Resident suggests Crestwood board seek 45-cent tax hike over three years

By MIKE ANTHONY

Executive Editor

A Crestwood resident last week urged the Board of Aldermen to pursue a tax-rate increase.

During a Nov. 22 hearing on the city’s proposed 2012 budget, Jerome Friedeck, of Fournier Drive, suggested the Board of Aldermen pursue a 45-cent tax-rate increase over a three-year period.

Friedeck had urged aldermen to pursue a 35-cent tax-rate increase during the November 2010 public hearing on the city’s 2011 budget.

City voters defeated a proposed six-year, 35-cent tax-rate increase on real and personal property in the August 2008 election. Proposition 1 would have generated $1.1 million annually to maintain city services.

Addressing the board Nov. 22, Friedeck said, “In or about 2004, funds have been shifted around from one fund to another to balance the budget. Since 1996 until 2005, Crestwood spent 93.7 percent of the revenue generated by the capital improvement sales tax funds on streets. How much are they spending now?”

He later noted, “… A tax-rate (increase) of 20 cents per $100 of assessed valuation was approved in April 2006 by 62 percent of the Crestwood voters called Proposition S. Since 2011 is the last year this tax is being collected, I think we need an increase in taxes and suggest 25 cents in 2012, 10 cents in 2013 and 10 cents in 2014, making a total of 45 cents.

“Lindbergh School District asked (for) and received a 65-cent tax increase. They do not furnish police protection, fire protection, animal control, snow removal and many more things which the city of Crestwood offers.

“The city has collected over $80 million in the past seven years without doing any stormwater projects — none. Crestwood needs to get the stormwater projects off the books. We need to keep (our) excellent police and fire departments, our animal control, our public works, street replacement and repair and other departments which either have been eliminated or reduced …,” he continued.

“Please put back in the general fund things which were originally designated for the general fund and balance the fund with a tax increase …,” Friedeck said.

Ward 4 Alderman John Foote told Friedeck, “… I’m glad you’re here. I’m glad you continue to look and make sure things are done properly. I certainly would be disappointed were you not. But the 20 cents that came in, came in in 2006. It was specifically earmarked for the pay down of debt. At the time that tax was approved by the residents in the city, it was sunset. It was just strictly for debt. It did not enter into the cash flow at all. It was to pay down the debt.

“That debt that it was designed for has been paid off. That particular tax, the 20 cents, will sunset on Dec. 31st of 2011. The city did the job it promised to do for the 20 cents,” he said.

“Now the costs that you are referring to on capital improvements, stormwater projects, things of that sort, came out of the park and stormwater fund. And that fund was designed to bring in sufficient money where 25 percent could be utilized for the sewers and for stormwater and 75 percent would go to the parks. What happened was that the city committed to $1,065,000 a year in a bond payment for the new aquatic center for over a 10-year period.

“The end result of that is the mall fell. That revenue continually decreased to the point where we’ve had to borrow on almost every place to make our obligation to finish off the aquatic center. That obligation will be paid off very shortly. So we’re virtually debt free. Are we under-staffed or under-revenued? I believe strongly we are and I agree with you.

“But I think the residents that are here in Crestwood are going to have to set what they want. We can’t run it on thin air and that’s my opinion,” Foote said.

Friedeck later noted that revenues from the parks and stormwater tax were shifted to fund recreation costs that originally had been paid through the general fund.

Foote said, “I’m not in disagreement with you. You can recall when this began. We ran up about $24 million worth of debt in under two years.”

Friedeck said, “I know that.”

Foote continued, “And financial management, if anything, was a little bit questionable because we couldn’t balance or close the books — 2003, 2004 — and in 2003 we were borrowing and paying bills on a letter of credit. That’s the condition of this city and by the time things started to change around 2005, it took everything that we could muster to compensate for the revenue stream that left from the mall that at one point brought in close to $2 million. And it’s nowhere near that as you’re well aware.”

Friedeck said, “When they start tearing the building down, is that going to increase or decrease the value …”

Foote said, “… That particular piece of property had a total value on the books for the Lindbergh School District and for the city of Crestwood of $100 million. When that property was sold, it was sold for $17.3 million. That’s an $83 million hit on the tax basis. So as far as you name it, it could go wrong, it did go wrong.

“And it’s a testament to the employees of this city — and I’m talking about the hard-working employees. We have an excellent group of people and they have done a fantastic job of running this city with very fine services, and we’ve done that now to around 92, 93 people from 130 people. And not only have they managed to do their jobs under some bad circumstances, they’ve done an excellent job. They’ve turned in grants wherever possible, and those grants have brought in over $2.3 million to the city that wouldn’t have been there if it wouldn’t have been for the employees,” he said.

“So the residents of Crestwood have got an outstanding bunch of people working for them and I can’t say enough about how good these people are. But as far as where we’ve been in trying to communicate to the residents on what we need to run the city, I do get upset — and excuse me, I’m probably out of order because I’m on my soapbox — we’re running the city … on around 27 cents. The St. Louis Zoo district charges more for their zoo district than we do. They’re paying more in Webster for library services, although they don’t have to pay for the county services.

“So this is a completely out of balance system and it’s going to take the residents of this city a good hard look on what they want preserved out of this city and how they want to pay for it,” Foote said.

Friedeck said, “That is why I’m suggesting a tax increase. I was aware of what you told me and I’m glad you stated it because you said it better than I would …”

Foote said, “I don’t think so.”

Friedeck continued, “The people here are outstanding. If it wouldn’t have been for (Ward 3 Alderman) Jerry Miguel, we would still be paying off a police station. When they started that, we were going to have enough money to pay for that police station and have a million dollars left over for streets. Do you have a million dollars for streets without it? What would you have done with it?

“Jerry Miguel and the other aldermen, they’re the ones who really pushed and kept us out of the sewer, put it that way … He saved the city of Crestwood. He’s owed a lot of thanks …”

Asked about Friedeck’s suggestion for a tax-rate increase, City Administrator Petree Eastman told the Call, “Well, obviously we’re concerned about where we are in relationship to our peers as well as the fact that expenses are outpacing revenues, so obviously we’re very concerned about whether we’re going to have enough revenue in the coming years to meet our obligations. At this point, we’re fine, but it’s not that far into the future that we have real concerns.

“Added to that is that our employees haven’t seen a pay raise in three years and the ones that they’ve gotten in the last five to 10 have been pretty meager, and so to address all the needs of the city and pay our employees at least what the average is for our peer cities is a priority. But that takes revenue and revenue is not on the uptake. It might with sales, but that’s very economy driven.

“I don’t know how the board will decide on the revenue side of the question, but clearly from the expense side, we’re pretty bare bones at this point … I think it makes sense that we need to talk about revenue, for sure,” Eastman said.