Members of the Crestwood Board of Aldermen recently reached a consensus on three proposals designed to help restore the financial health of the city’s general fund.

During a nearly four-hour work session Saturday, aldermen discussed several “concepts” formulated by City Administrator Don Greer to help restore the general fund to financial health. Aldermen also had focused on the general fund during a roughly three-hour work session the previous Saturday, March 20.

In a memorandum distributed to the board, Greer suggested several concepts for aldermen to consider solely for discussion purposes, including capturing prior years’ general fund overhead from the capital improvements fund and establishing a parks and recreation internal services fund that would capture general fund overhead costs associated with oversight by the parks and recreation director and staff who work directly with the parks.

A majority of aldermen indicated their desire to proceed with those two proposals and Greer said he would have City Attorney Rob Golterman draft ordinances for the board’s consideration.

Based on aldermen’s comments, Greer said he also would have Golterman prepare a third ordinance for their consideration that would eliminate a board-established internal services fund. If the ordinance is approved, the city’s general fund deficit would be reduced by $1 million to $871,000.

During the previous week’s work session, aldermen had discussed Greer’s concept to capture prior years’ general fund overhead from the capital improvements fund using the same formula — plus an acceleration factor — that is contained in the fiscal 2004 budget.

In his March 20 memo, Greer wrote, “A review of prior years’ history clearly indicates that the capital improvements fund played a significant part in the overspending that led to the decline in general fund cash reserves. During those periods of time, little to no general fund overhead was captured from that fund.

“I have caused the calculation of prior years’ overhead to be completed to present the option of recapturing the costs associated with the management and operation of the street reconstruction program,” he wrote.

In his memorandum, the city administrator noted that based on his calculations, $2,253,307.04 in prior years’ general fund overhead could be captured from the capital improvements fund. However, Greer was quick to note he had no intention of asking aldermen to recapture the entire $2.2 million.

After discussing the matter at length March 27, aldermen indicated their desire to attempt to capture $901,322.82 — 40 percent of the $2.2 million — over a 10-year period.

The previous week, Ward 3 Alderman Don Maddox had expressed reservations about Greer’s concept, concerned that using current revenue to capture past expenditures would reduce funding for the city’s street maintenance program.

But Greer said his projections “assume $500,000 worth of concrete and asphalt” annually for the city’s street maintenance program. That $500,000 excludes engineering and design costs.

“… Quite candidly, I never thought it was appropriate to go back and get $2.2 million because the effect of that kind of recovery on the capital improvements fund as we move forward ends any possible use of that,” Greer said. “But the illustration is that I think that that’s what we should have been doing over a period of time … The question I guess I’m asking is if you agree with the logic, then how much is appropriate to recover? I’m not suggesting penny for penny.”

Maddox said he believed recovering 40 percent of that $2.2 million over a 10-year period is reasonable.

In his memo, Greer noted that the establishment of parks and recreation internal services fund “would allow the parks and stormwater fund to capture overhead costs associated with oversight by the parks and recreation director and staff that work directly with the parks. Similar to that created for public works, percentages of related salaries and benefits are identified and reimbursed to the general fund.”

For the current fiscal year, $207,160 in such overhead could be reimbursed to the general fund.

“Making this budgeting adjusting could, in effect, balance the general fund while maintaining very conservative revenues estimates,” Greer wrote. “The carry-forward balance of the park and stormwater fund is sufficient to properly plan for storm-water projects or selected park improvements during the next several years.”

In April 2012, he wrote, the certificates of participation issued to fund the aquatic center — which are not subject to renegotiation — will be retired, making an additional $1 million available for the city’s use.

Greer told aldermen, “… I know it’s difficult to think long into the future, but I’m telling you today that in 2012, eight years from now, whoever’s sitting on this board is going to have what I would consider an obscene amount of money to spend. The aquatic center’s paid for. That board is going to have to dream of ways to spend it because otherwise we’re accumulating this enormous cash cow on the backs of the taxpayers and we ought to repeal the tax after that. This one has no sunset. This goes forever. It’s not shared (with St. Louis County). This goes on and on and on. If you want to build a million-dollar amphitheater at Whitecliff Park, I’d say wait until 2012 and have at it …”

During the March 20 work session, aldermen discussed the general fund deficit of $1.871 million at length and and learned from the city administrator and Director of Finance Diana Madrid that $1 million of that deficit resulted from the board’s establishment of an internal service fund that was to contain $1 million.

However, Brown Smith Wallace reported in the forensic audit, “The money earmarked for the internal service fund was never set aside other than in effect set up as a memorandum entry.”

In response to a question, Madrid said March 20, “The $1 million internal service fund is carried as an asset on the city’s financial statements. If the board chose to keep $1 million as that asset, the general fund would owe the internal service fund $1 million. If the board chooses to wipe off or eliminate that $1 million, then the general fund fund balance at June 30, 2003, would be a negative $871,000.”

Aldermen agreed last Saturday that the fund should be eliminated and the general fund deficit reduced by $1 million.

Board members expressed little interest in other concepts presented by Greer, including increasing merchant license fees and utility taxes. Both concepts would require approval from city voters.

Aldermen also expressed no interest in levying the ceiling available for property tax, which would generate an additional $40,000 annually.