Crestwood aldermen debate whether to extend Prop S tax

Board OK’d measure to end Prop S tax when debt retired

By Kari Williams

Crestwood aldermen have yet to determine if a 20-cent tax will be extended for one year or whether they will ask voters to extend it for a longer period.

The board last week discussed both possibilities relating to Proposition S, the 20-cent, tax-rate increase voters approved in 2006. The proposition was designed to eliminate $2 million in debt and a $1.5 million line of credit, both from Southwest Bank.

In 2010, the board voted to sunset the Prop S tax in 2011 due to early retirement of the associated debt, rather than 2012, as allowed by the measure’s ballot language.

Mayor Jeff Schlink said the city could choose to collect the tax for the remaining year it is eligible to do so, which would be determined in the fall when property rates are set. Or, according to Schlink, the proposition could be extended, requiring voter approval. Such a measure could be placed on the August ballot, though the board faces a May 29 deadline to do so.

Ward 3 Alderman Jerry Miguel reminded aldermen the board approved a resolution in 2006, promising not to exceed the necessary amount to repay the loan.

The resolution stated, “Be it resolved that this mayor and Board of Aldermen attest that our intention of offering ‘Proposition S’ to the voters of the city is solely to retire our current debt to Southwest Bank and to eliminate the need for our current line of credit from that same bank …”

Ward 4 Alderman John Foote said the board promised that once the debt was paid off, the tax would be retired.

“Those of us who were involved in (the events leading up to Prop S) and fought for this signed on to the fact we don’t want to extend it,” he said. “So we find ourselves now in a couple of areas where we have a few problems we’re going to have to face.”

However, Ward 4 Alderman Deborah Beezley said extending Prop S for one year could allow time to learn more about redevelopment plans for Crestwood Court.

“We need to also keep in mind that Prop S is a tax,” she said. “It’s already levied, and for the average homeowner, we are talking about in the average of $120 to $200 a year, which equates out to anywhere from $10 to $16 a month to continue and help our community with services.”

Ward 1 Alderman Darryl Wallach said the objective of Prop S was debt reduction, which has been achieved.

“I think for the voters’ standpoint, I don’t think it’d be appropriate for us, in August … to continue that tax,” he said.

If Crestwood does not take the opportunity to continue Prop S for at least one year, it will put the city “further and further behind” financially, according to Beezley.

If the board does put the issue of extending Prop S to voters or asks voters to approve a tax-rate increase, Schlink said city officials have to keep in mind all possible outcomes.

“… Last time we asked for a tax increase it failed, and it failed pretty poorly …,” Schlink said. “If it does fail, what do we do? Do we prepare for that or do we just conduct business as usual?”

Voters in August 2008 rejected a six-year 35-cent, tax-rate increase.

Foote said citizen involvement could help determine Crestwood’s financial direction.

“Mayor Schlink is hitting the ball and doing a good job, as are many of the other aldermen,” Foote told the board. “But our job is not to make this the cheapest damn city in the whole area. It’s to provide a quality of life to our residents and allow them a voice in selecting what they want to pay for it, and we aren’t doing that job …”

However, Crestwood has done a “wonderful job,” according to Foote, of trying to save funds, noting the number of grants the city has received, citing Grant Road construction as an example.

“Those of us that sit up here have an obligation to open our eyes, look at what the financial news is and what the financial thrust of this place is and start making decisions that are not just, ‘don’t make a tax increase,'” Foote said.

Finance Officer Greg Kremer told the board while the city had nearly $842,000 surplus for fiscal 2011, which he said is “great news for the city,” it is a one-time savings.

“It basically buys the city a little bit more time to deal with what I consider the larger hurdle that we’ve got in front of us,” he said, “and that’s the years 2013 through 2016.”

The surplus was a result of reduced personnel costs, lower wages and lower capital project costs, among other line items.

Keeping in mind the “unusual perks,” Schlink said the city could put the issue of a tax-rate increase to voters, again, keeping in mind all possible outcomes.

“We can put some eggs into that basket for letting the people decide,” Schlink said, “but I think it’s still very important to understand that if that is to fail, then we still have to manage the city with the dollars that we have …”

Foote said he would like to find ways to open communication with residents.

“In the end of all of this, we may be perfectly happy with the choices we make. We may make a number of people very upset with the choices we make if they’re not involved,” he said.