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New state traffic ticket cap a factor in 2 villages' switch to city status

Gov. Nixon sings reform bill

Missouri Gov. Jay Nixon signs a bill capping municipal court revenue and imposing new requirements on the courts. He signed the bill on Thursday, July 9, 2015, at the Old Post Office building in St. Louis. Photo by Robert Patrick of the Post-Dispatch

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ST. LOUIS COUNTY • Concern about a new state cap on traffic-ticket revenue is a factor in two small municipalities’ pending switch from village to city status.

Officials in Velda Village Hills and Bel-Ridge, where voters approved the change on Tuesday, say the legal authority of cities to impose a wider array of taxes and business fees provides more financial flexibility if ticket revenue drops significantly.

“Because we’re strictly residential, we have to look at all components to make sure we stay viable,” said Earlene Luster, who chairs the board of trustees in Velda Village Hills.

Under the new state law passed by the Legislature last spring, minor traffic tickets can provide only 12.5 percent of a St. Louis County municipality’s general operating revenue, down from the former 30 percent ceiling. That change begins in January.

Luster said the new law, which also imposes other changes on municipal courts, “was a great influence” in her board’s decision to put the city status proposal on the ballot.

In Bel-Ridge, board chairwoman Rachel White said the ticket revenue cap was just a small part of the reason for seeking city status. She said other issues were more significant.

Among them: Becoming a city lets Bel-Ridge residents elect their top official — the mayor. Under the village setup, the top official — board chair — is picked by other trustees. Still, White said the added financial options will help.

Three other villages in the county previously moved to city status in the last year although only one, Calverton Park, has followed up with a new tax aimed at offsetting new restrictions on traffic court revenue. Seventeen St. Louis County villages remain.

Steve Ables, deputy director of the St. Louis County Municipal League, said fourth-class cities — the type Velda Village Hills and Bel-Ridge are becoming — can impose a tax on utility bills beyond just electric bills. Villages can’t apply such a tax to natural gas and phone bills.

Ables said such cities also can levy a higher municipal property tax of up to $1 per $100 assessed valuation. The maximum rate for villages is half that.

In addition, Ables said, state law outlines a much longer list of types of businesses that can be subject to city licenses and fees.

Financial reports filed with the state show Bel-Ridge got 22.1 percent of its general operating revenue last year from traffic fines and court costs and 28.9 percent in 2013.

That’s below the 30 percent maximum in place then but above the 12.5 percent standard that kicks in next year.

White, the Bel-Ridge official, said her municipality and others likely will do some belt-tightening to help meet the new requirement. However, she said her board has no plans to seek voter approval for any increase in residents’ taxes but is likely to consider pulling in additional revenue from businesses.

Velda Village Hills was below the new 12.5 percent maximum each of the past two years, according to its reports. Traffic fines and court costs made up 8.3 percent of the community’s general revenue from April of last year to April of this year and 7.7 percent the previous one-year period.

However, Luster, the Velda Village Hills official, said the added taxing authority gives municipal officials “a little bit more wiggle room” financially for the future.

She said, however, there are no plans to actually seek more taxes. Luster also said her community plans to keep the word “village” in its official name despite the shift to city status.

Velda Village Hills, a community of about 1,100 southeast of Natural Bridge and Lucas and Hunt roads, was incorporated in 1945.

Bel-Ridge is a few miles west, near Natural Bridge and Interstate 170; it has about 2,700 residents and began operating in 1947.

Voters in Calverton Park, a municipality of about 1,300 just northwest of Ferguson, approved shifting to city status last November and then in April passed a new gross receipts tax on utility bills.

Mayor James Paunovich said proceeds from the new tax probably will offset lower traffic court revenue. “We think it’s going to be a wash, tit for tat,” he said.

He said his city’s primary goal with the tax is to keep its police department, and beyond that, to remain an independent city. The municipality’s last report to the state said traffic court revenue made up about 25 percent of operating revenue from mid-2013 to mid-2014.

An official in Bel-Nor, where voters in April approved shifting from village to city status, said new caps on traffic fines being discussed by state lawmakers didn’t play a role in that decision.

Bel-Nor’s report for last year said traffic court revenue made up about 10 percent of general operating revenue.

Bellerive Acres also voted in April to become a city. The community cited an 18.2 percent total last year but Mayor Ann Knapp said last week that officials aren’t worried about meeting the new lower standard. She said they are toying with the idea of a future tax on electric and natural gas bills.

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