The City of Salem Board of Aldermen met for a special meeting on Monday, June 30. The meeting was announced at the prior regularly-scheduled board meeting on Tuesday, June 24. In discussion were electric utility rates, a change order for the Downtown Project, and the adoption of the city’s annual budget beginning July 1, among other items.
In attendance included Mayor Greg Parker, board members Nathan Kinsey, Rick Letchworth, Catherine Dent, and John Whelan, along with city administrator Sally Burbridge and city clerk Tammy Koller.
The board was presented with the proposed annual budget the Fiscal Year beginning July 1, a balanced budget with a surplus of $1,066,376, shared the staff summary. The budget presented has proposed revenues of $27,800,760.10; anticipated expenditures of $26,734,384.17; and intergovernmental transfers of $3,922,460.78, shared finance director Stacey Houston.
Six funds will utilize prior year fund balance, totaling approximately $800,000. The use of prior year funds was not initially discussed at the finance or capital improvement committee meeting, as it was initially anticipated that the Downtown Project would be completed; however, it remains open with carryover expenditures and revenues in the new budget year, approximately $33,209 of prior year fund balances, said Houston.
Two new funds were added to meet the State Revolving Fund (SRF) requirements, including a sewer debt service fund and sewer revenue fund.
Increases budget wide included a 2% Cost of Living increase for all city employees and up to 1% merit raise, for those whose merit evaluations warrant it.
During the board discussion of the proposed budget, Kinsey noted concern on the airports budget and its allocated funds and proposed capital improvements, notably the inclusion of a $5,000 automatic airport gate, expressing doubt as to whether the gate was a need versus want. Whelan proposed the new gate was to aid in city liability concerning unauthorized use of the facility, as it is currently padlocked with a chain. Kinsey noted that the airport budget also includes the approximate cost of a $2,500 security camera system, which should alleviate the unauthorized use.
With that being said, the discussion ended. Parker asked for a motion, and Letchworth provided the motion—with no second. With no second, the motion failed for lack of a second.
“Forgive me—could we get some direction then on this?” asked Burbridge, seeking clarification from the board. “If you all, as a board, are not going to approve the budget—where do we, as staff, need to go with this?”
Whelan shared he was not clear on whether the motion included the gate. Burbridge shared the motion, as presented, included the budget in its entirety—including the gate. With that in mind, Kinsey made the motion to approve the budget in its entirety with the removal of the $5,000 gate. There was no second for Kinsey’s motion, so the motion failed for lack of a second. Parker asked the board if it had any direction to give staff. Whelan shared he was a proponent of the gate’s inclusion and would have seconded Letchworth’s original motion had he known the gate was included.
As Letchworth could not make the motion again, Whelan made the motion to approve the budget, as presented, with the following vote: Kinsey, no; Letchworth, yes; Dent, no; Whelan, yes. With a tie, the mayor had to make a vote, ultimately approving the budget, as presented.
“Just a reminder to all of our board members, and some of this being your first budget process — there's a lot of stuff that always carries on to a city's budget throughout the year. And it's up to the board members to choose to vote or accept any expenditures from the budget," shared Parker. "That said, I will vote yes, and I will give you guys the option throughout the year to choose to vote for stuff or not to vote for stuff. I just want you to keep that in mind. You guys are the vote for the financial spending of the city."
Electric utility rates
First up in discussion was the electric utility rates, which included a long list of bills amending city codes—only the first read, however, so they will be heard again on the upcoming board meeting Tuesday, July 8.
Burbridge informed the board that an electric cost of service or rate study was conducted during the past year, concluding in February 2025 by UFS Utility Financial Solutions, LLC. Recommendations were provided to the board from UFS for electric rates moving forward, including residential, commercial, and demand rates. Notably, the UFS recommended the addition of a Service Availability Fee (SAF), varying depending on customer classification: $8 for residential and $12 for both commercial and demand, per month.
In addition, UFS recommended a reduction in kwh rates of 2% for both residential and demand customers and an increase of 8% for commercial kwd rates for the next three years.
Therefore, Burbridge and staff presented two options for the board to choose from—keeping the rates the same or adopting the tiered rate system as recommended by UFS.
The first option would also require the adoption of a changed ordinance establishing a timeline for when customers are changed to demand metering. Currently, shared Burbridge, the ordinance reads that any customer who uses 25 kilowatt demand or more be designated a demand meter. The changed ordinance, as proposed, would establish parameters and a timeline for the demand designation of customers, said Burbridge. No matter which option the board decides, the addition of parameters for demand customers would be included.
Letchworth asked for the purpose of the proposed SAF, as previously the fee would go to the city’s reserve fund. Burbridge answered that the SAF, as proposed, would help cover the cost of upgraded infrastructure for providing service.
“The reason for Service Availability Fees, and the reason most utilities have them now is an understanding that there is a cost to the utility—whether [the city] deliver one kilowatt hour or a thousand kilowatt hours—there’s a cost,” shared Burbridge.
With no further questions, Koller read the list of ordinances. The next aldermen meeting, held Tuesday, July 8, would be when the board would vote on which option they would like to pursue. More information, including the 20-page UFS report for the electric cost of service study and financial projection for the City of Salem Electric Fund, can be found in the packet for special aldermen meeting, located at https://www.salemmo.com/city/government/reports/agendas___minutes.php.
Change order for Downtown Project
A change order was proposed for the Downtown Project, which would include an increase in cost for Donald Maggi (via their subcontractor) to order the meter base for the new streetlights at $4,581.60, as well as an extension of the project completion date.
Remaining for the project is connecting electricity to the streetlights, which includes a meter base. The timeline extension does not include the time it would take for the meter base to arrive, which was relayed as 18 weeks.
Most of the city’s dawn to dusk streetlights are not metered. Many cities are moving toward metering streetlights, so it is a known quantity; however, due to the amount of time it would take to receive the meter base, Burbridge offered another option of direct wiring the streetlight and, instead, having city crews set up the streetlights on the meter when it arrives.
The board approved the change order, as presented.
Credit/Debit card processing changes
Exceleron is currently processing the majority of credit and debit card payments made to the city. The vast majority are utility payments. Non-utility payments include business licenses, UTV permits, pavilion rentals, cemetery plots & burials, etc.
Regulations around the taking of payments via cards has changed again and for in-person payments made at the office, the city can charge a surcharge of up to 4% for Mastercard and up to 3% for Visa. The city can no longer charge a convenience fee for debit cards or prepaid cards presented in-person; however, this does not mean the city will not be charged for processing these payments.
Exceleron stated, shared the staff summary, that roughly 70% of all card processing across all its customers are debit cards, which the city can no longer charge a convenience fee for in-person payments. The regulations do still allow for charging a “convenience fee” for online payments for all types of cards.
In addition, the city will no longer be able to offer auto-pay for utility bills via card through the utility office. Auto-pay via ACH check will still be available.
The city, noted the summary, recommended that customers who want the convenience of auto-pay can either switch to ACH or work with their bank or some other payment system for the feature.
Exceleron does have a customer-side, card payment, auto-pay feature, but it is not available to the city’s customers until and unless the city launches the pre-pay side of its features.
Related to these changes, the city does still have the ability to process cards via a card reader from US Bank. This reader is no longer supported for upgrades and security features, however. This system allows the city to combine payments for multiple accounts and process them as one payment, avoiding additional card processing fees.
The new processing system does not allow this and each account payment must be processed separately. With the elimination of fees, customers will not be charged a separate fee for each payment but will have to go through the payment process for each account.
These changes will not be implemented until July 30 in order to give city customers a month to make any necessary changes, shared Burbridge, excluding the convenience fees on debit cards or prepaid cards presented in person, which will be implemented as soon as Exceleron makes the change.
With all that being said, the board approved the credit/debit card processing changes, as presented.
Also approved included the following:
• Technical assistance contract for floodplain administration from Meramec Regional Planning Commission (MRPC). Overall, the amount of $4,000 is the same as last year, with the exception changes in hourly rates.
• Bid for demand meters for on-hand use
