Clayton City Council — September 8: FY2027 budget on first reading as city projects a $1 million structural deficit
The council gave first readings to the FY2027 budget and 2026 tax levy, approved public art for the Vivian Apartments, and tabled a website contract for further cost analysis.
What happened
The Clayton City Council met on September 8, 2026, conducting public hearings and giving first readings to both the fiscal year 2027 operating budget and the calendar year 2026 property tax levy, while City Manager David Gipson presented a budget picture showing expenditures rising roughly 6 percent per year against flat revenue — a gap the city projects will reach a $1 million structural deficit in FY2027. The council also approved a conditional use permit for an accessory dwelling unit, endorsed a composting grant application, approved public art for the Vivian Apartments, and continued two items — a drive-through banking CUP and a proposed website contract — to the September 22nd meeting.
What the council decided
- Gave first reading to Bill 7172, setting property tax levies for calendar year 2026, by voice vote with no opposition; second reading is scheduled for September 22nd.
- Gave first reading to Bill 7173, adopting the FY2027 annual budget commencing October 1, 2026, by voice vote with no opposition; second reading is scheduled for September 22nd.
- Approved the consent agenda on a roll-call vote: Council Members Susan Buse, Becky Patel, Jeffery Yorg, Kami Waldman, Betsy Meyland-Smith, and Mayor Bridget McAndrew all voted aye.
- Approved Resolution 2026-26, granting a conditional use permit for 6349 Ellenwood Avenue to allow a 415-square-foot accessory dwelling unit, by voice vote with no opposition.
- Approved Resolution 2026-28, endorsing submittal of a composting awareness grant application to the St. Louis County Department of Public Health, by voice vote with no opposition.
- Approved Resolution 2026-29, approving the public art installation for the Vivian Apartments at 211 North Meramec Avenue, by voice vote with no opposition.
- Continued the conditional use permit for a drive-through banking lane at 6369 Clayton Road to September 22nd due to a notice error, by voice vote with no opposition.
- Continued Bill 7174, the proposed contract with GHD Services for a new city website, to September 22nd to allow staff to provide additional cost and effectiveness analysis, by voice vote with no opposition.
- Voted to convene a closed session on legal, real estate, personnel, contract negotiation, proprietary information, and public safety matters, ending the regular meeting.
Who was there
All six council members and the mayor were present at roll call: Council Members Susan Buse, Becky Patel, Gary Feder, Jeffery Yorg, Kami Waldman, and Betsy Meyland-Smith, and Mayor Bridget McAndrew. City Attorney Kevin O'Keefe was also present. City Manager David Gipson stepped out briefly at the time of roll call but participated in the meeting.
What they debated
Budget and structural deficit. David Gipson presented an abbreviated version of the FY2027 budget, noting that the city's expenditures have risen at roughly 6 percent per year while revenue has flattened. He described the city's revenue sources as: property tax at 25 percent, sales tax at 22 percent, utilities at 17 percent, and licenses, permits, and fees at 11 percent.
Gipson explained that including tornado-related expenses, the city anticipates roughly $34.3 million in revenue against $37.5 million in expenses — a roughly $3.2 million deficit to be drawn from reserves. Stripping out the one-time tornado costs, he said the structural operating gap stands at approximately $1 million, with the deficit projected to grow to around $1.8 million the following year without significant changes.
Gipson attributed flat revenue to Missouri's statutory cap on property tax increases — limited to the lower of 5 percent or CPI (2.7 percent this year) — and to stagnant sales tax activity. He noted that sales tax came in at about $7.3 million in FY2026, below the $7.5 million target, and that growth has been running around 1.5 percent. He observed that Clayton's sales tax base is heavily weighted toward hotels and restaurants — roughly 50 percent of sales tax revenue — and lacks large retail drivers such as supermarkets or big-box stores.
A member of the public, Adam Watson, asked why revenue was stagnant while expenditures kept rising. Gipson explained the Missouri property tax cap and noted that on the expenditure side, personnel costs — health insurance and market-rate salaries — are the primary driver of the roughly 6 percent annual increase. He said the Citizen Finance Committee is working on strategies to reduce the deficit over time, and that further budget discussions are planned for upcoming meetings and the council's summer retreat.
Property tax levy. Staff noted that calendar year 2026 is not a reassessment year and that the proposed levy represents an overall residential increase of four-tenths of one cent and eight-tenths of one cent on commercial, with no change to personal property tax. For a home valued at $700,000, the annual city portion of property taxes would be approximately $814 — about $5 more than the prior year.
Website contract. Staff presented a proposal to contract with GHD Services for a new city website at a first-year cost of $55,228 plus a 10 percent contingency of $5,522, for a total of $60,750. The annual ongoing cost would be $28,629, including $24,495 for hosting and $4,134 for an AI-powered search tool called Cluedo Search. Staff noted that GHD did not submit the lowest base bid but that the lowest bidder excluded key functions that would have required additional costs.
Several council members raised concerns about the long-term cost. One member noted that the annual cost of $28,629 appeared substantially higher than some competing proposals, and asked whether staff had calculated a 7- or 10-year total cost across vendors. Staff acknowledged they had focused primarily on first-year implementation costs and ADA/PDF remediation needs rather than a multi-year comparison. Another council member said the ongoing cost difference — citing one competitor at roughly $5,400 annually versus GHD's $28,629 — was a substantial gap worth understanding before committing.
A council member said the item was not a large amount of money in isolation but, given the budget discussion that had just occurred, preferred to table it and ask staff to return with a 10-year cost comparison before the council accepted a long-term obligation. The council agreed and voted to continue the item to September 22nd.
Public art for the Vivian Apartments. Staff described a proposed installation titled "Sampaguita," consisting of four stylized sampaguita flowers — the national flower of the Philippines — rising from a sidewalk bump-out at the corner of Meramec Avenue and Pershing Avenue. The design was created by Space Design and Construction and includes an interpretive plaque. The Public Art Advisory Committee unanimously recommended approval at its August 24, 2026 meeting.
Council members asked about the choice of white for the flowers and whether the Filipino community had been consulted. The designer explained that the sampaguita is traditionally white as a jasmine flower, and the team collectively decided that white against the building made the strongest statement after considering other colors. A representative of the development confirmed that the team had been consulting with Filipino descendants throughout the process and would continue to do so, noting that some community members preferred not to be publicly acknowledged at this time.
One council member noted the historical complexity of the Pershing connection to the Philippines and said that continuing to seek input from the Filipino community was critical, and praised the sensitivity the team had shown.
Accessory dwelling unit at 6349 Ellenwood Avenue. A representative of the applicant's architecture firm appeared on behalf of the property owners, who were attending a school curriculum night, and stated that the owners intend to use the pool house structure only for pool-related activities and occasional family visits, with no interest in renting it or allowing others to stay there. No other public comment was received.
Composting grant. WashU intern Grace Worley-Bross presented the grant application to the St. Louis County Department of Public Health, which would fund a composting awareness campaign with a current budget of $4,000, including 125 stainless steel kitchen scrap pails for approximately 5 percent of single-family homes in Clayton. The grant allows up to $25,000 in reimbursement and requires quarterly reporting. One council member expressed strong support for composting as a waste diversion strategy and asked staff to consider how to position the city for composting to remain an option in future waste-hauling bids.
Also at the meeting
Sustainability Committee presentation. Deb Grossman, chair of the Sustainability Advisory Committee, opened the meeting with an annual report card on the city's sustainability work, covering topics including waste collection, green spaces, the city's dark sky designation, tree ordinance best practices, and the arboretum. She noted that waste collection numbers were somewhat skewed by debris removal following the tornado.
The council recognized WashU junior Grace Worley-Bross, who interned with the Sustainability Committee from spring through summer 2026. Mayor McAndrew credited her with contributions including a bird-safe glass class, the composting grant application, a composting banner, research for the Mayors for Monarchs program, the idling program, Skip the Stuff research, and an Oak Knoll Park grant application.
The meeting also noted that three MIAC (Municipal Issues Advisory Committee) student members were in attendance, with the mayor explaining that over 30 students are required to attend at least one city council meeting and one each of several other commission meetings over the coming months.
Drive-through banking CUP continued. The council heard a description of a conditional use permit request for a drive-through banking lane at 6369 Clayton Road, where State Bank proposes to occupy a former Commerce Bank site and reduce the drive-through from three lanes to two. Because the public hearing notice requirements were not met for September 8th, the item was continued to September 22nd. No one appeared to speak on the matter.
In context
The structural budget gap described Tuesday has been building for several years. City Manager Gipson noted that expenditures have been rising at roughly 6 percent annually while revenue has remained relatively flat, and that the city ended FY2026 with a deficit of approximately $220,000 — a figure projected to grow to around $1 million in FY2027 and potentially $1.8 million the year after without corrective action.
Gipson also outlined the city's current debt picture: approximately $3.2 million remaining on bonds tied to the Center of Clayton renovation, general obligation bonds from 2014 road reconstructions refinanced in 2022 and due to be paid off in 2034, and just under $14 million in new debt issued last year for the municipal maintenance facility, with payoff projected in 2044.
The composting grant application builds on a curbside composting program that has been available to Clayton single-family homes alongside yard waste collection. At the September 2024 council meeting, the Sustainability Committee had highlighted food waste as the most abundant material sent to landfills and called for expanded composting efforts. The current grant application, requesting $4,000 from St. Louis County, represents the committee's effort to increase resident awareness and participation in the existing program.
The public art process for the Vivian Apartments follows the city's PUD public benefit point system. In prior PUD proceedings, the city has awarded up to five public benefit points for public art, with the specific installation subject to final recommendation by the Public Art Advisory Committee and confirmation by the City Council. The Vivian PUD was approved with a tentative three points for public art pending that final review, which the council completed Tuesday.
The city's current website is ten years old. Staff noted that the website redesign is funded in the FY2027 budget and that design and development is expected to begin October 1, 2026, subject to council approval. The council's decision to continue the item to September 22nd means that timeline may shift depending on the outcome of the additional cost analysis staff was asked to provide.
Public comments
Two speakers addressed the council during the open forum portion of the meeting.
Natalie Dowd, who identified herself as a Ward 2 resident, urged the council to cancel the city's Flock camera contract and reject other AI surveillance technology.
Each day that we allow AI surveillance to remain in our community is a day that we are inviting the chaos and violence of ICE and making our community less safe.— September 8, 2026 — Meeting Transcript [#q814b3aee]
She referenced a July 2026 incident in Biddeford, Maine and argued that similar events could occur in Clayton.
A second speaker, Adam Watson, spoke during the budget public hearing and asked why city revenue was stagnant while expenditures continued to rise. City Manager Gipson responded by explaining Missouri's statutory cap on property tax increases and the flattening of sales tax growth.
No public comments were received on the property tax levy public hearing, the Ellenwood Avenue ADU public hearing (beyond the applicant's representative), or the drive-through banking CUP public hearing.