The new municipal budget approved by the Festus City Council on Sept. 28 projects a surplus – assuming the proposed CRG data center development project comes to be.
The new budget for fiscal year 2027 (FY2027) projects $54,784,982 in total revenues and $53,686,107 in total expenditures. The city’s fiscal year runs from Oct. 1 to Sept. 30 annually.
“If you remove the $18.56 million in interfund transfers, the budget reflects approximately $36.3 million in revenues and $35.1 million in expenditures,” City Administrator Ben DeClue said.
The Festus FY26 budget approved in September 2025 projected revenues of $36.3 million and expenditures of $38.6 million. DeClue said his staff has only just begun its “year-end closing,” so he does not yet have actual FY26 finishing figures.
Council members voted 6-0 to approve the city’s FY27 budget. Councilman Dave Boyer did not attend, and a Ward 2 council seat remains open.
CRG, which is the St. Louis-based data center development arm for Clayco, announced in late 2025 its plans to develop a hyperscale data center on 361 acres north of Hwy. 67 and west of Hwy. CC. CRG has estimated the cost of developing the facility at $6 billion. In the Festus project, CRG would develop the property, and then a data center company would operate it, although no operator has yet been identified.
Soon after the data center project was made public, the matter became a major source of controversy in Festus, including protests and the filing of lawsuits to stop the project.
On March 30, the City Council approved in a 6-2 vote a data center development agreement with CRG. Council members (as the council consisted at that time) voting for the agreement were Boyer and Jim Collier of Ward 1, Bobby Venz and Kevin Dennis of Ward 3, and Jim Tinnin and Mike Cook of Ward 4. Those voting against were Brian Wehner and Staci Templeton, both of Ward 2.
It is the data center development agreement, referred to as Community Benefit Agreement in budget information supplied by staff, which looks to put the FY27 budget in the black, DeClue said. According to this agreement, the developer will pay Festus community benefit payments of up to $5 million to fund a new firehouse, with the developer also to pay the city approximately $40 million in payments of $3 million in years one through five and payments of $5 million in years six through 10 of the agreement.
“The city has received $100,000 from CRG under the initial agreement, which has been used for legal and other professional services associated with the data center project,” DeClue said “At our last council meeting, the city (entered) into an agreement with Burns & McDonnell for $140,000 to begin engineering design work on the city’s water distribution system. Under the Community Benefit Agreement, an additional $400,000 is available for engineering-related costs, which are reimbursed by CRG after the city submits the appropriate documentation requesting reimbursement.
“The next major payment to the city is an $8.5 million lump-sum payment associated with CRG’s submission of its building (plans). Of that amount, $5 million is designated for the design and construction of firehouse No. 2. The remaining funds are available for the city’s use on any other project it deems appropriate, such as the additional building inspector and vehicle, and six additional firefighters to staff the new firehouse until additional tax dollars from the project begin to come in.”
If the deal between CRG and Festus were to fall through for any reason, the city’s financial picture in FY27 would be greatly altered, DeClue said.
“If the data center project does not move forward or the anticipated CBA funding is not received, the city will place a hold those projects and expenditures utilizing that money until a new funding source can be identified,” he said. “For example, the $5 million firehouse No. 2 project is tied directly to the CBA funding, and the six additional firefighter positions are contingent upon the station proceeding. The adopted budget specifically recognizes that the construction of the firehouse and the hiring of those additional firefighters will only happen if the necessary funding is realized.”
The municipal FY27 budget projects the city to finish with reserves funds of $13.2 million, or at 63 percent, he said.
“This represents the projected combined ending reserves of the General Fund, Police/Public Safety Fund and Fire Fund at Sept. 30, 2027,” he said. “The 63 percent represents approximately eight months of operating expenditures. The city’s adopted reserve policy establishes a minimum of 39 percent, or $8.15 million.”
He said employee raises are included in the new budget.
“The FY27 budget provides a $1-per-hour wage adjustment for full-time employees and $.50 per hour for part-time employees, effective Oct. 1 (2026),” DeClue said. “The total budgeted cost of the wage adjustment, including the applicable payroll-related costs, is approximately $337,996. Council selected this approach rather than a 3 percent across-the-board increase.
“Total payroll and benefits increase by approximately $1.39 million, or 11.6 percent, but the wage adjustment accounts for only a portion of that increase. Other factors include new positions, a budgeted 12 percent health insurance increase and a 1 percent increase in LAGERS retirement contribution rates for employee groups other than fire.”
Other budget highlights
■ Creation of new municipal employee positions such as human resource manager, communications specialist and six firefighters, among others.
“The human resources manager is being created because, with the pending retirement of our current payroll/human resources clerk, we recognized that the human resources duties for an organization of our size and complexity have greatly increased since the position was last evaluated,” DeClue said. “Rather than adding an additional employee, we’re adjusting the pay and title for the position and modifying its duties by moving payroll processing responsibility to our finance assistant. The HR manager will review and serve as a backup payroll processor, but their day-to-day work will be concentrated on human resources responsibilities.
“The communications specialist is a new position intended to provide more consistent and proactive communication between the city and its residents, as well as structured internal communications. This would include communicating council actions, infrastructure and street projects, park improvements, city programs and other activities. Recent discussions surrounding the data center have also demonstrated the importance of providing residents with timely and understandable information.
“The budget also includes six additional firefighters associated with firehouse No. 2, but I want to emphasize that these are contingent positions.”
■ $3.4 million dedicated to transportation projects.
“The $3.4 million is not the city’s share or match alone,” he said. “The budget presents transportation projects at their full project cost, with the related federal grant reimbursements recorded separately as revenue.
“Major projects include the Festus School Safe Routes to School sidewalk project at approximately $991,000, the Safe Streets for All demonstration project at approximately $1.198 million, the Ridge Avenue retaining wall at $500,000, Sunshine Trail at $219,000, and design of East Main Street at $250,000. The two federally supported projects provide approximately $1.75 million in grant funding, with a combined city match of approximately $437,921.”
■ $1.256 million for the parks system.
“Council and staff recognize that our park system has major needs that need to be addressed immediately, and to help with that we’re making a heavy investment in our park system this year using capital reserves,” DeClue said. “First and foremost, on our list of projects is restoring bathroom service at Crites Park, for which we have approximately $120,000 allocated in this budget. Council also allocated an additional $150,000 for restroom facility upgrades throughout the park system. Another major, important project will be installing a water recirculating system at Turtle Cove, which will allow us to operate a longer season, weather permitting.”