Council tables housing issue

A resolution showing the city council’s support of a federally-funded, income-based housing project raised a rift of opinions between members at Monday night’s regular monthly meeting. Some council members and the mayor were in favor of supporting the project, while other council members had strong feelings about allowing housing subsidized with tax dollars.

The council had already voted on and approved 17 new bills which dealt mainly with contracts for work scheduled in the city and other agreements. But the final resolution to be considered caught the attention of a few council people. The matter would eventually be tabled when it became clear that a unanimous agreement would not be reached.

The resolution, R22-2007, was to show the council was “supporting and encouraging the efforts of East Missouri Action Agency and Renaissance Property Group, LLC, in its endeavor to develop a 56-unit apartment complex”. Renaissance Property Group, LLC., already has one complex located between Maple Valley Drive and U.S. 67. The plan called to add additional buildings to that complex.

Councilwoman Vonne Phillips quickly raised opposition to supporting the project. She said she received a certified letter about the proposed project, and had called Renaissance Property Group, LLC, to set up a time to view the existing complex. She said her calls were not returned. She questioned the need to support the efforts.

Councilman L. J. Miller sided with Phillips on a request to table the matter until a later time. Miller said the apartments were funded by “our tax dollars”, and explained how state or federal tax credits allow investors to profit “up front” on such projects. He also questioned whether or not the city should be supporting subsidized housing utilized by people working at businesses which the city also subsidizes through various forms of breaks and assistance to draw in the companies.

Phillips had said her letter indicated the housing was used by, as an example, workers from Accent Marketing. Miller said the city had given Accent breaks to draw them to Farmington, and now was giving breaks to developers to build housing for the workers. “Are we going where we should be,” Miller questioned.

Despite urging by Mayor Jeannie Roberts and other council members to pass the resolution — which would be of no direct cost to the city, but only show the city’s support of the project — Phillips eventually made a motion to table the matter. The motion was seconded and approved by a majority voice vote.

Roberts later said that EMAA Director Bill Bunch indicated the agency has an early October deadline to have the paperwork filed. The mayor said earlier this week that she would consider calling a special meeting to revisit the topic in the coming days.

Aside from voting on the assorted bills, council members took up and approved a budget for the next fiscal year. City Administrator Greg Beavers called it a fair and workable spending plan.

Beavers had explained last week that the proposed budget for the city included a slight reduction in electric rates for customers and subsequent revenue for the city. He added, however, that through cost-saving and cost-cutting measures the past couple years, operations should go on as normal at the same level as the past several months — even without excessive sales tax revenue growth in the coming year.

Furthermore, Beavers said, work is being done to improve the airport and the east side sewer treatment plant, to carry out several smaller capital improvement projects, and in the meantime to keep fiscal reserves up.

A budget draft presented to the council for consideration showed incoming revenue of just more than $5.6 million, with expenditures running nearly identical. That amount was the operating, or general fund, revenue made up of sales tax revenue and assorted fees and tax collection. Most expenditures in that fund go to pay for general operations of the city’s many departments.

That amount did not include nearly $18 million budgeted both as expense and revenue for purchasing and selling electricity through the city’s electric infrastructure.

The city has been slowing gaining reserves the past two years. Beavers reiterated Monday evening that it’s good fiscal responsibility to maintain a reserve adequate to cover at least two months of expenses.

At the time the council began working on the budget several weeks ago the sales tax revenue appeared to be down significantly as compared to the budgeted amount year-to-date. But when the next month’s numbers came it they showed a much better picture. The plan for FY2008 calls to budget sales tax revenue flat, or at the same level, as the budgeted amount for FY 2007.

Another area of the budget that will work to ease the spending plans of city residents is a slight decline in basic electric rates, along with an additional savings for customers who use more than 1,500 kilowatts per month. Beavers indicated the new budget calls to reduce costs for customers by about two percent, while also lowering the step increase for use in excess of 1,500 kilowatts per month for residential customers.

One way the city hopes to keep it’s own electric costs down is to refinance several trailer-mounted, diesel-fired generators used as backup power sources and to generate excess power. The generator debt will be stretched out over a longer period, effectively lowering the annual cost to retire the debt. An aside to the generator financing will be a plan to package in debt incurred in the construction of the new courthouse annex building downtown.

While the courthouse annex is a county building, the city offered incentives and assistance to keep the offices in Farmington. That list included assisting with the purchase of property, demolition and preparation of the ground. A Tax Increment Financing district was formed to draw future sales tax revenues to help eventually pay off the debt incurred by offering that assistance. While the city has had a line of credit through a local bank to the tune of about $800,000 for the annex work, a plan has been devised now to roll that debt into the refinancing of the generators in coming months.

And a final note on the budget will save the city workers some precious dollars on their health insurance costs. Going into the coming year with an anticipated health care cost increase of about 12 percent for workers, the city council opted to put the health care plan up for bids. A comparable bid was received from a well-known national company which will result in a cost increase of only about 1.8 percent.

It was also discussed that work continues on a major — about $2.2 million — airport expansion phase which includes new hangars and a terminal building, an updated fuel delivery system and ground work. Engineering was approved for the east side wastewater treatment plant, and several smaller capital improvement projects are factored in the upcoming budget year.

One project which will have to be put on hold, at least for a time, is a rebuilding and expansion of the city’s firehouse. Bids for improvements on the building came in considerably higher than preliminary estimates. Beavers said he would be looking closer at the bids, but as of this week had not been able to determine why the costs were so out of line with general construction estimates used in the planning phase for the project.

The plan called to expand the bays of the firehouse, as well as rebuilding the existing housing quarters.

The council will meet next for it’s regular monthly work session on the second Thursday evening in October.