This section presents summary information on the FY1998 budget of the City of St. Louis. The discussion that follows describes the economic outlook for the City and region and presents a detailed review of the general operating fund budget as well as budgets for enterprise and special revenue funds. This section also includes summary tables of sources and uses of funds for all fund groups and describes the major sources of revenue for FY1998.

ECONOMIC OUTLOOK

The U.S. economy continues to grow at a steady pace. In 1996, GDP grew by 2.5% which is somewhat higher than was expected at this point in the business cycle. The 1996 rate of inflation remained under control at slightly under 3% for the year. The national unemployment rate recently dipped to 5.2%, a mark which is equal to the low point in joblessness for the current expansion. Over the next twelve months, economic growth is expected to continue albeit at a slightly slower pace as the tightening labor market and a potential rise in inflation are met with moves to increase interest rates.

The state of Missouri has witnessed significant growth in the number of jobs statewide over the past few years. The St. Louis area in particular is benefitting from this trend with recently announced plans from Union Pacific and Mayflower to move 600 and 500 jobs to the area respectively. Furthermore, most analysts do not expect the pending merger between McDonnel Douglas and Boeing to result in any net job loss to the St. Louis area.

In its 1998 budget, the State projects that the Missouri economy will show continued growth with personal income expected to rise in the 4.25 percent range in fiscal 1998. Employment is expected to remain stable and the Missouri unemployment rate is expected to be slightly lower than the rest of the nation.

The City's Annual Operating Plan and budget plays a pivotal role in promoting the vitality of the local economy by providing essential services and maintaining an infrastructure that increases the productivity of local labor and capital. These services and infrastructure help promote growth in economic activities that bring new dollars into the metropolitan region that in turn produce jobs and income for residents and just as importantly, revenues for the City. The St. Louis area economy can be characterized as a mix of local export industries such as automobiles, medical and defense technologies with growing service and tourism industries.

The St. Louis Metropolitan area has a total population of about 2.5 million people. Recent estimates put the City population at 362,000, or just under 15% of the regional total. With just under half of the region's office space, downtown St. Louis has the single largest concentration of employment in the area. According to a recently published report by Fortune Magazine, the St. Louis Metropolitan Area ranks sixth among America's largest cities as a place to live and work. Quality of life issues such as reasonably priced housing, short commuting times, quality public transportation, private and parochial schools, low crime and the availability of cultural activities are among its major assets. Additionally, the region ranks as the nation's seventh largest corporate headquarters market with 22 Fortune 1000 corporations located here.

During FY1998, the City will realize the benefits of a number of on-going public construction projects among them the new $180 million Federal Courthouse, a $76 million City Justice Center and the $46.8 million mixed income housing development project at the current Darst-Webbe public housing complex. Having recently completed a $19 million bond issue for Forest Park improvements, the City will also begin seeing the first of many improvement projects underway in accordance with a plan to restore Forest Park. The Forest Park Master Plan calls for a total $86 million from both public and private sources as an effort to restore the park over the next six years.

A number of private construction projects are also either underway or planned including the $30 million expansion of the A.G. Edwards headquarters complex, a $24.5 million facility and headquarters for Sigma-Aldrich Chemical Co., and a $225 million renovation and construction project at BJC Health Systems.

During FY1998, relocation activities will begin for employees of the U.S. Army's Aviation Troop Command known as "ATCOM". While this represents a loss of jobs for the City, the federal government has approved grants to assist ATCOM workers with job placement. In addition, the General Services Administration has committed to relocate other federal agencies to the ATCOM site in order to restore employment levels in the near term to at least 80% of prior employment at the site. As part of this commitment, the U.S. Department of Agriculture has made plans to move approximately 600 employees to the ATCOM site during 1997.

The City also received welcome news that the St. Louis Regional Commerce and Growth Association (RCGA) was successful in arranging the relocation of approximately 600 Union Pacific Railroad jobs from Denver to downtown St. Louis

Over the next year, The St. Louis Development Corporation (SLDC), will continue its efforts on major projects such as the development of the Arena site and selecting a developer for a new convention hotel. Small businesses will also be served by such programs as the SBA 7A Loan, Micro Loan, Revolving Loan Fund and tax abatement programs.

Through promoting the growth of businesses such as the export industries and providing the essential infrastructure for the local meeting and tourism industries the City will hold the key to maximizing its role as the region's economic center as well as maintaining a healthy fiscal position.

FY1998 OPERATING PLAN - ALL FUNDS

The total budget for the City of St. Louis for FY1998 is $622.6 million. The City divides budget appropriations into three fund types. These are:

• General Fund: The General Fund is the general operating fund of the City and accounts for all financial transactions not required to be accounted for in another fund.
• Special Revenue Funds: Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. This category includes federal and state grants.
• Enterprise Funds: Enterprise Funds are used to account for operations financed and operated in a manner similar to private business enterprises - - where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the public on a continuing basis be financed or recovered primarily through user charges.

General Fund expenditures account for more than one-half of all City expenditures. As the general operating fund, expenditures from the General Fund pay for the majority of services delivered to and paid for by citizens. These include administrative costs as well as more visible services such as police and fire protection, emergency and other medical services, and maintenance of parks and streets.

Special revenue funds provide for a variety of items and functions ranging from expenses on the City's general obligation debt, to property tax assessment, to development of the City's riverfront. Expenditures from enterprise accounts represent nearly one-fourth of total expenditures and provide for operations, debt service and capital improvements for the City's Airport and Water Division.

• FY1998 Budget by Fund
• FY1998 Budget by Department
• FY1998 Budget Summary by Fund (Sources and Uses)