City Council - Regular Meeting

started. Would everyone please rise for the pledge of allegiance? I pledge alce to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. Roll call, please. Mayor Given, here. Council member Detic here. Council member Litzo, here. Council member Mlan, here. Council member Riker is absent. Council member Schaefer, here. Council member Zimmer here.

Thank you. We have no recognitions this evening, so we're going to move straight to public comments. Zo, has anyone filled out a card to make public comment tonight? Mayor and council, we have no public comments tonight. Thank you. So, we will move on to unfinished business. Um, bill 11122. Mayor and councel, this is an ordinance adopting a revised city of Kirkwood classification and pay plan effective April 1st, 2026. Thank you. Are there any questions or comments on bill 11122? Roll call, please. Mayor Gibbons,

yes. Council member Jedetic, yes. Council member Litzo, yes. Council member Mlan, yes. Council member Schaefer, yes. Council member Zimmer, yes. Thank you. We'll now move to new business. Resolution 142026. Mayor and Council, this is a resolution amending and readdopting the city of Kirkwood city fee schedules pertaining to the sanitation department. Do I have a motion and a second to accept resolution 14206? So motion are there any questions or comments? I council member Jeff Sedic.

Yeah, David, can you talk to the last two in two increases we've had with sanitation? I think one was Oh, I thought I had it. 2017. Chris might know what the 2017 was the last increase or that was one of them. Uh the last increase has been was in 2020. Um before that it was in 2017 and those both were one was 20% one was 33 and we're looking Do you remember what the percentage increase was on those?

Um in 2020 it raised it by $6. Um and that ended up being it was a 33% increase. Uh tonight I'm asking for a 10% increase. Okay, great. So this is six years later and you're asking for a 10% on this. So it's been a while. Yes. Great. Okay. Any additional questions. Okay. I can't remember. Roll call, please. Gibbons. Yes. Council member Jedetic. Yes. Council member Litzo. Yes. Council member Mlan. Yes. Council member Schaefer. Yes. Council member Zimmer. Yes.

Very good. Resolution 2026. Oh, no. Uh 15 15 15 202 26. Mayor and councel, this is a resolution amending and readdopting the city of Kirkwood uh city of Kirkwood city fee schedules pertaining to the water department. Thank you. Do I have a motion and a second for resolution 152026, please? So move. Second.

Thank you. Are there any questions or comments on the resolution? I do. Okay. Okay. Um again, this is for a 5% water increase and this is the fourth increase in four years. Um 2023 we had a 15. Um 24 we had a 20 and 25 we have a 27%. And after those three rate increases, it did increase water by 75% the rate. And this 5% again, if you do the accumulation, it it adds up. Um, and this one's going to put us at 84%. In essence, in three years and one day, I mean, it counts over the four-year thing. So, again, um, it's pretty steep increases. Last summer we heard from quite a few people about the increased water rate which is also increasing the infrastructure fee um which are pretty significant increases over the last three years.

Okay. Thank you. any other let's could we have um public services director Chris come up and talk about this and why he feels like it's necessary to Sure add this

um yes so the reason why it's necessary um so we have uh over the past uh several months we've been looking at water pretty extensively um and we have over 111 11 miles of cast iron pipe. Um, and so every year, um, if I if I'm not keeping up with with rates, um, I'm getting behind in in, uh, meeting capital expenses. And so, uh, this rate increase is just to keep in line with, uh, so that we don't fall behind the eightball. And so, um, we know, we've talked about, uh, recent, uh, rate increases over the last three years. Uh, those have gotten us to a point where we're just a little bit higher than what Missouri American charges. So, um, that's covering our expenses. However, this is just to keep us status quo. um because we've we've have not had those uh status quo raises in the past.

Any other questions? Roll call, please. Mayor Gibbons, yes. Council member Jetic, no. Council member Litzo, yes. Council member Mlan, yes. Council member Schaefer, no. Council member Zimmer. Yes.

The resolution passes. Resolution 162026. Mayor and Council, this is a resolution authorizing the sale of certain real property located at 23 or 2377 Marshall Road, Kirkwood, Missouri 63122 to Kirkwood United Soccer Club for the amount of $175,000 and authorizing and directing the mayor to enter into a sale contract. Do I have a motion and second to accept resolution 162026 as read? Thank you. Second. Thank you. Are there any questions or comments?

I will I will make a comment. Surprise, surprise. Um, a little under two years ago, Paul and I, um, worked with a group of residents at the mayor's request in really looking at what were options with the KAA fields. So, um, a lot of a lot of activity over the last two years, and it's really nice to see this finally kind of get wrapped up. had the um opportunity to to be in contact with three of the ones that we met with originally, which is Rick Street, Michael Klener, and Ben Cathy. And they were very excited and supportive of um this group coming in and um buying the property and building the soccer fields in the future. So, they all had um really positive things to say about the group. um had met with them during this time as part of the groups that look to work together. Um and I think this is going to be a win for us and for Kirkwood Soccer and Kirkwood United Soccer Club.

We actually have somebody here from Kirkwood United Soccer. Alex, you want to come to the podium for um and just uh we'll have to suspend Robert's rule of voters. Just a motion in a second. Okay. Sorry. There you go. Then all in favor? All in favor? Hi. Hi. Hi. Perfect. Yeah, thank you. Sorry, Alex. I How we How are we doing? Yeah, great. I just thought it would be great to hear from you what United Soccer Kirkwood United Soccer Club is all about.

Sure. Um I actually am the agent, the real estate agent for Kirkwood United. Uh I was involved in their process. Um I am in in the know of what their ins and outs are. Obviously, I know they're local. Um they are a nonprofit. that they're ready to make this space uh usable for, you know, youth around here for sports. Obviously, um I used to play at the Kirkwood United or sorry, the uh Kirkwood Athletic Association ball fields back when they were usable. Um so, it was really cool to have the United Soccer Club reach out to me, want to do something there, and I'm happy that we were able to figure something out. Right.

And um I had heard that they um they really work on the character of the the youth over winning um that learning the sport, showing good character, those kinds of things are typically they definitely have um more educational focused soccer over there instead of you know winning. There's some you know slice luse all those teams are there to create the best team possible. Um, but the Kirk United Soccer Club, from how I see it, is a a group of educational soccer-based people that's local and, you know, it's it's a really great organization.

Great. Good. Thank you. And Alex is also a recent resident of Kirkwood. Just moved. Yeah. So, welcome. Thank you. Appreciate it. Thank you.

Okay. Any additional Oh, yes. Thank you, Mayor. So this whole the Kirk former Kirkwood Athletic Association property was accepted by the city of Kirkwood after being offered by the KAA which felt they could no longer operate the club as they had originally and that happened under Mayor Griffin. So I've been dealing with this probably since the end of 2022 or beginning of 2023. So, I am excited that we've finally come to a resolution and a good resolution. Um, I think, you know, soccer for kids down there. It's workable. Um, I'm also very excited that that property is now going to have the the fences down and it's not going to be an isore or an attractive nuisance for uh knuckleheads. So, I think this is a great um I think this is a great resolution and I hope the rest of the the city and it's Kirkwood Soccer. I mean, I think the league is open to anybody, but um it's it it'll be a good thing for for our kids. So, I appreciate this.

Any more comments? This is roll call, please. Mayor Gibbons, yes. Council member Detic, yes. Council member Litzo, yes. Council member Mlan, yes. Council member Schaefer, yes. Council member Zimmer. Yes. The resolution has passed. Bill 1120.

Mayor and Council, this is an ordinance adopting and approving the operating capital budgets for the city of Kirkwood for the fiscal year April 1st, 2026 through March 31st, 2027. In appropriating such sums is set forth herein for all departments and the accounts therein specified for all expenditures of the city of such year which appropriations total 123,54,765 capital projects of $22,680,955 appropriating the sum of $782,350 for payment of interfund loans and reappropriating 1 million $363,235 for previously approved projects that will be incomplete as of March 31st, 2026.

Thank you. Do I have a motion and a second to accept bill 1120? Thank you. Are there any questions or comments? Oh. Oh, you can go ladies first. Well, it's going to be a while.

Okay. Mine's going to be simple. I I would just like to say thank you to David and Mary sitting in the audience out there for all the hard work that went into this and getting it cleaned up. And we now know and we've got a clean slate and we're going forward. I I can't even tell you the weight that's been taken off my shoulders that I feel that we're here at this point. So, thank you. Good. Thank you, Hot. Thank you, Mayor. Um, and actually Zoe, sorry for the record. Uh, she she'll give us a copy. Don't worry.

I Yeah, I can give you a copy of this so you don't have to listen to the recording. So, I want to give some historical perspective to the ongoing worries and debate about Kirkwood's current debt load and comments that past councils engaged in unnecessary, irresponsible spending to fund capital expenses. I have to explain to everyone in case you don't know that council is guided by the will of the citizens they represent. They're guided by our strategic plan which the councils prepare based on citizen input. Without a strategic plan guiding our policies and investments, council and staff would be like a ship without a rudder reacting on the fly to whatever waves come next. not anyone's idea of a prudent way to manage a budget while funding public services and maintaining our capital assets. Our current strategic plan lists four goals which are formulated as e economic vitality, governance and civic civic engagement, quality of life and environmental stewardship. Each goal has specific objectives and strategies listed for achieving those goals. Our strategic plan dashboard which tracks the progress of pursuing the goals is available on the city the city's website by the end of this month. The principle on all all of our current bonds or certificates of participation will be just under $62 million. Add to that our inter interf fund loans and the swan pump lease and the total principle of debt is just over $72 million. By 2031, that figure will drop by nearly $5 million as three sets of cops, debt, and the pump lease are retired. As to the new public works facility, council ordered a professional appraisal and a professional perspective of the proposed

project. Those reports gave no reason to believe that the purchase was not a wise investment of taxpayer funds. Moving public works will bring opportunities for seniors to downsize and bring new residents to move downtown as envisioned in our strategic plan and our downtown master plan. In 2024, Kirkwood issued just under $24 million in municipal bonds. Again, cops. These bonds will pay for a new ladder truck for the fire department, the replacement of the water pump station in Kirkwood Park, the renovation of the ice rink, which will be finished by the end of July, the recently completed renovation of the community center, and the public the purchase of the new public works property. In addition to consolidating public works, the relocation of electric and procurement to Leingwell too will enable the sale and future private development of the parcel they currently uh occupy to help offset our debt issued for these capital projects. To properly consider our current debt, we have to consider Kirkwood within the context of other municipalities that also own their own utilities. I want to thank Mayor Gibbons for reaching out to Pat Kelly, the executive director of the Municipal League of Metro St. Louis, for providing information about other cities around the state that also own their own water and electric. Pat provided a list of cities that includes Hannibal, Marshall, Popular Bluff, Lebanon, Rala, and more. all of which have about the same population as Kirkwood in the range from 20 to 33 million residents. Considering our current debt of about $72 million, that figure equates to not quite $2,500 per person to pay for our electric modernization and water pump

station, ice rink, kpack, fire truck, community center improvements, the purchase of laughing well, and with no increases in property taxes to pay for all this. All the other cities on Pat Kelly's list have debt per capita of at least $5,000 per person. Ra's debt is $6,000 per person. They have 20,000 uh population of 20,000. Pat Kelly concluded that, and I quote, Kirkwood's overall debt position is strong relative to comparable Missouri cities that operate their own municipal electric and water utilities. The city's debt bur burden is significantly below peer norms across multiple measures. Total debt equals about 4% of assessed valuation, far below the common peer range of 22 to 28% which reflects a strong property tax base relative to outstanding obligations. He goes on to say that taken together, these indicators show that Kirkwood maintains a conservative capital structure, low long-term leverage, and substantial remaining debt capacity, placing Kirkwood in a very strong financial position relative to its municipal utility peers. I'm proud of where Kirkwood is right now. how far sorry how far we've come in the last 20 years despite many challenges our staff consistently tell us that other municipal leaders view Kirkwood as a model which they look to for best practices I am grateful to previous and the current councils for envisioning and realizing where we are and where we want to be in the coming years supporting our downtown, working on the cost of living in Kirkwood, providing opportunities for

healthy living and recreation, having fun with Green Tree and the Witches Walk. Yes, we have funding issues. Council and staff have laid out workable plans for managing our electric and water capital expenses. We just need to stay the course. Kirkwood is a strong community. As Paul said, we have a whole lot going for us. I'm very privileged to sit where I do and I'm very proud to be part of this community that thinks and acts with its head and its heart heart. Thank you.

I wasn't going to say anything but I am now. Um Nancy referenced that this past management's been guided by residents. KAC residents went in a community center. We got K-pack. It wasn't guided by the residents. Transfer funds from electric and water. I don't think the residents really really approved that or really knew what was going on. Um Luffing will paid $12 million for property that was appraised well under that. Again, that's not strong management. That wasn't guided by the residents. $72 million in debt. That may be, you may be right as far as the percentages of other municipalities, but we're losing cash. We don't have the cash to afford it. In order to pay for this debt, we got to take money from electric. We got to take water money from water. Where are we today? We don't have a water department that's stable because we don't have the funds because prior management took money from the coffers of that. This council was elected to fix these problems. not to do away with the problems, but to fix these problems. And I'm proud that we're going to be fixing some of these problems, addressing the problems that I feel prior management has has left us with. And and so I take I take offense to the fact that prior management was guided by the residents. That's all I have to say. Mayor,

could I add that actually it's city council that approves the budget. So they were they we've all been aware of the transfers and they've only been approved by by council. So on you guys well and I was I would also note that that pretty much everybody in this dis approved last year's budget which included transfers.

I would say that's because we didn't have proper numbers in our hands last year at this time. I believe I mentioned that that for 22 months we tried to get proper information and we have it now and I appreciate that's why I started with thank you David. Thank you Mary for the numbers. I have some questions, but just on the transfers last year, we did actually not approve the water. I was able to stop that. Yeah, I pushed for that several years ago under Mayor Griffin

electric is kind of propping up. But let me I have a a few things to say, but I'm going to first start so that people to reiterate what Paul said. Um Mary and David and department heads have worked um hard on this budget. Um we actually have the fourth draft I think before us. Um in the three the first draft was done in September and really since about January to now we've had three additionals. So just to kind of highlight some of what David has worked with again department heads and with Mary I just want to ask him some questions so he can give us and we've all had this conversation. you know, hopefully there's people watching to hear it as well. But, um, David, there have been some positions eliminated in this budget. Can you talk to those positions? Do you remember? I I have the answer. Remember I told you I'm coming up the steps. I have the answer. If you don't,

bet right here. No, I can give Mark the answer. Flashards. Mhm. So out instead of So you did you eliminated a dispatch position? Yes. You took that out of the budget and you also worked with the dispatch folks in changing the way their scheduled so that that part-time position hours have been decreased. Yes. And we decreased the overall value there or volume there as well. There's also a uh a partial decrease between electric and water and reducing half of a position out of each department to share a position in order to rightsize there as well. Right. And that's an administrative position you've you've been able to eliminate.

And in the dispatch actually on you were able to do that um one pair is going elsewhere for their dispatch, but you were able to eliminate $39,000 out of that dispatch because of what you've done. Correct. So that was that was something that just kind of worked these last few months. Um there's no new positions in this budget even though that there was requests. Um there is the finance position is in this current version of the budget. Well, you did you have a new finance Oh, I didn't realize you kept it in. I thought one of the many conversations was it was out, but it's in

the most recent versions. This this bound book has it in there. Oh, wonderful. Okay. Well, that makes me even more happy. But um there was a recommendation at some point to look at fire and EMS, but that position is not in this budget. No, unfortunately. Um due to the costs, they are not.

Um the other thing you started as you took on this role is that reviewing the vacancies and kind of evaluating them. Um how has that been going? Um it it has been going well I guess as well as as one one could say. Um we've been heavily evaluating every position that's come in front of us to this point. Full written descriptions on necess the necessity of it their impacts on service provision. Uh impacts on you know what the impacts would be to the community for each and every position that we're looking at here. And that you anticipate she'll will continue even as we go into the new budget year. that will continue for this whole next budget year.

Great. Um you've also worked on um in again with department heads or interim department heads um um cancelling contracts. You've made some headway in those areas.

Uh yes, we have. Um so we've reduced contract load in uh couple of our departments uh by substantial amounts. We've also looked at um in our general fund uh eliminating upcoming contracts and current contracts for this year's budget as well. Um some reductions of surveys and softwares and things along those lines that you know u aren't necessary to our operations um and are only temporarily held. But yeah.

Great. And then one of the ways you've been able to balance this budget is, you know, maybe good or bad, but you've reduced the use of reserves. Um, it's now projected to be just at like 6.7 million. And I think the first draft had it at 14 million. So between the many iterations, you were able to reduce dependency on the reserves. Yep. And I do want to point of that $6 million um 4.7 of it is for um the upfits that were planned to be coming out of reserves for the additional revenue that came in for the um uh ice rink resurfacing. So,

so those are the coops that are are so that was planned the revenue came in in advance and we're now expending those those funds and it it's a use of reserves but it's a use of reserves through the revenues that we received in. So I want to make that distinction that you know we're not spending all these additional reserves

right but still within that you were able to reduce um you know still trying to balance the electric department projected loss or the ongoing loss you are covering that partially from reserves out of general mil uh general fund by 10 million 4.3 million from the water fund and 1.2 million from sanitation. Are those numbers still holding? uh they are to this point uh until we close out the year.

Right. And then you're still going into the next year having to transfer the 1.9 million from electric to manage um covering the op operations. So we're not really adding to the reserves of electric or general fund. There is a planned addition of $1.5 million to either the general or electric fund, but we are transferring $1.9 million to the general fund. Um, you know, with the goal and intent of to continue to reduce costs throughout this year where where we can through operations, through things like the review that we talked about in order to um alleviate the need for that transfer from the electric fund and wean it off here over the next two cycles, this year and next year. So your revenue over expenses for electric is budgeted to maybe be a 1.5 million profit which will just reduce what the loss has been the cumulative loss but you're still having to use the 1.9 million to operations but the plan is to again to continually evaluate that need to transfer less transferring allows you to to pick up some of cover some of the loss in electric. Correct.

That is correct.

And again, it's something that's on your watch list right now. Um, electric's still projected to lose maybe between four to five million this year, which puts us at five of the last six years. But again, it's something that you and your um team and the interim director and hopefully a new director at some point soon have on your radar and understand where you are. Um TDD will be what will be funding the roads this year and that revenue amount is hopefully going to be a little bit more than projected, but that's that's what will fund the capital for streets. Yes, that's the the main uh source of funding for street infrastructure repair this year

will come through the TDD. Um we are not anticipating with this budget um proposed as it stands that we're going to be adding to the overall fund balance. Um it's reduced this will be the third year of reduction like from 20 to 18 million to 16 million. So the budget is leveling off some of our areas of concern but is not adding to the overall fund balance. Correct? You remember those numbers?

In regard to the entire the entire budget against all of the reserves, is that the question? Um there is a projected use of reserves within this budget,

right? So the overall fund balance is going to still drop. So again, we hope to at some point have budgets that would be adding to our overall fund balance, but again, as we're still, and I see Mary's agreeing with so, um, so as we're still trying to get our arms around where we are now, we're probably a little bit off being able to add to the overall, which includes several funds. One fund might be doing well, but other ones might be hurting more. Correct.

Uh, that is correct. I mean uh depending upon which fund you're talking about we are looking at potential for additions but budgeted there is a deficit. So in our general fund we typically uh expend about 96% of the budgeted funds which has potential within this budget to create a positive fund balance at the end of the year for the general fund. But we are expecting sanitation fund due to capital outlay that there will be a utilization of those reserves. Um there is a planned utilization of sewer lateral fund reserves and uh planned utilization of um reserves for the park capital fund which includes the project I spoke about before for the ice rink.

Okay. and and just in your budget message and again I would encourage everybody to read the budget message and the CFC reports but you stated in fiscal year 25 revenues beginning to level out amid everinccreasing expenses. This trend has continued in fiscal year 26 which is our current year and the current financial outlook for fiscal year 27 indicates a continuence of this trend. So you're you're kind of putting it out there that we're seeing a revenue leveling and we know the expenses are going out. So we're we still have to be pretty aggressive in managing what you're trying to manage going forward in this budget.

We need correct for residents moving into Kirkwood. Yeah.

There's been a plateauing of some of our sales. also put in that after a thorough analysis of the city's general fund, the general fund which isn't our enterprise primary tax, revenue stream, sales tax, gross receipt tax, and property tax, it's evident that growth in these areas has been minimal and that's still the outlook. So there is minimal. Um and then um your another part of your budget message and I'm just going to challenge us to to maybe update this is um in case you're looking. It's page three. Um Kirkwood Electric the plan set forward by the city council is expected to build a reserve in the electric fund and repay the general fund in the next five years. You know we've talked a little bit, you and I have talked about we've talked about it in the group. I mean, we're we're projecting we're going to be at 15 and a half million in the whole as of the end of this year, 14 million at the end of next fiscal year. Do you think it's really realistic in five years we're going to make 15 million to get us to zero and then another 15 million for reserves or is that maybe a little bit more than five years going to take because we're already two years into the recovery? It's very dependent upon uh council's continual evaluation and um of of our current situation. Uh one of the things that we're looking at here doing is continually looking at you know rate evaluations. So it will all be dependent upon that as we move forward um as to how we place rates and continue on that path or if that path you know becomes a six-year plan or a seven-year plan. But that will be up to continual um guidance from city council as as we go through and do we do those evaluations. We do plan on working with UFS and on a yearly basis,

right? And I do think that's important is one, you know, for us to do it in five years, you know, is that realistic, you know, and we may not get to 15 million reserves, but um it is going to take a lot of to your point involvement of the city council and the CEO and department heads and the residents to figure out what's realistic. so that we can continue to build reserves for emergencies but also cover what we as a city are obligated to provide services for. Um and your budget conclusion you know and actually CFC is working on u recommendations for the fund balances reserves for each fund. I think in one of our meetings we um we actually approved requests specific that they can help us look at those fund balances and what our target should be um and how far away we are right now. But um in your budget conclusion also you put revenues may not keep pace with expenses which is exactly what we're seeing in fiscal year 26 as we set the plan for fiscal year 27. We do expect to use some of the fund balance for fiscal year 26 and are prepared to adjust the proposed fiscal year 27, which is the one we're voting on operational capital budgets to protect and maintain the city of Kirkwood's strong financial position. And is that still kind of how you feel where we are now that that we know we have some struggles but but going into this budget year this gives us the the authorization to spend money accordingly but we also have to watch it as we see it go out the door.

It will be prudent for council and administration to be watching the budget as we go throughout this year to see exactly how revenues are coming in. in my last just question, but then I do have something else. Promise it's your last.

Well, this is the last question. Oh, wait till I get to my other thing. But but again, I want people to hear what you've worked on and what you've worked with council and with department heads. um of my previous years on the council in my time to date um this is the most effort I've seen ex you know expended to really try to come up with a budget that is hopefully attainable reasonable and that will give the department heads you know some tool some guidance in how they can move forward um and and just to highlight was it a couple meeting or so ago you actually brought us line item um that you worked again with department heads and brought it to the council, which again is the first time in my um humble experience here that we actually went line item by line item of the ones you brought and said yay or nay and you ended up I think cutting out um um almost a half a million. We we had you keep in 160,000. So we looked at, you know, maybe six 700,000 of expenses, which out of a$120 million budget isn't a lot, but just the experience and having us go through that with you was very much appreciated and something that we've really never, at least in my experience, haven't done. So I appreciate you operating um a little bit out of the traditional box and and working very differently with this council. Um, so that's all that. Now comes my other and just, you know, I I I want to make some statements and it's not intended to be critical, but I think it's important that we all um acknowledge the challenges before us. Um, and I want to just walk through some of what I consider my red flags. Not

because I think it's doing anything um horrible, but if we ignore them, if we don't acknowledge what some of our challenges are, I'm afraid we're going to kick them aside and then forget like they don't exist and we're going to lose our focus. Um one of the things, and I've had meetings with Mary and David, and um one of the things I greatly appreciate about them is that they don't just say, "Well, things are great or things are okay." They said, "We have some challenges." Um, and there's acknowledged that there's work to be done. So, they've never attempted to sugarcoat it. Um, and they've acknowledged um their works to be done. They've engaged the department heads. Um, and they don't compare us to other cities like this city's worse than us. Um, because I don't believe that they believe that this is a race to the bottom. Um, this really should be a race to the top. And I feel like from the interactions I've had with those two and other department heads, I do think that people appreciate that, you know what, there are some red flags. There's some concern. Um, we have the tools and the people that are committed to working on it. Um, it's not going to happen overnight. Um, but as long as we acknowledge some of where we are, I think we can then move forward. Um, red flags. And again, I'm not intending to be critical, but this is from my perspective um the reality of some of what we're facing. We all know about the $13 million spending by electric that was a surprise. Um we all have mentioned that we haven't been getting quarterly financials um since we came on um council. I understand from David that we should start getting those in April

or we will start having work sessions on them in April.

So we'll start start having some opportunity with Mary coming and you to um start with the the financials. So then um I know ERP's been a problem, but um hopefully we have enough of it implemented that we can actually get financial information coming to us on a regular basis. And Mary's shaking her head yes, so she feels good about that. There are parts of of what Mary's department has tried to do that we have um like the bank wrecks we have a contract with an outside group to do that and I know that's getting implemented but we've had to start looking at some outside resources to help our finance department um so that we can start getting information timely and accurate. And again these are just red flags that we know have been the struggle. We all know it. None of us are equivalent on it. Um we know that the annual city audits have been a little delayed over the last two years. Again, staffing timing, but it is something that um that we need to be committed to and it goes to the ERP system being having accessible information. Um a a concern by this council continues to be kind of the fiscal year end close. We won't know where this current year ends until May like where we end financially for five months after the year end closes for a variety of reason. So hopefully um as we get some um help in the finance department, we can look at how we get year and actual information a little bit more timely. Um,

I don't know that that's possible given how all of the whole thing works with invoices being paid and delays and Well, in many places you have a close and then you do another close. I mean, again, how we start getting um, you know, how we start getting, you know, having it five or six months later, you know, I think May from from the end of March to May is not five or six months.

Oh, I know. But they said um, August, September when we asked. So, it was August. So, as long as it's May, I'd be happy if a 60-day close would be wonderful. But I'm not sure that's that's not what I heard. Um because of that very thing, the invoice stuff. I would love a 60-day close. Um but if that happens, good. Um glad that there's Can you just ask Mary? Um yeah. Yeah. Mary, can you address that for us? what your

well we we will have quarterly information um that's basically unadjusted information and that will be given um in April so you will get the um basically everything that's in the system um and it just will basically be um everything that we have received for for the 12 months um it just won't be adjusted for your acrruels and stuff for year end acrruels because those typical typically we start doing those journal entries at the end of April and we really can't do those until like Nancy said in May and June when we start getting those reports in from other places. We don't even get the sales tax all the sales tax reports in until um the first part of June. So some of these things we can't do the journal entries on until we get those. Um the good thing is most of the time from one year to the next um those acrals don't vary by very much. Um it has to be something really big for it, you know, for it to be that big of a difference. Um, so what you're getting in April is going to be um a pretty good estimate of where we're at. I mean, yes, it can change. Um, the only big things that would change like in the enterprise funds is um you have um like depreciation that gets added um which is a bigger expense, but it's a non-cash item, but you can pretty much estimate that based on the year before. So it might go up by, you know, a little bit, but you can do some estimations. So, um, I I still think we can give you pretty decent numbers in April at least to to plan for, you know, plan going forward.

But, but the final document close is not going to happen till after that. But, yeah, I mean, we don't really do our close. I mean, we're still doing entries. Um the auditors come out in July and we're still, you know, doing some of those entries up until the point when they come out. Yes. Because that was they want those done before they come. So that a lot of timing and a lot then for us and again you've been good enough to give us some cash reports which is I know different than your final but but um you know your depreciation all that factors in after you get everything else. Correct. Right.

Great. Um again, um the the the debt that we're showing is at the 72 million, but with interest that's 110 million. Um so, you know, it's you know, you can play around with how you factor in the debt, but but we are obligated to pay the principal and the interest. So, we're looking at a 110 million. And we know we have some needs going forward with some of our other um programs. Again, this is my list of red flags, so you may not like them, but um we do have to acknowledge that Moody's downgrade happened this past year, and they did site, per the CFC report, governance is a key driver of this action, reflecting budget management practices that have materially weakened reserves and constrained financial flexibility. So again, it's incumbent on this council to work with um management so that we can make sure that we are doing our due diligence. And then they mentioned that the city could be further downgraded if there was continued utilization of reserves and interf borrowing especially from ongoing structural imbalances in the electric fund or a significant increase in the leverage profile. So again, those are some warnings to us and um I think um David and Mary and all involved understand that.

Yeah, I think that it's pretty obvious that that we've taken it very seriously and this council has taken it very seriously and there there's not going to be any kind of backpedaling on any of that. Right. And I'm just I'm just wanting the residents who are listening to hear this as well. So, we have a lot of conversations that we don't have on camera or video and um but again, I want them to know this council has been very serious about it. You mentioned how we went through a line item and cut and we're all going to be continuing in that path,

right? And that's what I want people to know. That's exactly it because we get it. Again, the debt service ratio, um Mary did these numbers for me. fiscal year end 25 um the um electric was negative.13 the enterprise funds was.74 again this is Mary's number that she was kind enough to do and this is our ability to cover debt obligations with operating in income again if it's below one it is uh suggests negative cash flow into some of what Mary's doing is showing us the cash flow um and then does the rest of her work So, um, you know, that's all part of something that are measures and metrics that we will keep track of and make sure that those actions we're doing now turn this tide. Um, capital, we've talked about capital delays in some of the projects and and David and his team have worked on those. Um, the fund balance has decreased over the last three years, but we're aware of that. Um, and again, I know staff are stressed. They're worried. Um, they're frustrated. Citizens are worried and stressed and frustrated. And there are a few of us on the council that are that way, too. Um, so I think we're all in pretty good company, but there are those, and I think everybody is working hard to turn the tide. I think we have a lot of um passion and expertise and willingness to acknowledge where we are and to move us forward. So, my goals is Nancy mentioned goals. My personal goals um that I'm going to add for this upcoming year is that I want to make sure that I have the ability to make informed decisions and um I I want the financial information so I can know the riskrewards and return on investment as

we invest both in um anything financially, human capital pro projects, all of that. And then I want to make sure or ensure that Kirkwood has the resources across the board to serve and meet the needs of this community and we address that accordingly. So I know there's strategic plan goals there that but mine are pretty down to basic like I want to make sure that we can do what we need to do with the team we have in place. That's it. I'm quiet. the additional council member Zimmer.

Yes, thank you. I want to make some comments and then just a just a few questions for the record. So, for the record, copy too, Zoe.

Yes, I'll get you a copy. So, for the record, I have been serving the city of Kirkwood on this council now for almost 10 years and four years on the citizen finance committee. I reviewed 15 years of city budgets. Many times over the past several years, particularly during budget season, I expressed my concern year after year after year of our ever rising expenses that were outpacing fairly flat revenues. Nobody said a peep. Now, Kirkwood has faced a fiscal budget challenge. I've heard and seen many negative comments, particularly on social media, how Kirkwood is facing fiscal ruin and stating that funds were misappropriated. This is false. Funds were significantly overspent in excess of budgeted amounts for capital infrastructure improvements for our electrical system. Now, I cannot tell you after making those comments all these years on this council how disappointed and disturbed I was as this council was when we found out about this overspending. Since then, I've had residents ask me, "How could we let the city's finances be in this shape?" First, let me reassure the residents of Kirkwood. Our city's financial situation is not ideal at all, but it's not a disaster. We all understand we have had a very serious budget issue. We've acknowledged this and we're dealing with this, but the time for saying how bad it is and feeding negativity and anything else that's not helping must

stop now. Kirkwood is fiscally stable. Now is the time for us to lead, be decisive, and be disciplined. We must continue to drive sales and revenues as well as maintain fiscal discipline now into the future. I'll tell you exactly how we need to do it, and in many ways, we've already begun taking action. We have reviewed and delayed several major capital expenditures and contracts, and most likely we'll need to keep doing so. our equipment, vehicles, tools, and other items may have to be used a little longer and not replaced as quickly as we've done in the past. We also need to review our grant process and maybe scaling back that process temporarily because that needs cash. Now, I have heard and read about multiple complaints about how our city has handled the grant process. The fact is, according to what I've confirmed with our city administrators, we've received over $20 million in grant revenues to fund city projects. That's incredible. That is a bonus and millions of dollars for the city of Kirkwood. This is much needed revenue. And team Kirkwood has done a fantastic job securing grant funds for this city. Our interim chief administrative officer, Mr. Widler, and department directors reviewed the budget and cut almost half a million dollars of non-critical expenditures for the next fiscal year, allowing us to provide raises for first responders to keep competitive and avoid reducing most employee positions. We need to continue this practice of reviewing budgeted amounts and making cuts when possible.

We also must continue to seek sources of new revenue, driving our expertise in areas such as dispatch, promoting our knowledge and our leadership and charging a premium amount for premium service. We must new use our new billing system to our advantage, ensuring there are checks and balances between finance, procurement, and departments to identify future budget variances. We should prominently post budget updates on our website to ensure transparency on a minimum quarterly basis. This budget here is the most conservative budget I've ever seen. Our spending is incredibly limited. Although we've taken action to erase the electric shortfall from our general fund and enterprise funds, it will take many years to build these funds up to acceptable levels. Many years. We must continue to approve fiscally conservative budgets in the future while providing Kirkwoodians the service they expect. This is going to require patience and discipline and that's what we need to have. Although the credit rating agency Moody's downgraded the city, we went from an AA1 to an AA3. This is still highra. This is the exact same classification, meaning Kirkwood still maintains a high quality credit profile. In fact, this rating has changed many times in the past according to our city's history. In 2009, it went to AA3. In 2012, it changed to AA2. In 2022, it was raised to AA1.

As the mayor said, we've taken action and will continue to take action and our budget actions should lead Moody's to consider more favorable ratings in the future. Now is the time for us to be positive, to focus on the positives of Kirkwood, to be decisive, to lead forward, pass this conservative budget, maintain fiscal discipline and conservative spending, drive sales and revenues in our city, be patient, and build up our cash reserves again. That's what we need to do. Sky isn't falling. This has been tough, but Kirkwood is still thriving. We live in such a vibrant, beautiful city with such fantastic employees, great neighbors, and excellent public servants that I share this DAS with. We are on the right track. We are fiscally sound. And now we need to move forward with this fiscal plan. Now, the questions I have on this, David, we've made several changes to the budget. I think as council member Jack Sedic said, we're on version four. Are there any other additional changes that have been made in the past several weeks to this budget that we've received since this version of the budget? Uh we haven't made any additional changes to it. Um, previous to that, we had made numerous changes throughout the work sessions that we've had since the um third meeting or fourth meeting in January through now. Um, but not in the not since the production of this before last week's.

Okay. And I I was glad to hear we did keep that position for finance. So, that's good. Um, now that we've talked about all this, uh, this is a question for Dave and maybe for Mary. Is there anything else that we need to do or that we've missed any opportunities for any further cuts or changes to this budget before we vote on it? There is a projected change um in one of our items for shifting some of the revenues back to the general fund. But beyond that, we have been extremely indepth in our detailed review of this budget and I don't perceive any additional changes beyond that.

All right. Thank you very much. Okay.

One more. So for clarification, uh the information that I received about appraisal versus comps on um when we purchased uh Leingwell property that was given to me by the administration prior to David and I was told that it was um done with comps, not with appraisals. That's one uh just for clarification and then two only because Mary brought uh up about depreciation. Um we have 11 years of old-mounted transformers sitting on the ground right now. Uh and I was holding off until Mary talked about depreciation. So, I thought this needed to be talked about that uh when we get our new electrical director in that maybe we I know we're going to take a loss, but we sell some of these transformers that we don't need. We don't need 11 years. The typical industry turnaround uh to get these polemounted transformers are less than 90 days, I'm told. Uh and most of these are going to be out of warranty anyway because they weren't fired up in the first 18 months. So you have no no guarantee or no recourse at this point in time. So I'm just making a suggestion that's about a million dollar worth of polemounted transformers that are sitting on the ground that we have that we're not going to utilize. So and it's depreciating out in value. So, I just hope that we look at that as a possibility that we could move some of that inventory that we have that we don't need that was over spent and bought. Thank you.

Okay. We'll wait for the new person to get here, which is pretty exciting that we will have absolutely

a new um director of electric. We are on the verge of having a new CEO. It is a time for all of us to, as Council Member Zimmer said, start being very positive about our city and the direction that we're going. I think we've really um done our due diligence and which is why Moody's didn't downgrade us past the first uh they have three different areas or four different areas classifications. Thank you. Didn't downgrade us past the first classification. So, um, it's a, you know, it's spring and spring is brings about a positive feeling and that's the way we're going to go from now on and go forward. We have a great budget and I want us all to vote on it right now. So, all of you that are in favor say I.

I. I. Nay. First reading um of the bill has passed. Thank you. um for just so we know David is there going to be a substitute bill drafted for those changes just so council knows there will be okay that'll be we'll provide that next week to everybody packet will go out tomorrow but we'll probably next week okay thank you

okay so on a positive we're going to stay on that positive note right because we're going into council member reports yes um yesterday I spent the morning in Jefferson City with the folks from Amtrak and from MDOT um about the Missouri Riverrunner. Um and I just we we are so lucky to be an Amtrak city. And I want to I really want to um acknowledge our leaders back in 2004 when Amtrak was going to close the station and we would no longer have Amtrak stopping in in Kirkwood. And our leaders thought had the forethought to purchase our station and create a volunteer group to run it with over 50 um members of the volunteer organization. And we now are the second busiest

wow station on the Missouri Riverr Runner um line only to Kansas City. So we are putting on every month we we have visitors and um passengers of about 4500 people every month um coming to Kirkwood. So, and then when we get our new station, which is it is going to be beautiful with Terzo floors and all the wood's going to be redone and the overhang, they found wood in the overhang. That's all going to be redone and wood put on the new um what do we call that? That goes out to the passenger shed, the passenger

and new canopy.

New canopy. It's it is going to be beautiful. So, um, and the one thing that's very cool about Amtrak in Missouri, we are the first ever Amtrak line that has its own mascot. Ali the Otter is the mascot of the Missouri River Runner. No one else in the country has their own mascot. So, and Ali has come to our station before. They have this cool um uh schedule with Ali on it. Ali's got his own pin. There's all kinds of cool things. Um we also, you know, it's a federal law that when there's an um a train track that's less than 750 miles, the state has to pay for it. So, the Missouri Riverr Runner, which goes from St. Louis to Kansas City and then eight stops along the way. Um we the state of Missouri pays for that. So every year it's um always kind of pins and needles whether the legislaturator is going to. But the reason that I was there yesterday is that we have Representative Travis Wilson who's actually from the St. Charles area but loves passenger trains is chairing the passenger rail caucus now. and we had six legislators come to a 7 a.m. meeting and listen to what's going on with Amtrak, with the Missouri Riverrunner. We had Ali appear um and so it was it's really a great thing and they have um the Missouri Riverrunner um economic impact study and I just want to read you just a few numbers. So the Missouri Riverr runner creates 1789 jobs. There's an income of 97,000

mil sorry 97 million, economic output of 4878 million and tax revenue of 43 million. So and you know some of that's coming to Kirkwood, right? Um, so it we really we really are so so lucky to have Amtrak in our city. We're lucky to have a beautiful station to welcome our our visitors. Um, we put a lot of students on the train going to um, Warrenburg, to school there, to Missou. Um, so I think it's um it's just something really positive that that we've got going on that nobody else in St. Louis County does.

So, Mayor, so and the current uh renovation and restoration modernization of the our beautiful uh train depot. I'd like to remind people that that project which Chris just under $6 million total 6.1 just over five that all that that project was paid for with 4.5 million I believe in um

federal grants um east from east west gateway a tap grant and then also um ARPA funds from the state of Missouri that came from the federal government during the COVID and then over a million dollars um from the historic Kirkwood Train Station Foundation uh which I've been a member of a board member almost since its in its inception. The project it is I mean I I am so excited about this beautiful building and and preserving it for the future. the new slate roof, the restoration of all the masonry, the new little storage building because the current baggage area um is being converted to um ADA restrooms and um it allows um for um caterers to come and use the facility. It's not just a train station. It'll it'll be a facility for visitors to come and use the restroom or see historical information inside or to rent it out for um whatever event. Um but um uh Chris, could you It was originally slated to maybe be completed by this June, but I'm thinking now that's been pushed a little bit.

But summer, yes, summer some sometime this summer May till September. Yeah. So, all right. We anxiously await. Yeah. And Okay, we're going to move on if anyone else has a console report.

Have one. I can't be nearly as enthusiastic as you two on that though. I will try. Um, Human Rights Commission, Monday, May 18th. Monday, May 18th. For those still listening, Justice Chief Justice Michael Wolf um is going to be speaking at the Cape Center. Who is Michael Wolf? He's helped save many men on death row, preserve the St. Louis school desegration program, end capital punishment for juveniles, protect the vote of poor people, establish jury trials and discrimination cases, preserve jury verdicts and personal injury suits, and foster efforts to rid St. Louis Municipal Courts of long-standing injustices. So, Monday, May 18th, 7 PM KPAC. Come check it out.

Thank you. Any other council reports? No. Okay. Um, I will say one more thing. Um, today is David's birthday. Tomorrow, actually. I'm sorry. Tomorrow. Tomorrow is David's birthday. And, um, yes. Happy birthday to you. Happy birthday, dear. Happy birthday to Oh, yeah. Yeah. Never sang a birthday. All right.

Also, I do want to acknowledge David has been phenomenal during this time. He's been doing two jobs. He's done an incredible job as our interim CEO. And I just want to thank you deeply for you're you're just pleasant. You have a grace about you with the way you handle everything. You've taken the concerns of this council and and made things happen. Um we just I just want you to know how much we appreciate what you've done. Thank you. I appreciate that. Happy birthday. Just one thing is tomorrow Friday the 13th. Oh.

Oh, sorry. Hey, are you taking tomorrow off? Oh, yeah. Good. Oh, yeah. Yeah, sir. Cake's an admin for his birthday. Come grab one. Yeah. Okay. Interim um chief administrator, do you have a report? I just wanted to make a quick comment, mayor and council, that I appreciate and value the level of input and support during this throughout this entire budget process I've received from you all. Um, and also I appreciate all of your support for our first responders and the dedication they have to our community. Thank you. Thank you for the attorney report.

Okay, city clerk report. I'll just uh ditto the mayor. Happy birthday, David. We appreciate you. That's all I have. Okay, seeing no further business, our regular monthly scheduled meeting will be on Thursday, March 19th. This meeting is adjourned. Okay. This thing.