Pevely city officials recently approved a budget for the 2024 fiscal year that projects $1.1 million in deficit spending, but that is not a cause for concern, City Administrator Andy Hixson said.
The FY24 budget projects $9,986,000 in total expenditures and $8.8 million in revenue.
However, the city likely will spend less and bring in more than the new budget calls for, Hixson said.
“You would rather be more conservative on (estimates) of revenue and more generous on expenses,” he said. “That’s just a good budgeting practice.”
Hixson said city reserves will be used to cover any budget shortfalls.
“Predominantly (reserves) out of the water and sewer funds,” he added.
Hixson said the city is projected to end the current fiscal year on Dec. 31 with $11.3 million in reserves.
Then, according to the newly adopted budget, the city is expected to spend down the reserves to $10.6 million by the end of the FY24 budget, which runs from Jan. 1 through Dec. 31, 2024.
Hixson said the city’s projected deficit spending next fiscal year is due to planned expenditures for capital improvements.
“We’re reinvesting with capital improvements,” he said. “We’re buying a new aerial bucket truck for the street department and will do a number of street overlays. We will buy a new hydro-vacuum excavator for the water department and do water line replacements to replace asbestos-lined pipes.”
Hixson said the aerial bucket truck and the hydro-vacuum excavator will cost about $125,000 each, and the street overlays should cost about $300,000.
No pay raises for the city’s 49 municipal employees are included in the upcoming budget, which calls for $3.5 million to be spent on salaries, Hixson said.
“That’s less than 25 percent of the budget,” he said.
Hixson said city employees received significant salary increases the year before, ranging from 3.5 percent to 25 percent, following an analysis of employee compensation.
“And, we’re paying more into LAGERS, the retirement system for employees, in the new budget,” he said. “We are paying 4 percent more in LAGERS. The total amount is still being tabulated.”
The city’s current budget calls for $10,726,000 in expenditures and $9 million in revenue, so spending is expected to be down during the 2024 budget year.
Hixson said even though a few big-ticket capital improvements were included in next year’s budget, there was a concerted effort to keep expenditures down.
The city’s main revenue streams are sales tax and water-usage and sewer-usage fees, Hixson said.
He said Pevely’s financial picture looks “extremely good.”
“It was an extremely easy budget process this year. Everybody worked great together and that made things go smoothly,” he said.
“We’ll still have over $10 million in reserves (at the end of the projected FY24 budget).”
The Pevely Board of Aldermen voted 7-0 on Nov. 20 to approve the FY24 budget. A Ward 1 board seat vacated by Larry Coulson last summer had not been filled at the time of the meeting.