On Aug. 31, the St. Charles County Council adopted the 2021-2025 Capital Program and Strategic Plan, which County Executive Steve Ehlmann had outlined during a work session on Monday, Aug. 23.
Ehlmann’s report on the plan was generally ominous regarding the county’s financial picture and its prospects for the next five years. Painting an economic future that, if not yet a crisis, appears to be a pot beginning to boil. With expenditures rising and revenues either static, or in decline, the county faces serious decisions and choices in the near future.
As council member Mike Elam (District 3) stated during the Aug. 23 meeting, “We have a lot less money than we were expecting.”
The work session, called to discuss the plan, became much more than a simple planning session. It quickly devolved into a grim warning concerning the county financial crunch, and the unappetizing choices facing the council and, ultimately, citizens.
“The problem is that all that was based upon all of our combined experience over the last 20 or 30 years. As we’ve found out, with this COVID, there is no playbook.”
– County Executive Steve Ehlmann, Aug. 24, on the future of the county’s economy
The council heard testimony from County Finance Director Bob Schnur, Collector of Revenue Michelle McBride and Director of Administration JoAnn Leykam, all of whom warned of a coming financial pinch. All said certain fiscal pressures mount yearly and would require significant action soon, before they become insoluble problems. Among those “revenue challenges” are bond payments that total $3.8 million annually, maintenance contracts totaling $1.8 million annually and costs associated with the county-owned Family Arena. According to the Capital Program and Strategic Plan document, approximately $4 million in Arena maintenance and improvements exceed the county’s ability to pay for those items.
Alarmingly, the document states that “…to avoid a negative fund balance in 2022 and future years (the county) will have no choice but to try and maintain aging or failing systems and not replace them.” Furthermore, the document states, “Without new revenues the Justice Center Master Plan renovation cannot be completed.”
The county report continued further on the financial problems facing the Justice Center, stating that “major modifications are still needed and citing small, inflexible housing units; difficult working conditions and movement in the facility; a lack of programming space and natural light; and a clear need for additional staff in order to maintain current operations. The report and county officials also stressed the age of the current facility, the fact that original building systems are over 30 years old, that its population exceeds its original capacity, that it is operating with outdated security and controls, and that its maintenance has been deferred on numerous occasions.
The county’s master plan includes $80 million budgeted for fiscal years between 2023 and 2025 to complete the Justice Center Master Plan, but that amount does not solve all of the building’s issues, including all of its maintenance and management schedules. The upkeep costs alone on the Justice Center, will total $843,500 in the next four years and those costs, along with roofing replacements and HVAC repairs, are unavoidable expenses.
Faced with these unsettling numbers, the council is weighing options for the short term, as well as the long term.
Previously, the council put $3 million in projects on hold in April 2020 due to economic uncertainty associated with the COVID-19 pandemic.
Council member Joe Cronin (District 1), a longtime voice for fiscal restraint and paying for projects up front, returned to his theme of one year ago. He argued that Missouri must follow the lead of 48 other states and begin taxing out-of-state online sales of more than $2,000, which he argued would net the county $3 million per year. He noted that Gov. Mike Parson supported this idea, considering the state government’s own growing fiscal difficulty. A bill addressing this idea (also known as a Wayfair Bill, after the online retailer) came close but did not pass out of the last state legislative regular session.
Cronin has, in the past, mused over the idea that perhaps the time has come to seek a tax increase with no public vote, considering the traditional aversion of Missouri taxpayers to revenue enhancements.