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Smithville reports modestly stronger revenues in 9-month budget update; board to review final FY2025 proposals in September
Summary
City staff told the Smithville Board of Aldermen that nine-month results show general fund revenues running about $400,000 over budget, driven by sales/use tax and interest income, while capital reimbursements and delayed projects shift costs into FY2025. Staff will return with refined scenarios in September ahead of an October adoption deadline.
City staff presented a nine-month budget update at a Smithville Board of Aldermen work session, saying general fund revenues are about $400,000 above budget while projected expenditures increased by just over $300,000, leaving a roughly $100,000 favorable variance.
The presentation, led by Speaker 3, summarized four budget amendments made during the year: a November 2023 amendment of $732,000 for carry-forward capital projects; a March amendment that included roughly $30,000 to the general fund; a May amendment of $45,000 to the general fund and $15,000 to the water and wastewater fund; and a May carry-forward of $460,000 for a commercial-street sidewalk project plus $1,000,000 for Streetscape Phase 3 charged to the utility fund.
Speaker 3 said much of the revenue strength came from sales and use taxes and higher-than-expected interest income. "Most of that increase is through sales and use tax as well as interest income," Speaker 3 said. Use tax, which captures online purchases, is projected to exceed budget by about $175,000 and to finish the year just over $900,000.
Board members pressed staff on volatility in sales-tax receipts. Speaker 3 cautioned that the last four to five weeks showed a slowdown and said staff will monitor the September disbursement to determine whether the dip is an anomaly.
On fund balance, staff reported the general fund is projected to end '24 at roughly 43.5% of operating expenditures, above the board's 25% reserve policy. "That reserve policy... is not something that state law requires," Speaker 5 said, noting the policy serves as internal guidance to manage rainy-day funding and debt-rating implications.
Capital reimbursements from external sources were singled out as timing adjustments rather than recurring revenue. Staff removed a $1,488,000 MoDOT reimbursement from the '24 capital improvement sales tax fund projection because the reimbursement will coincide with expenditures in '25; a similar MoDOT reimbursement of $488,000 was noted for '23.
Staff also highlighted operating-cost pressures heading into FY2025: health insurance projected at roughly 15% (a broker assumption), a 31% increase in an annual IT services bill due to software migrations (Tyler Technologies), property and liability insurance up 11% and workers' compensation changing by 9%. Speaker 3 said staff used conservative assumptions and will return in September with updated figures.
On personnel, the board discussed compensation scenarios intended to help recruitment and retention. Speaker 3 presented multiple options (examples included 6% across-the-board versus scenarios with higher frontline or director percentages). Board members requested multiple scenarios incorporating negotiated outcomes for police sergeants before a final vote.
Speaker 5 said staff will incorporate updated revenue details, the $2,500 commitment for the Northland Career Development Center and multiple compensation scenarios into the next budget iteration, and will present them before the public hearing and final adoption expected in early October.
No final budget actions were taken at the work session; the board adjourned the work session by voice motion and moved on to the next meeting.
Ending: Staff will return with refined revenue and expense scenarios in September; the board expects to set tax rates and hold required public hearings before final adoption in October.
