Administrator Mike West opened the forum with some updates and information regarding the city finances:
"The last year or so has been particularly challenging with the COVID virus. As a city, we weren't sure how this was going to affect our operation or cash flow so we have been careful not to expend any additional monies for projects that could wait until the end of the pandemic was in sight. Revenues for Butler during this time were pleasantly on track with what we budgeted for. We continue to put some monies aside to make sure we have enough resources for the unforeseen circumstances, day to day operations yet keeping some projects on track.
The city of Butler finally sold its industrial park spec building at the beginning of 2020 to Local Leaf, LLC. This move created numerous jobs and revenue to the community.
Last year we lost a once key employer, Russell Stover. The unique facility would have been difficult to fill if it wasn't for a combined effort to several agencies including the Missouri Partnership and the city of Butler to fill the Russel Stover facility with a new company FFE (Frozen Food Express). FFE will be investing over 6 million dollars in Butler and creating almost 60 good paying jobs for the community. On June 9th, the governor will be here for a ribbon cutting of the facility and welcoming FFE to Butler and Missouri.
Burger King will be joining our community this Fall. We have been informed that the sale of the property is complete, and construction should take place within the month. Butler has seen several new retail businesses open even during the Covid shutdown including the Meat Shoppe, Luna Umbra Winery and Tu Casa Mexican Bar and Grill.
Upcoming projects include roads, which are always a hot topic. The crews do a great job with what resources they have to maintain and maximize the longevity of the streets in Butler. The current program for overlay and sealing roads is determined by the amount of money the transportation sales tax generates. Butler staff generates a listing of roads to be repaired each year as part of a five year forecast. Roads are selected based on current condition, future condition, traffic flow and general budgetary priorities. Based upon current sales tax revenue for transportation, the city usually attempts to spend $300,000 to $350,000 dollars per year on road projects. Unfortunately, these funds are mainly used for primary streets which leaves little for secondary roads. If we find we have leftover funding, we will use this money to address as many secondary streets as possible with either a cold mix or chip and seal.
One project that has been delayed by Covid is the AMI (Automated Meter Infrastructure) metering program. We are still evaluating our options on this program. If you aren't familiar with AMI metering, it is radio/internet-based system where our water and electric meters can be read in short increments of time. Usually every five minutes. This information and system allow us to monitor usage for possible outages and leaks so we can be proactive in resolving the problems. Eventually we will be able to offer more services to our customers like prepay electricity and even hourly billing. This will allow the customer to have more control over the cost of electricity they use.
We are in the process of finishing a preliminary feasibility study for a public safety facility. This would house both the police and fire departments. Both departments are operating in antiquated facilities that were never designed as a police or fire department. We are hoping to secure grant money to help offset some of most of the cost for the facility.
A hot topic recently has been the sidewalk in the West Fort Scott area. This has been an off and on topic with the city since 2012. Realizing that a pedestrian lane under the railroad overpass is cost prohibitive, we are looking at other options to connect a sidewalk to Orange street. We are continuing to work with MoDot to seek a solution and help with the cost. Preliminary costs for a sidewalk from Prospect street to Walmart is over $600,000.
The city council and planning commission have been discussing the idea of updating the comprehensive plan for Butler. The last plan was done in 1982 and has not been updated since. The cost of this would be in the $30,000 to $40,000 range. In 2011, the city had prepared a vision statement that was done by Hammons School of Architecture. Although an idea, this is only a part of what a comprehensive plan is. And such a plan is an important tool for any community. Without short and long term goals moving in a certain direction, you are setting yourself up for moving nowhere. In today's environment it's important to have constant direction for the staff, council and community. The staff changes. The council changes. But if you have a solid comprehensive plan, the overall direction of growth stays.
Another item that will need to be addressed is the use tax that was narrowly defeated in the last election. This use tax is nothing more than a sales tax on purchases online if it's not already being charged. The city is currently losing an estimated $225,000 per year due to not having this tax. Not only is it hurting the city's coffers, it is hurting our local businesses. It gives the online out-of-town businesses an advantage over the same people you see every day. Those same businesses that are asked to employ community members and support all the clubs and activities that provide for you.
Here's an example: If a person in Butler needs to buy a wrench, they can go to a store in Butler and purchase it. When they do, the state and local taxes in Butler will apply. If they drive to a big box store in Belton to buy the same wrench, the same state sales tax will apply but they will pay Belton's local sales tax rate. If they order the item online from that same big box store, the state sales tax will be the same, but the store's shipping terms will determine whether the buyer will pay Belton's local sales tax. Many retail stores consider the transfer of property complete when the customer receives the item purchased, so in our scenario, we would assume the state sales tax would be charged, but no local retail sales tax would apply because the actual purchase did not occur in Belton and Butler has no use tax to offset the sales tax. Don't be surprised if the the tax question is on the ballot in the next general election.
Other concerns are revenues regarding water and sewer rates. First, I'd like to address some misconceptions about Butler's utility rates that I've seen posted on the internet. Butler has some of the cheapest rates around. If you take the U.S. average household electricity use of 909 KWH per month, it would cost a Butler resident $109.74. The same usage for an Osage Valley customer would be $126.45. That is a savings for a Butler resident of $16.71. Water and sewer rates are extremely cheap when compared to other communities. As of now, a resident of Butler would pay $23.68 for water and $32.60 for sewer for 4,000 gallons of water (average) used per month. The same in Harrisonville will pay $40.02 and $45.17; compared to Nevada and Lamar, Butler this cheaper by $23.28 and $28.81 respectfully.
Now the issue regarding water and sewer rates. At the beginning of 2007, the city of Butler increased water rates due to the lost water sales to PWSD #6. This lost revenue was needed to adequately fund the water department to ensure payment of bonds. The council at that time increased the base rate from $8.50 to $10.00 and the water rate from $4.20 to $4.56. In the last thirteen years, Butler hasn't increased water rates.
Revenues from water sales have been flat due to decreasing use in the last 13 years. Some of this is due to weather conditions. However, most is due to the decrease on customers and better conservation by consumers. Average revenues from 2007 to 2011 was $1,115,104.00. Average from 2015 to 2019 was $968,160.00. That's a difference of about $147,000.00 a year.
Expenses for Butler water is a fairly fixed cost. The main difference I could find was the amount of work year to year on the distribution system and water plant repairs. One can only assume as both systems age, we will continue to see increases in replacement and repairs. Between 2007 and 2011, the average total expense was $1,133,571.00 per year. The average expenses between 2015 and 2019 was $1,198,939.00.
Since 2009, the water utility has consistently lost money. The last five year loss average is $230,782.00 per year. Well over a million dollars total.
The operation of the sewer utility is just about the same as the water. So what we are proposing to the council this year is to increase the base rate for water to $14.00 and $5.56 per thousand. Along with this, an additional $.25 per 1,000 gallons to $5.56 per thousand. Along with this, an additional $.25 per 1,000 gallons every year for the next 3 years. Sewer rates should also increase by $.25 per 1,000 for the next three years as well. Out of town rates should also be adjusted accordingly for both water and sewer. Just note that these increases will still leave Butler rates lower than any community we mentioned".
At the close of the administrator's statements, questions and comments were taken from the floor:
-Concerns about reliability of electricity. Seems power goes out frequently, some would be willing to pay more for reliable power. Response was that the city is taking steps greatly reduce this problem, squirrels are a huge factor in outages and cages are being added often to alleviate the problem. It was noted that having a city electric department instead of it being handled by an outside source, response time is much quicker especially when there is a major event such as a storm that moves through the area.
-Where does the money come from for renovation at city hall? $20,000 was previously set aside for the project.
-Can anything be done about pigeon droppings around the entrance to city hall? Bird spikes have been installed, they somewhat work but aren't 100% effective. Other ideas are being reviewed such as trapping and relocation.
-What's the status of finishing Sunset Park? All equipment is on site ready for install and set up. Right now it's a matter of pulling personnel from other duties such as mowing to get it done.
-Can policing be increased to stop speeding, especially in key areas where children play and walk? Yes, it will be looked into.
-If the city increases water and sewer rates to what was proposed earlier, how much will that help? It will allow the city to break even on costs.
-There are a lot of water lines in need of replacement in town. What's the plan? There is a lot of work regarding water lines already in the budget for this year.
At the close of the meeting, several council members spoke about the need for everyone to continue to work together and put together a comprehensive, long term plan for the city that will span well beyond the current council and administration that would be of benefit many years to come.
If you couldn't make it to Town Hall, remember the Butler city council meets on the first and third Tuesdays, 7 pm at city hall.