Politics & Government

Hazelwood City Council Hears First Reading of the 2011-12 Fiscal Year Budget

City manager Edwin Carlstrom presented the council a version of the proposed budget at the June 1 Hazelwood City Council meeting. The budget features a pay increase for some city employees, and a new pay plan, among other things.

Hazelwood City Council heard first reading of the 2011-12 fiscal year budget at Wednesday’s meeting. The council didn’t ask too much during Hazelwood city manager Edwin Carlstrom’s presentation.

There was a fairly full room of residents present during the meeting. Carlstrom said he felt the 2011-2012 fiscal year budget is conservative while “continuing to provide an excellent level of service to the city’s residents and businesses.”

The overarching theme of Carlstrom’s budget presentation was conservation. There were also quite a few mentions of this budget being similar to the 2008-2009 fiscal year budget.

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“We’ve had a lot of synergy in trying to create a financial plan for the City of Hazelwood,” Carlstrom said. “(The national economy), it’s slow and unpredictable. I will say it has improved, but it’s not going to snapback if we have another recession.”

Overall, the budget’s:

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  • Combined general, economic development and capital improvement funds revenues are estimated at $31.6 million with the largest source being sales and use taxes.
  • Combined fund expenditures are estimated at $33.2 million, resulting in a reduction of approximately $213,000 to the unrestricted fund balance.
  • With efficiency enhancements made wherever possible, according to Carlstrom, the cost of fiscal year 2011-2012 operations are estimated at 3 percent more than the fiscal year 2008-2009 actual cost.
  • Carlstrom noted there have been no increases to update the employee pay plan since July 1, 2008, employee step increases were not given during the previous fiscal year, and staffing was reduced through attrition whenever appropriate.
  • Sales and use tax revenues are projected to increase 2-percent for this budget year.
  • Property tax, which is at the maximum levy, is expected to decline two percent or $97,000 due to a decrease in total assessed valuation for St. Louis County.
  • Carlstrom noted with a total assessed valuation of $575 million, the City of Hazelwood climbed from a #12 ranking last year and is now ranked #11 in St. Louis County.
  • Preliminary re-assessments show a 1.9-percent overall decrease since 2009 with residential property down 7.1-percent, commercial property down 1.3-percent and personal property up 1.1-percent.

Carlstrom also touched on the property tax in the annexed area of Hazelwood. He said fire district rates are higher by a ratio of 2.4 to 1. Therefore, the city realizes a net gain due to the decrease in assessed valuation for the annexed area and a corresponding reduction in the fire district fees the city must pay.

“He then discussed fire district service fees which increased 10 percent in 2009, five percent in 2010, three percent in 2011, and are expected to increase four percent in 2012. He stated a one time $850,000 refund of prior years’ fees was split across fiscal years 2010 and 2011 and represented a major contribution to the General Fund balance.”

In terms of the general fund, Carlstrom said its expenditures are estimated at $24 million, and represent a 5.8-percent increase versus the 2010-2011 fiscal year. He noted various expenditures have been suppressed for the past two years and unsustainable cuts have been restored including employee merit/step increases, an update of the employee pay plan to market, training and travel, and a part-time police records clerk to fill the previously vacant full-time clerk position.

He stated revenue has been calculated to “catch up”; however, the situation will be closely monitored and spending adjustments will be swiftly implemented if necessary.

What is the #1 cost in the general fund budget? Salaries according to Carlstrom, which he said is about $15.3 million this fiscal year and represents 64-percent of the budget.

He stated implementation of the employee market pay plan to 97.5 percent of average market salaries is recommended at a cost of $273,000. In addition, the cost to reinstate merit/step increases will be $50,000.

Carlstrom emphasized that no employee’s current pay will be reduced; however union representatives for various city departments that were present during the meeting were not very pleased with the pay plan.

Carlstrom also said the pay plan for part-time employees will also be updated. Currently the City of Hazelwood’s staffing includes 180 full-time positions and part time positions with a 34.77 full-time equivalent.

Carlstrom also said there was a budget surplus in 2011 of $864,000 due to one time payments of use tax, cell phone litigation settlements and a refund of prior years’ fire district fees.

At the end of fiscal year 2010-2011, the estimated general fund balance is $5.7 million. With a shortfall of $213,000 in the proposed fiscal year 2012 budget, the reserve fund balance at the end of fiscal year 2012 is estimated at $5.49 million which represents approximately 23-percent of revenue.

Carlstrom said the reserve provides a safety net and the goal is to reach 25 percent of revenue. Carlstrom also said the city’s economic development fund revenues are estimated at $5.1 million and expenditures at $6.3 million. With a beginning fund balance of $3.2 million, the balance at the end of fiscal year 2011-2012 will be $1.9 million.

Economic development projects planned for the fiscal year include:

  • An incentive program
  • The Missouri Bottom Road project
  • The Hazelwood Avenue White Topping project
  • The Utz-Tesson House renovation
  • The Fee Fee Road South and North projects
  • The aquatic center
  • The Hazelwood Sports Complex
  • Corridor enhancements

Carlstrom said the capital improvement fund revenues are estimated at $2.7 million and expenditures at $2.9 million. With a beginning balance of $367,000, the ending fund balance is estimated at $197,000.

He stated a low balance in this fund is optimal because it shows the full force of the capital improvement sales tax has been invested in the community.

Carlstrom said the 2011-2012 capital improvement sales tax is expected to be down 9-percent from 2008-2009 fiscal year, and existing debt requires 78-percent of the tax. To mitigate this situation, the minimum for capital improvement projects will be increased from $5,000 to $20,000 as it was prior to 2005. Capital improvement projects include:

  • Concrete replacement
  • A chipper purchase
  • Asphalt overlay of Airshire Place
  • The purchase of mowers and police vehicles
  • A matching contribution to a grant for a dog park
  • Musick Park Sprayground reconstruction
  • Implementation of the Safe Routes to Schools program

Carlstrom also discussed the sewer lateral fund revenues, which are estimated at $40,000 and expenditures at $83,000. With a beginning fund balance of $596,000, the estimated fund balance at the end of fiscal year 2012 is $553,000.  

He said no increase from the current $5 sewer lateral service line repair fee is recommended at this time. He noted the fee was originally $28 in 2001 and may need to be increased some time in the future as the community ages.

The budget is viewable to residents at Hazelwood City Hall.


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