City’s finances dominate discussion at raucous Ward 3 town-hall meeting


Executive Editor

Two Crestwood aldermen recently told residents they can expect to see some type of tax-rate increase on the April ballot.

Ward 3 Aldermen Don Maddox and Jerry Miguel fielded questions during a raucous town-hall meeting that attracted roughly 125 people to the city’s Community Center in Whitecliff Park.

The Ward 3 town-hall meeting also drew other city officials, including Mayor Tom Fagan, Ward 2 Alderman Jim Kelleher, Ward 4 Alderman Pat Duwe and Director of Public Works Jim Eckrich.

Maddox and Miguel’s agenda for the meeting featured a variety of topics, including the retrofitting of City Hall to accommodate a new police facility, the financial condition of the city, fire and police services, streets, tax-increment financing and eminent domain. Despite the multitude of topics, many of those present wanted the two Ward 3 aldermen to focus on the city’s finances.

Noting residents are aware of the city’s financial problems, Miguel said at one point, “… The city did not realize the financial condition that it was in until the middle of 2003 when things started to surface and subsequent to that, the books for 2001 and 2002 were restated. So looking at the revenues and expenditures in the general fund restated, the city went into its first deficit in 1999 to the amount of $418,000 and hit a peak deficit of $1.1 million in 2002. In 2003, the deficit was $900,000 …

“The books for the year 2004, which ended on June the 30th, are being audited at this time.”

Maddox said at the Nov. 15 meeting, “There’ll be a deficit for this past year also, but it won’t be nearly what these two numbers show … The deficit for last year probably will be on the order of $400,000, but what these numbers tell you is in 1998 we had a surplus of about $2.5 million. That $2.5 million has been used up and the general fund is now in a negative posture. It’s in a deficit position. And right now, of course, the city, in order to operate and pay its bills is operating on a line of credit. And this situation cannot continue. It has to be resolved some way.

“There are several options that have been proposed, some of them having no credibility in my mind, anyway,” he continued. “Close the city. Well, we can’t do that. That’s ridiculous.”

Another proposal, Maddox said, “We could reduce fire service. Right now the Fire Department operates with a two-truck crew so that we can respond with two fire trucks to any fire incident. If we’d reduce that to a one-truck crew, then we would have to depend on second response from our neighboring cities, which is a possibility.”

Asked what the savings would be, Mad-dox said, “That would probably save a couple hundred-thousand (dollars). So it doesn’t solve …”

A resident interjected, “… A normal political thing to do when you have to balance your budget is say we’re going to cut the Police and Fire department(s) … I don’t un-derstand how you people get away with this (stuff). It’s like blackmailing the citizens: Give us a tax increase or we’re going to re-duce the police and fire department(s).”

Maddox said, “Well, what else would you suggest be done?”

The man responded, “I’d say cut everything across the board.”

Another man urged aldermen to place some type of tax-rate increase on either the April or August ballot.

“At least put it on the ballot and let people make a decision,” the man said.

Maddox responded, “I’m sure that that’s what’s going to happen in April.”

The man said, “Then you have to move now to get it on there. You can’t wait ’til April.”

Maddox replied, “Well, we’re not going to wait ’til April and I’m sure that that’s going to be done …”

To the resident, Miguel said, “… I agree with you completely. We have to move now. We cannot wait until next spring to get something on the April ballot.”

Asked if the city should consider selling assets, Miguel said, “… I think that is a possibility. There’s a Public Works Department facility. There’s some value there. There’s Whitecliff Park. There’s some value there. The problem with selling assets is that it’s a one-time shot. You get a benefit one time and then you’re back in the same situation that you were. Don mentioned a little earlier that he’s expecting a deficit of $400,000 or so for 2004. I don’t think that tells the complete story because expenses that have been covered by the general fund in the past, some of those expenses are now being covered from the parks fund. So at this point, you know, the city is getting some benefit from the revenues that are going into the parks and stormwater fund, which, of course, is starting to squeeze that fund … That cannot continue forever, either and I think that’s the basis for the city administrator’s standpoint that we can get through 2005 because we can get some help from the parks fund, but that’s not going to be there after 2005.”

Resident Roger Anderson interjected, “You have no right to that money for the simple reason you asked the citizens for that money for the parks and the stormwater and you have not done it. You have not spent the money where you asked for it, OK? You haven’t spent a dime for your stormwater and you had a list, you’re going to take care of all these projects and you haven’t take care of (them). Now you’re taking the money out of parks and paying the other bills. Now you’re taking money out of the stormwater, out of the sewer tax, and you moved it over there. All you’re doing is playing with the money and it’s wrong …”

Miguel said, “I will not argue with that statement.”

Anderson contended the city should contract with St. Louis County for police protection just as the city of Fenton does.

“… You have got a $1.5 million savings by going to the county,” he said, as a number of people yelled, “No.”

Anderson continued, “There’s $1.5 million there. Don’t build the police station and you’ve got $733,000. You’re going to have to do something to recover this money. You’re not going to recover it by what you’re talking about.”

Miguel continued, saying, “… To me, the options for some big dollars are the following: First, my gut feel, and again, I’m kind of out on a limb here, but my gut feel is that we need something in the area of a million dollars a year to get things squared away. Because not only do we have to make up for the deficit that we’re currently running, but we’ve also got to replace — repay the $1.4 million line of credit that is outstanding at this time.

“So my gut feel is that we need something in the area of a million dollars in revenue. Now you either increase taxes or increase revenue or you decrease expenses. The property tax currently is at 25 cents per $100 and brings in about $515,000, at least that’s the budgeted number for 2005. So if you take the tax, the revenue from 25 to 50 cents a hundred (dollars), that would raise roughly $500,000.

“Other possibilities are to put the government center renovation on hold,” Miguel said to a smattering of applause, noting that would involve defeasing the certificates of participation issued to fund the new police building. “… People that I’ve talked to that explained it to me have told me that — that explained the process to me — I put the numbers to it and what I came down to was that it would reduce the annual expenditures to the city by $450,000 a year for the next three years. There’s a 2007 call feature on the bonds … ”

After 2007, Miguel said, the debt would be retired, freeing up $733,000 annually.

Maddox said, “That, however, does nothing to solve the problem with the general fund.”