Joplin City Council Informal Meeting - January 21, 2025: Sales Tax, General Fund, Finance Update
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Joplin City Council Informal Meeting - January 21, 2025
The Joplin City Council held an informal meeting on January 21, 2025, to receive updates on sales and use tax revenues, the general fund's revenue and expenditure status, and the finance department's operations. Discussions centered on declining sales tax, use tax allocation, financial sustainability, and delays in implementing a time-and-attendance payroll system.
Discussion Items
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Sales and Use Tax Update (Presented by Leslie):
- Sales tax for January 2025 was down 6.65% compared to January 2024; year-to-date (first three months) down 0.45%, essentially flat.
- Use tax for January was up 6.4%; year-to-date up 4.2%. Leslie noted that the growth rate is likely to moderate because Wayfair-related collections have largely stabilized.
- Marijuana tax for the month was up nearly 118%, but this was attributed to timing differences in remittances. Year-to-date comparisons remain difficult as the tax is relatively new.
- The quarterly comparison of the top 100 businesses (November through January) showed increases in mall, restaurant (slight), discount stores, hotels, and North Park Crossing/1717 areas. Decreases occurred in restaurants (significant), construction/home improvement, motor vehicles, convenience stores, and general retail.
- Councilmember Jackson asked about the county’s approach to using marijuana tax revenue versus the city’s approach. Leslie explained that the city uses marijuana tax in the general fund for operations, pay increases, and capital replacement, similar to the county’s intent. However, the county’s marijuana tax is currently on hold due to a legal challenge.
- Councilmember Jackson raised concerns about the city’s policy of restricting use tax revenue to specific capital improvement funds (e.g., parks, stormwater) rather than placing it in the general fund. He argued that the ballot language does not mandate such restrictions and that the general fund needs more resources. City Manager Edwards clarified that the allocation is a policy decision for the council, not staff. Jackson expressed frustration with staff recommendations that conflicted with the ballot language and finance committee reports.
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General Fund Revenue and Expenditure Report (Presented by Leslie):
- A new monthly report requested by the city manager and finance committee, showing general fund operating revenues and expenditures excluding use tax (which is restricted per voter promise).
- For 2025, operating revenue budget is $5.9 million; actual year-to-date (two months) is $5.2 million (under budget due to timing lags). Operating expenditures budget is $5.9 million; actual is $4.8 million (also under budget).
- The report shows projections for 2026–2028, indicating a structural deficit where operating revenues fall short of expenditures, meaning one-time funds are needed to balance the budget – described as not financially sustainable.
- Councilmember Copeland asked about the burden of producing the report monthly; Leslie indicated it should not be time-consuming going forward.
- Councilmember Haase asked why use tax is excluded from the general fund report; Leslie explained it is restricted by voter promise.
- Councilmember Kobe noted that the unrestricted fund balance (currently $21 million) is used for one-time purchases like fire trucks, and asked for a replacement schedule to understand future demands. City Manager Edwards agreed to provide a broader schedule.
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Finance Department Update (Presented by Leslie):
- Leslie outlined the finance department’s charter duties, key functions, and staffing statistics: 3 employees handle various tasks; 282,000 utility bills issued annually (2 employees); 22,000 payroll checks (1 employee); 2,600 accounts receivable bills and 6,600 purchase orders (1 employee); 10,000 accounts payable checks (1 employee).
- The department is fully staffed.
- Key initiatives for 2024–2025: vacant lot inventory/county lot transfer program (action plan strategy 7 & 8), transitioning to online business license renewals, coordination of grant applications and reimbursements, developing financial policies (including unrestricted fund balance reporting), implementing time-and-attendance system (pilot started October 2023, going live in finance department January 25, 2025), migrating to online billing permit system, improving financial communication via website and popular annual financial report, transitioning tier-two employees to vest in February 2025, developing a new internal budget process, audit follow-up, opioid settlement fund planning, renewal of half-cent sales tax, expanding external financial reporting, and implementing new GASB standards.
- Councilmember Copeland asked about succession planning; Leslie expressed confidence in AJ to step in, and noted training for younger staff.
- Councilmember Jackson asked about the opioid settlement fund amount; Leslie said it is still being determined and will be presented to council.
- Councilmember Jackson expressed frustration over the time-and-attendance system implementation timeline (started procurement in summer 2023, going live in early 2025). He requested direct contact with the vendor to ask about standard implementation time for a city of Joplin’s size. City Manager Edwards offered to share the vendor’s playbook. Councilmember Shaw advised against multiple councilmembers contacting vendors directly. Mayor supported getting the information through proper channels. Councilmember Copeland acknowledged the delay but supported a methodical rollout to avoid payroll errors.
Key Outcomes
- No formal votes or binding decisions were taken during the informal meeting.
- City Manager Edwards agreed to provide a fire truck replacement schedule (and broader asset replacement schedule) to the council.
- City Manager Edwards offered to share the vendor-provided playbook for the time-and-attendance system with the council.
- Leslie committed to continuing the monthly general fund report and working on showing committed portions of the unrestricted fund balance.
- The council discussed but did not vote on changing the use tax allocation policy; it was noted that any change would require a council vote.
Meeting Transcript
Good evening, everyone, and welcome to the Joplin City Council informal meeting. Let's kick this meeting off tonight with the sales and use tax update, please. Good evening, Mayor. Council. Hi, Leslie. You look at January of this year compared to January of last year, we are down 6.65%. So for uh the first three months of the year, we're down 0.45%, essentially flat. Um we will see how Christmas sales come in next month. Uh when we when we get later to our quarterly um graphs, it'll give you some insight um as to what businesses are what areas are being uh are down. Um use tax. So for January, um we're up six point four percent. So for the year we're up 4.2 percent. I do think that um we won't see the magnitude of increases that we've seen in the past for a couple of reasons. You know, wayfare has been in place now for a while, and I think most businesses are remitting that at this point, and then it's it's not so new uh for us anymore. So those businesses that should be collecting it are collecting it, and so now I think it will just be regular growth. And then marijuana tax. Um recall, and and as you can see, last month was down, so I think while we're up a hundred, almost 118% for the month. I think it was timing between um somebody who remitted um in December and January. Um, as far as how much we're up for the year, um in comparison last year, this was our first two months, so um it's hard still to compare month to month, uh year to date. Um I think we're pretty stable there as we saw at the end of 24. And then we have the quarterly comparison. So as a reminder, this is just our top 100 businesses, it's not all of the businesses, um, but this does capture the majority of our businesses. Um and this represents November November through January. 24 is in the pink, uh 25 is in blue. So you can see uh the mall, restaurant up just a little bit, discount stores up, um, hotel motels up, North Park Crossing, 1717 are up, uh, and then other, but then we have a lot of categories that are down, a lot of our normally uh normal categories that are up. So restaurants down significantly, construction and home improvement, motor vehicles, um, convenience stores, and general retail, all those down for the first quarter, and so that helps helps understand why our sales tax is down. Any questions on sales tax sales, use tax, marijuana tax? Council, Mr. Jackson. Uh Leslie, I was wondering of the year. Of course, now I know it's currently on hold for the county, but the county was able to look at how they were implementing the incoming use tax along with the marijuana tax to do more countywide in terms of just you know employee pay and changing that structure. I know that we have been using the marijuana tax to kind of fill the void of losing sales tax off machinery from industries, but obviously the county would have had that same hole. So are what are they doing differently than we are that's allowing them to have that flexibility from that tax revenue uh from marijuana tax? Correct. Um because obviously they would have lost the same revenue we did. Yes, so I think the county is on hold on their marijuana tax because right now they're they're being challenged on whether they can even collect that tax. Correct, correct. But what I'm saying is hypothetically they were looking at how that could you know infuse more capital into their operating budget to do you know pay increases and such. So if they were looking at that and they had the same revenue loss that we did from machinery for industries, I'm just curious what what are they looking at differently when it comes to that revenue than we are? I think they're just saying it differently. So marijuana tax goes into the general fund, and essentially that's what we're using it for. Okay. Pay increases, capital replacement, um essentially the same things that that they are. Okay. They're just they're just I I would have to look back to see how long it's been since they've given raises. Um it may be that they weren't able to give raises, and now because of that revenue source, they may be able to. I I'm I'm not sure I would I would have to look into that. Okay. And like I said, I do know the whole legal challenge is kind of put on hold, but that was the original anticipation, and I was just we do get a lot of questions about that, you know, tax revenue, and I know we often explain that, but yeah, but I mean when I look at that, they would have lost that same revenue we lost. Right.
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