Mexico will have to work with a tighter budget in 2021 due to the COVID-19 pandemic. Because of this, the city is trying to keep from increasing certain bills for residents.

The Mexico City Council on July 29 met with city staff to start initial budget discussions for the 2020-21 fiscal year. The proposed budget uses a separate funds format for budgeting, with the various funds acting similar to individual businesses under the overarching budget.

The city wants to avoid increasing its wastewater and sanitation rates. There are considerations, however. If the council were to request income increases for city staff, it could affect the wastewater rate.

Dayne’s Waste Removal of Martinsburg is seeing increased rates at the landfill based on the tonnage of waste removal. They city is not required to apply the landfill rate increases into its 10-year contract with Dayne’s.

If the city does not include a portion of landfill fee increase, citizens could get hit with a sanitation rate increase of $0.64 per month in 2024. City staff proposed doing a portion of the total increase over the next few years to build up to the landfill fee rate when the contract with Dayne’s is renegotiated. Dayne’s currently offers the best removal rate with the most services when compared to other providers, City Manager Bruce Slagle said.

If the council decides to conduct the percentage increase for the landfill fees, it likely would match the regularly yearly increases that happen in April.

The council will have to make a decision on the city’s tax levy this month ahead of the Sept. 1 deadline for setting local tax rates. A change to the tax levy may happen. After the tax levy is set, the council then can approve the 2020-21 budget in September.

“We are required to show you in our financial reports how we spend money, versus profit issues,” Slagle said. “We don’t really earn money, it is about services to the citizens.”

The proposed 2021 budget includes estimated revenues of $16.5 million, and estimated expenditures of $18.1 million, a difference of about $1.6 million. Some funds will have carryover funds and other fund transfers help make up that difference for the city to have a balanced budget, Slagle said. Other reasons for the higher expenditures is some capital improvement projects planned for 2020, but occurring in 2021, such as Fairground Pool.

It also will take a few more months to truly see the budget impacts of the coronavirus pandemic, Slagle said.

“We are trying to deal in facts in how we are dealing with it and not have knee jerk reactions to it,“ he said. ”It is going to be a tight budget, but we can make it work. We are working very lean and condensed, but the budget is balanced“

Issues affecting the 2021 budget are property values; sales and gross receipt taxes; recurring expenses and equipment costs; Proposition B, which annually raises minimum wage $.85 cents until 2023; the county’s unemployment rate; Missouri Department of Transportation Funding; internet sales and the use tax.

“We have a lot of decreasing revenue and increasing expenditures,” Slagle said.

Property values in the county have declined, which could lead to a change in the tax levy. The updated levy is not yet known.

Total assessed values in 2019 was $158 million, while they were $155 million in 2020.

Property taxes are based on a percentage of property values. The current tax rate is $0.72 per $100 assessed value. The city used this rate to craft the proposed budget.

“The formula we are going to wait and see where that comes in at,” Slagle said last week. “Hopefully we will know in a couple weeks where everything is at. We know the rate will not be any less than where we are at right now.”

The city expects an annual rate increase to its property and liability insurance of 15%, dental insurance of 10% and health insurance of 15%. Staff rates are stable and the proposed budget does not include a raise.

The city provides funding to some local agencies and organizations. The city plans to continue to provide the same funding rates as in previous years, even if those organizations requested more money.

One exception was for Handi-Shop Inc. for its recycling program. It has reduced services to cardboard recycling only, but requested around $19,000 from the city. Because there was a reduction in what the Handi-Shop collects, the council settled on providing $12,000 in the next fiscal year.

The city plans to seek some outside revenue sources, such as state percentage matching grants or local source grants for certain projects, such as for some park trails.