YOUR BUSINESS AUTHORITY

Springfield, MO

Log in Subscribe

Council sets fiscal 2012 budget increase of 5%

Posted online
Springfield City Council unanimously approved a $297 million fiscal 2012 budget during its June 13 meeting. While factors including higher city sales tax collections point to a gradual economic recovery, officials emphasized prudence in the budget that is 4.8 percent greater than the $283 million allocated in fiscal 2011.

“We’re being cautious about the budget, even though revenues are increasing,” City Manager Greg Burris told council.

Springfield’s fiscal 2011 sales tax revenues were positive for the first time in three years, he said, noting the 2.3 percent increase compared to the previous year.

With $36.2 million in 2011 sales tax revenues, collections surpassed the city’s 1.7 percent projected increase, which was determined late last year to formulate the fiscal 2012 budget. The city’s last budget was built around a prediction of flat sales tax revenues.

Sales-and-use taxes are expected to account for more than a third of the city’s budget resources.

That increase in funding will allow Springfield to fill 12 of 84 positions that were previously frozen by budget cuts.

Some approved job hirings are in Human Resources, which Burris said has been under “tremendous strain” because of fully staffed Police and Fire departments and the creation of a new Department of Environmental Services, which will split off from Public Works. Other approved hirings include an assistant fire chief position in the training division of the Fire Department, a position linked to firefighter safety and thus a high priority, according to Burris’ memo attached to the bill and posted online.

“We were very, very selective” in choosing the positions to unfreeze, Burris told council.

The additional funding also would flow toward high-priority, one-time expenses including several police vehicles, according to a letter Burris attached to the budget proposal. Burris said council also added funding for local animal rescue organizations, what he called essentially a per-rescue subsidy, and funding to the air quality control program.

Burris said more positions might be filled if the city feels comfortable later in the fiscal year. His budget proposal included an additional 1.7 percent increase in sales tax during the next 12 months.

Bond purchase agreement
Council also unanimously passed a bill authorizing a Standby Bond Purchase Agreement with the Bank of Kansas City, a subsidiary of the Bank of Oklahoma.

In 2003, the city issued nearly $8 million in bonds for improvements of the University Plaza Hotel and Convention Center. About $5.64 million of those bonds remain outstanding.

When a bondholder gives or “puts” a bond back to Springfield, that bond is generally remarketed to another holder. Under a standby purchase agreement, a bank agrees to buy that bond if it can’t be sold, said Collin Quigley, assistant city manager.

“The bank would step in with the initial funding to essentially refund those bonds,” Quigley said. “It’s kind of a backstop to make sure there’s a funding source.”

City officials said that scenario was not likely. Previously, Bank of America filled this role for the city, but the bank did not bid to renew the agreement.

Finance Department officials have compared the arrangement between the city and University Plaza Hotel owner JQH Hotels Inc. to cosigning a mortgage, with the city basically lending its credit to the bonds. The move is anticipated to cost JQH Hotels approximately $85,000 per year.

Springfield Finance Director Mary Mannix Decker told Springfield Business Journal in April that the Bank of Kansas City was the only bank to step forward with an offer.

Budget-related bills
City council will consider additional bills related to the budget at its next meeting, including allowing Burris or a designee to approve the operating budget for the Springfield Convention and Visitors Bureau and the Greater Springfield Area Sports Commission.

“They’re not part of the city per se,” Burris said in an interview. “They are, however, receiving some of the hotel-motel tax revenue.”

The visitors bureau works to encourage tourism and other events for the city, while the CVB-managed sports commission receives funding for its efforts in bringing sporting events to Springfield.

Amendments and clarifications to the city salary ordinance, which applies to public employees, also are likely to come to a vote at the June 27 meeting.[[In-content Ad]]

Comments

No comments on this story |
Please log in to add your comment
Editors' Pick
Open for Business: Rebar Kitchen & Taproom

A pair of food industry veterans teamed up to open Rebar Kitchen & Taproom; May 2 marked the grand opening for the new headquarters of 27North Inc.; and the first brick-and-mortar shop for Springfield Trading Co. launched.

Most Read
Update cookies preferences