The city of Festus will spend about $7.5 million more than it collects in revenue this budget year, but the deficit spending is intentional so the city can fund water system repairs, park improvements and other projects, city officials said.
City Council members voted 6-0 Sept. 23 to approve the new budget, which began Oct. 1 and runs through Sept. 30, 2025.
Council members Jim Collier of Ward 1 and Staci Templeton of Ward 2 were absent from the meeting.
According to the new budget, the city’s expenditures for the year will total $45,242,521, and revenues will total $37,707,216, a $7,535,305 deficit.
“We will take (the difference) from reserves,” City Administrator Greg Camp said. “It’s a planned use of reserves.”
The city is projected to end the 2025 fiscal year with $28,092,324 in reserve funds.
After amendments to the previous fiscal year’s budget, which council members also approved on Sept. 23, the city ended the 2024 fiscal year with revenues of $34,495,446 and expenditures of $37,405,950, a $2,910,504 deficit, Camp said.
The city is starting the 2025 fiscal year with $35,627,628 in reserves, said Michelle Vaughn, the city’s finance director.
“I think it’s important to say the last couple of years the mayor (Sam Richards) and the council have been focused on critical needs like the water supply system,” Camp said. “While, at the same time, they’ve also been acknowledging the need for quality of life projects like the splash pad and the Red Barn (both at the Larry G. Crites Memorial Park).”
The city has been attempting to rectify a long-standing water supply system problem in the Edgewood neighborhood near the Festus R-6 schools campus by replacing pipes, although that is not the only area where water concerns are being addressed. The splash pad, along with an all-inclusive playground, are coming to Crites Park.
In addition, the restoration of the Red Barn is planned.
“The money (for the various purposes) – $3.5 million of it goes to water supply system improvements, and $2.5 million is for park improvements, like the splash pad and all-inclusive playground,” Camp said.
He said $1 million will go to the Fire Department for land acquisition and equipment.
“We’re looking to build another firehouse.”
He said the city has budgeted another $1 million to cover the city’s share of planned road projects, including Main Street phase 2 and North Mill Street improvements and engineering for streets near the Festus R-6 schools.
The new budget also includes raises for all 102 municipal employees, Camp said.
“Most positions get 6 percent raises,” Camp said. “A number, mainly clerical staff, were below average for their positions and get 13 percent raises. Also, the Fire Department employees are getting the 13 percent raises.”
The raises will cost the city a total of $461,737, with an additional cost in benefits of $185,875, for a total of $647,612, Vaughn said.
Overall, wages and benefits in the FY25 budget come to $11,245,649, she said.
The FY25 budget includes four new hires (two police officers, one parks employee and facilities maintenance employee) who will bring the number of full-time municipal employees to 106, Vaughn said.
The city employs an additional 22 part-time employees, she said.
Camp said even with the deficit spending, Festus remains on solid financial ground.
“All funds together – funds and assets – it’s nearly $47 million in reserves,” he said. “We’re only required to have 39 percent of operating expenses in reserves. That’s required by city ordinance.”
Vaughn said the budget projects operating expenses for the fiscal year at $17,639,740, which are for the general fund and public safety and fire funds. The budget also projects the city ending with an estimated operating fund reserve balance of $8,538,333, or 48 percent of operating expenses.