Finance Director Sandy Evans and Interim City Administrator Grant Litekin reviewed the history, structure and options for the Build O'Fallon Trust Fund during the Committee of the Whole meeting on Sept. 29.

Why it matters: the fund was created to provide stable capital funding for parks and other large projects while reducing reliance on property tax; council direction will determine whether the city spends annually or saves toward larger, multi-million-dollar projects.

Evans said the fund began in 2021 and became effective in July 2022 with a $4 million seed transfer from the general fund. She told the committee the seed money came from general-fund reserves and was not a direct ARPA appropriation. Evans said the fund currently generates roughly $3.2 million in the fiscal year from the sales-tax mechanism that supports it, and that the council set a practice of depositing 33% of the annual quarter-cent sales tax receipts into the trust fund to build reserves for larger capital projects.

Staff said the fund is intended for unfunded capital projects over $100,000. Evans and Litekin explained the fund’s governance: projects are proposed by department heads and presented to council for consideration; the council can also direct staff to preserve funds for larger endeavors. Litekin said if council wants to prioritize saving for a large project the majority can direct staff accordingly during the budget process.

Why the principal matters: council members asked about keeping a $4 million principal intact versus allowing the fund to be spent. A member suggested indexing the $4 million principal to preserve purchasing power over time; Evans noted the annual 33% allocation contributes to growth and that investment interest also accrues to the account.

What’s next: staff asked council members to bring project ideas through their ward representatives so staff can evaluate and include options in upcoming budget and committee meetings. Litekin said the trust fund discussion will continue through the budget season and be presented again at future committee meetings.

Direct quote: Finance Director Sandy Evans said the fund “currently that fund generates approximately 3,200,000.0 in this fiscal year.”

Ending note: the presentation was provided as background and staff did not request an immediate vote; the council will weigh whether to spend the annual allocation on smaller projects or to allow the fund to grow for larger capital needs.