Bids will be sought for ‘retrofitting’ of Crestwood Government Center

By Mike Anthony, Executive Editor


Executive Editor

The city of Crestwood will seek bids for the “retrofitting” of the Government Center to include a new police facility, the Board of Aldermen has decided.

The Board of Aldermen voted 6-2 to seek bids for the project, estimated at nearly $8 million, with Ward 3 Aldermen Jerry Miguel and Don Maddox opposed. The board’s vote to proceed with the project came after a roughly two-hour debate last week that included a period for public comment.

Aldermen discussed at length whether to defease the bond-like certificates issued to fund improvements at the Government Center, including a new police facility.

In November 2002, the city issued $9.83 million in certificates of participation — or COPs — to fund the construction of a new police building and repairs to the Government Center. Due to the rising costs of concrete and steel, aldermen last summer scrapped the construction of the standalone police building and decided to retrofit the Government Center to include a new police facility.

Voters in August 2002 approved Proposition S, the extension of a half-cent sales tax to fund construction of the new police building, fund repairs at the Government Center and allow the continuation of the city’s street repair and replacement program. The half-cent, capital-improvements sales tax had been scheduled to end in 2008, but voter approval of Proposition S extended the sales tax until 2023.

During a recent work session, City Administrator Don Greer suggested that aldermen consider defeasing the COPs, saying he believed it would help improve the chances of obtaining voter approval of a general obligation bond issue going before voters in the April 5 election.

To defease the COPs, an escrow account could be established to meet the obligations owed to certificate holders until the certificates can be retired. However, defeasing the certificates would not improve the health of the city’s general fund, Greer said.

The board voted 6-2 last week to defeat a motion to halt all work on the Government Center and defease the COPs.

Maddox’s motion to defease was seconded by Miguel and they were the only two to vote in favor of it. Both cited concerns about a decline in the city’s sales-tax revenue.

During a discussion of the project Jan. 11, Maddox said, “… I have not been a proponent of defeasance in our past discussions and as (resident) Mr. (David) Brophy pointed out in one of our recent meetings, my position has been to get our police facility improved with an effective, affordable plan that we can move forward without delay. That’s what my previous position has been, but times change and the one thing that has changed is our sales tax performance for the past two years. And it really creates concern, on my part anyway and I’m sure on the part of all of the rest of the board members.”

He later said, “… With the national recovery of 2004, I thought that our sales taxes would go — our income from sales taxes would go up. The fact is, it didn’t and the fact that it decreased really raises concern over what’s going to happen in the coming years — 2006, 2007, this year for that matter. If we continue to see businesses close and move out or move to other centers of business like Gravois Bluffs or Kirkwood Commons or if this new one planned by Sunset Hills goes in, we are very likely to be hurt worse and every dollar that we lose in sales-tax income means that much less to do work on streets and other capital improvements that come out of this fund, particularly when we have a fixed payment that’s locked in place for the next 18 years.”

If the board voted to defease the COPs, “it would mean that beginning in 2006 that $735,000 that is presently dedicated to paying off the COPs would become available for our discretionary use …,” Maddox said, noting some of that could be put aside to meet the needs of the Police Department. “It would also save over $3 million in interest costs for that time period — 2008 through 2022. It would also reduce our long-term debt from a little over $16 million to a little over $7 million. So those are the positives that would occur with defeasance.

“The one negative, of course, is the police station renovation and renovation of City Hall would not occur in the next two years. It would simply have to be set aside for pretty much the indefinite future … I think we do need to consider it (defeasance) and I just think it’s a matter of fiscal responsibility. I’m very concerned about what’s going to happen in the next few years with regard to our sales-tax income …,” Maddox said.

Miguel said, “… In my opinion, defeasance is the right thing to do. It gives us financial options and flexibility. As Alderman Maddox has said, it reduces the overall debt of the city and it eliminates the commitment of over $730,000 a year for the next 18 years and it eliminates the passing of a major, a potentially major financial problem to future boards.

“To not defease is to set the stage for yet another property tax increase over and above the one that we are here to discuss this evening. Equally important, the Police Department needs can be met on a pay-as-you-go basis and that was presented to us in our last work session by Administrator Greer. A communications system, the safety issues, the juvenile holding, the security and jail cells can all be addressed on a pay-as-you-go basis,” he said, also expressing concern about sales-tax revenue continuing to decline.

Miguel later said, “… I feel our budgets are strained. We currently have debt, including interest, of some $21-plus million. We will be discussing an additional government obligation bond this evening, which will add another $6 million, $7 million or $8 million in total. That would be pushing our total debt up into the $30 million area. Defeasing gives us the opportunity to reduce our total outstanding debt instead of increasing it. I look at it as right now we have two credit cards, one for $8.5 million and the other for $13 million, and now we’re looking at a third credit card of some $6 million to $8 million. We need to be looking at a consolidation loan, not an additional credit card …”

Mayor Tom Fagan said at one point, “… This whole idea of pay as you go, for an $8 million project, that seems to indicate to me we would need 16 years of $500,000 savings. To me, that suggests that the project would never get built.”

Greer said, “Well, I think the project that you’re looking at tonight … I think it’s realistic to say that that would never be built. That project would never be built. Something would be built. When I discussed the concept of pay as you go, it’s a system of prioritized step-downs as to how you go about that.”

Since 1996, Crestwood has spent 93.7 percent of the revenue generated by the capital-improvement sales tax on streets, Ward 2 Alderman Tim Trueblood later noted.

“… I will tell you, this board, if it defeases this, I will argue that we should roll back the sunset to its current term or previous term, which I think is three years down the road — 2008,” Trueblood said. “That means we’d have three years of capital improvements tax to build our streets and I think there could be a position made by legal counsel that that would be a correct thing to do because we campaigned, as (Ward 1) Alderman (Richard) Breeding pointed out, that this extension was to repair the needs or refix, rebuild, however you want to word it, our current building/police station. If we don’t do that, we have a moral obligation to take that back, return the capital-improvements tax to its original sunset, which is three years. And how much can be built in that time? Not near as much as we can in 17 (years).”

Breeding later said, “… People have said to me, what about breaking promises? You passed this sales-tax increase and you promised a new police building and the continuation of the capital improvements and I kind of put that with the promise we made on Ewers. I said as acting mayor, yeah, we’ll do your street. I’ll do the best I can if the city can afford it, we’ll do your street. I made that promise and I voted for Ewers also. And I believe that while we were campaigning for the new police building, we made a promise that’s what we’d do. So I guess we can either pick and choose what promises we break or what promises we keep … But if you take that line of reasoning, we had to do Ewers because it was a promise, then didn’t we promise this police building? And I’m really raising more questions than I am giving you answers …”