the same time, revenues from specific sales tax levies for capital improvements and parks are expected to dip in coming years; however, the amount needed to retire debt from previous bond sales to finance city hall construction and for improvements to the city’s parks system will increase.

The latest data on sales tax revenues show the downward trend continuing and has led the city to lower 2018 budget projections on what it expects to receive from that source.

An unknown in the financial scenario is the outcome of Chesterfield’s still-pending lawsuit challenging the legality of how sales tax revenues are distributed to St. Louis County communities. Passage of a bill in the state legislature last year has modified that system somewhat but Chesterfield businesses still generate much more sales tax revenue than what the city actually receives under the county formula.

No matter how the lawsuit is decided, the outcome will be “a game changer,” predicted City Administrator Mike Geisel. Until a decision is made, Chesterfield can make its financial plans only on the basis of what is known now.

Council policy calls for maintaining general fund reserves at 40 percent of expenditures from that fund. Moving $1.5 million to the debt service account is not expected to put that financial cushion in jeopardy because the reserve has been running well above the council’s policy goal.

Final action on the 2018 budget is expected in December but councilmembers already have given tentative approval to a number of items contained in the document. Among those decisions are:

  • A merit increase pool for non-uniformed city employees equal to 2.5 percent of overall payroll. There was no merit increase pool in the 2017 budget.
  • Approval of an interim agreement with the Chesterfield Police Officers Association/ Fraternal Order of Police Lodge 15 calling for pay hikes ranging from $1,500 to $5,000 for non-probationary police officers and sergeants.
  • Reduction in expenditures for advertising and communications.
  • Elimination of $27,000 for replacing conference room chairs, $10,000 for the annual economic development summit, and $15,000 for the 2018 public art competition, with the idea the program will be continued on an every-other-year basis.
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