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Politics & Government

City of Clayton Solicited Businesses' Input On The Budget

Craig Owens, the city manager, asked businesses for suggestions on reconciling a budget where expenses exceed revenues.

At the first of three community interactive forums to discuss the City of Clayton’s budget, members of the business community met at The Center of Clayton to learn about budgetary challenges. City Manager Craig Owens said the purpose of the meetings is to give out information that may be new to the public and to listen to the ideas of the attendees.

On Monday afternoon, Owens explained to over 35 business representatives the details of the city’s expenditures compared to its revenues.

“The city is operating with an annual $2.5 million deficit, $1 million of which is debt service,” Owens said. “By 2017 the city will hit 33% of its fund balance, or its reserves.” According to the city’s fund balance policy, at minimum it must maintain 25% of projected annual expenditures.

Owens reviewed the services that are provided by the city and the sources of revenue.

“The top three revenue sources are property, utility and sales taxes,” Owens said. “Since a lot our services are delivered by people the biggest expenditure is human resources.”

None of the expenses show any dramatic movement in terms of trending one way or another. However, expenditures are higher than revenues.

Owens said policy considerations to solve the budget problem include:

  • Cutting services.
  • Increasing revenues by growing the base and/or increasing the tax rate.
  • Drawing down the reserves.

According to the results of a citizens’ survey, the majority of responders said they were not supportive of cutting services. The survey also revealed that 92—97 percent of the citizens are satisfied with the city’s quality of life, public safety services, parks and recreation programs and services, appearance of city, streets and public spaces and city services.

Based on a comparison of commercial tax rates of other St. Louis County cities, Clayton is in the bottom third of lowest tax rates. Some of the cities with higher commercial tax rates include Creve Coeur, Chesterfield, Maryland Heights, Maplewood and University City.

After presenting the city’s financial situation, Owens opened the meeting for questions from the attendees.

One businessperson asked about the option of cutting expenses instead of suggesting cutting services.

“We can always become more efficient. We used benchmarks with other comparable cities in the country to make sure there were no outliers with our expenses,” Owens said. “We have greater economies of scale than other cities so we can do more for less.”

Another participant suggested that while no one wants to cut services, if the city developed a concrete proposal to balance revenues and expenses then officials might get better feedback from the community. Owens replied that the purpose of the forums was to do just that.

Marc Lopata, president of Clayton-based Microgrid Energy, is concerned that the city may not be trying to eek out all of the efficiencies it can.

“For example, why do our police need SUVs? Why can’t they drive a Prius?” Lopata asked. “Why can’t we use more fuel-efficient vehicles? It’s not like there’s one big line item that we need to get rid of to reduce expenses. It’s going to take a lot of small things to make a big impact.”

The forum participants offered these other suggestions for the city: promoting Clayton to differentiate it from other municipalities; charging users for specific services; cutting expenses and salaries to avoid raising taxes (fearing that will make the city non-competitive); growing the economic base and dealing with the perception that the city is a ghost town in the evenings and on weekends.

Owens said he wanted to find out what people had to say and what ideas they might have to resolve the budget problems.

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