Crestwood residents who oppose tax hike cite lack of ‘Plan B’

Miguel says case not made for ‘million-dollar tax increase’

By BURKE WASSON

Because the Crestwood administration did not respond last year to aldermen’s requests for a “Plan B” to address trends of rising costs and falling revenue, some residents say they will vote “no” in August on the city’s new plan to head off financial trouble — a proposed 35-cent tax-rate increase.

Crestwood voters will decide Aug. 5 whether to approve a six-year tax-rate increase of 35 cents per $100 of assessed valuation to head off declining retail and property-tax revenues.

The Board of Aldermen voted 7-1 May 13 to place the proposed tax-rate increase on the August ballot after Mayor Roy Robinson proposed a five-year, 25-cent tax-rate increase at an April 30 town-hall meeting.

Ward 3 Alderman Jerry Miguel was opposed, saying he has “not seen the case made for a million-dollar tax increase.”

Miguel instead advocates a form of the Plan B that he proposed last fall at a Ways and Means Committee meeting.

“In Plan B, I would say that cost would be reduced by attrition,” Miguel said. “It’s an opportunity that has been debated before and decided not to. The administration has decided not to use that. I think that attrition is an option … Expenses can be reduced without making employee cuts. Other items, the property tax could be in-creased to its current cap, which a citizen mentioned. We need to factor in the Kohl’s TIF, which I believe will be paid in 2010.

“And with the (Aquatic Center) pool payoff, the benefits actually begin in 2011. The last payment is largely in escrow. Once we hit 2011, we will essentially be debt free from the pool. Put those two items together, you’ve got $1.5 million between the two of them … The utility-tax item could be put back on the ballot. And there are probably other items that probably could be done. The bottom line, your honor, is I have not seen the case made for a million-dollar tax increase.”

But the majority of aldermen cite three town-hall meetings that took place from January through March at which residents in attendance expressed a desire to see the city maintain its current levels of service.

Coupled with sinking revenues and rising expenses, city officials believe a tax-rate increase is necessary. A presentation on city finances at an April 30 town-hall meeting showed that while $12,676,109 is allocated for city services in the 2008 budget, officials now believe that “the city may not have enough revenue to cover those expenditures.”

City officials also have pointed to a 12.6-percent drop in sales-tax revenue collected in the first quarter of 2008 compared to the first quarter of 2007 as well as the pending redevelopment of the Crestwood mall now known as Crestwood Court, which will have some sections close for construction as it likely will be redeveloped in phases.

But Civil Service Board member Martha Duchild told Robinson at the May 13 Board of Aldermen meeting that because city officials have known about declining revenue at the mall for some time, steps could have been taken sooner to control costs and address falling revenue.

“The potential sale of the mall and the rapid decline of it, that’s been known for at least three years,” Duchild said to the mayor. “… Over that time period, your crew has asked to steer the ship away from the iceberg in the form of coming up with a Plan B in the form of cutting expenses.

“You did not want to do that. Now here we are at the 11th hour and, all of a sudden, you want us to give you the lifeboats to get this city out of trouble. And that’s where I have difficulty.

“Steps could have been taken as far as cutting expenses and controlling spending so that by the time that we got to this point, the amount that you want to raise the taxes by would be an accurate reflection of what the city actually needs. But all we’ve got so far is you (Robinson) are saying 25 cents. The board is saying 35 cents. You say five years. They say six years. From a public perception, it seems like you don’t know how much you really do need. And if I’m going to give money, I would like to know that what I’m giving is attached to some solid financial research.”

“Well, I’ll tell you this,” Robinson said. “There’s nobody that can give you that answer because we don’t know exactly how much it’s going to cost. We now know that with a redevelopment over the next three or four years and the reassessment of the property at the mall property and we also now know that the economy has taken a downward turn. How long that is? If I had a crystal ball, I could give you those answers. But I don’t have that with me.

“And the only thing I can tell you is we made our best judgment — not guess — our best judgment on what we thought we would need as best we could. You may not accept it. I’ve sat down with the staff and the people and have discussed this with the people that are supposed to be knowledgeable. I’ve talked with the auditors, or our people have talked with the auditors. This is what we think. What we came up with is what we thought we could do.”

Ward 1 Alderman Richard Bland defended the proposed 35-cent tax-rate increase and said aldermen came up with that number based on trends in falling revenue and rising expenses. He also criticized Miguel’s proposal in Plan B to cut expenses through employee attrition.

“We didn’t pull that (35-cent) number out of the air” Bland said. “And with that number, quite frankly, that may be on the conservative end of the numbers. But I don’t like to hear the word attrition because that’s not what we were tasked with at the end of the town-hall meetings and with the work session. What we were tasked with was trying to come up with a way to meet the wishes of the citizens who attended the town-hall meetings. And that’s when we sat down and started working through the numbers.”

Miguel pointed out that based on an actual cash-flow basis, he believes the city had $4.8 million in cash on hand at the end of April. This differs from Robinson’s projection on May 1 that the city had between $3.5 million and $4 million of cash on hand, which would be used to cover expenses if revenue cannot meet those demands. Through the first quarter of 2008, the city already had to use $2 million of cash on hand to pay for board-approved expenditures.

“I look at the monthly cash report that we see and I was pleasantly surprised that the report that we received in April showing that we had $4.8 million in cash, rounded off to $4.9 million,” Miguel said. “… So from a cash standpoint, we’re doing fairly well. As I noted, the mayor has not wanted to hear about Plan B in the past. But since things move quickly to where we are, I think that I need to make mention of a few items that I think the board might want to consider if not now, at least some other time. I agree with the mayor …”

“Point of order,” Robinson interjected. “Just a moment. I’ve let you go on for about 25 minutes. Close to 25. I’ve been watching. Please try to sum up what your points are. I see people in the audience even dozing off.”

“No, no,” Duchild interjected from the audience. “That’s not true.”