CITY BUDGET SHRINKS BY 3 PERCENT

Contrary to popular opinion, government doesn't always expand.

Through a number of personnel changes and a reduced capital improvements plan, Cape Girardeau's proposed budget for the 1992-93 fiscal year is 3 percent smaller than the current budget.

The city council tonight will study the budget, but won't take any action on the document until next month, prior to the start of the 1992-93 fiscal year July 1.

Assistant City Manager Al Stoverink said that although the proposed budget will be smaller, the city will not cut any programs or services in the coming year.

"It does not reflect any growth in services, and the number of personnel is down," Stoverink said. "Total personnel in this budget is less than what was on the payroll five years ago.

"So there's been a lot of cost containment that's gone into it. You'd certainly have to say it's a tight budget."

Stoverink said a new emphasis on user fees that reflect costs associated with city services has helped the city to further tighten the budget. That has allowed the city to avoid seeking more drastic revenue-producing measures such as increased tax levies.

"There's a lot of focus on individual programs and user fees, and I would say the budget reflects a city that's still in very sound financial condition despite the lackluster performance of our key revenue sources and despite the recession," he said.

Slumping sales tax receipts during the past year prompted city officials to completely re-evaluate a number of program areas to seek ways to cut costs.

Personnel cuts and reorganization, along with cuts in the five-year capital improvements plan are reflected in the smaller city budget.

The staff reorganization alone is expected to reduce costs about $200,000, and the capital improvements budget this year was reduced about $10 million over five years. Aside from those projects budgeted for the coming year, financing for a much of the plan remains in question.

The assistant city manager said that short of an economic recovery to spur sales tax growth, the city will have to consider other ways to increase revenues.

He said that in the future, as the city tries to replace aging equipment and meet the growing service demands of new streets, sewers, recreational facilities, and increased population, residents likely will have to face some type of tax increase.

"But we don't see the need for any major tax increases now," Stoverink said. "We're optimistic that we'll have an economic rebound that will help us in the future.

"There will have to be small adjustments here and there. And more reliance on user fees."

In the proposed budget, the staff is recommending a possible increase of 3 cents in the city's property tax. The increase will depend on the city's assessed valuation. The 3-cent increase would generate about $75,000, he said.

Under the Hancock Amendment and Missouri assessment statutes, the city is allowed to increase the property tax levy as much as the Consumer Price Index (CPI).

"We can't raise it such that we would raise more revenue than the CPI," Stoverink said. "In fact, we would have to lower the rate if growth exceeded the CPI."

Stoverink said the city could have raised the tax a few cents in the past, but chose to leave it alone a policy he thinks ought to change.

He said the city now has to consider all available revenue resources, particularly in light of the recession and flat sales tax revenues.

"One of the more significant general aspects of this budget is recognition of the fact that we can't keep pace with inflationary cost increases and growth in the service needs of a growing community just based on the economic growth of our tax base," he said.

Another key to maintaining the city's sound financial condition is to insure the city's utilities are operated on "break-even basis," Stoverink said.

He also said the city council this year is more involved in the drafting of the budget than in past years, so that the proposed budget could be revised.

"We have tried to, and are expecting to, involve the council more in some of the fundamental budget decisions," he said. "What we've tried to do with this budget is set the stage; to give the council information that will help them make their decision on what ultimately is adopted."