It is important to note that these bond issues — the projects and financing — were developed by Mayor Welsch, Councilmember Kraft, City Manager Walker, and three men in a second-floor conference room in City Hall. There was no engagement of the entire Council when making these decisions — only a surprise and perfunctory “ consensus” poll at the end of a Study Session. In a recent newsletter from the Mayor, she said that the City Manager recommended the use of a property tax, rather than a sales tax. Determining whether and how the City pays for such an enormous project is a major policy decision, which should only be detemined by the Council as it has been in the past. However, the Council, as a body, was denied the opportunity to officially develop and discuss it. And most significantly, there was NO public involvement!
DO WE NEED THESE BOND ISSUES?
• The Capital Improvement Sales Tax (passed in 1996) generates between $2.1-2.25 million dollars annually, and
is designated to be used “specifically for capital improvements;”
• We also receive around $600,000 annually from the County Road Tax, which is designated to be used on roads
• We receive around $900,000 annually from the State Gasoline Sales Tax;
• The Park Sales Tax (passed in 2001) generates about $1.2 million dollars annually, and is designated "to be
used solely for park improvement purposes.”
A careful study of the budgets and the Capital Improvement Sales Tax for streets and sidewalks from 1991 through the present shows that from 1998 to the 2008 recession, the Capital Improvement Sales Tax provided an average of over $1M annually for street improvements as well as Capital Improvement projects including City Hall historic preservation, the North & South Fire Station Expansion and partial funding for Centennial Commons. The debt incurred from those projects was serviced (interest and principal payments) through the collection of the Capital Improvement sales tax revenues rather than the collection of property taxes. When examining these budgets, one of the most striking observations was that from 2011 to the present, the City has cut annual budget appropriation for Street and Sidewalk improvements while continuing to collect $2.1 million Capital Improvement Sales Tax each year. The policy established by the City Council is that these funds are designated to be used “specifically for capital improvements.” From FY2013 to FY2015, General Fund Uncommitted Reserves have become the primary funding source for street improvements.
Similarly, the policy established by the City Council for Parks Sales Tax approved in 2001 and 2004 designated the taxes collected “to be used solely for park improvement purposes.” The ½% Park Sales Tax provides $1.2 million each year, which is a dependable regular funding source to continually improve all of our 18 parks, and for servicing the debt associated with part of the improvements at Centennial Commons, rather than an increase in property taxes. The budgets from 2001 up to the present show that from 2011 through the present, the City has cut University City annual funding for improving Parks, while continuing to collect $1.2 million annual Park Sales tax. The City makes some improvements to the parks every year, and University City continues to receive substantial funding from the Municipal Park Grant Commission of St. Louis County. We have adequate funding for local share of everything in our 5-year Capital Improvement Program as well as local share of the recently adopted Bike/Walk Plan. In short, all Park work could be done with existing sales taxes and grants as well as raising funds from private sources.
These sales taxes were previously passed to provide University City with a steady source of annual income of over
$3 million ($4.5 million if you count the state gasoline taxes and the County Road Tax) to handle street work and park improvements and maintenance, and thereby, in the words of former Councilmember Mary Schuman,“reducing the need for future bond issues, except for those major, unusual needs that crop up now and then.” If, as the budgets show, the City has not been spending the money collected specifically for street work and parks for those purposes, then the obvious question here is where is that money going?
ARE THERE OTHER WAYS TO PAY FOR THESE IMPROVEMENTS?
The proposed work to be financed by these bond issue is mandated by law to be completed within 3 years (see Arbitrage Law). Consider the Ferguson Avenue Bridge and George Street projects: both took over two years (and still counting on George!) and every deadline was missed. If our track records with the Ferguson Bridge and George are any indicator, it would be a real challenge to successfully undertake a program of this size and scope in such a short period of time.
The City has an official Debt Policy established by the City Council:
1) The City does not incur long-term debt to support current operations.
2) The City limits long-term borrowing to capital improvements or projects that cannot be financed from current revenues.
3) Capital projects financed through bond proceeds shall be financed for a period not to exceed the useful life of the project.
As proposed, the bond issues would seem to violate the City’s Debt Policy. One alternative could be to undertake a series of smaller-sized street and park projects in sequence over a 10 year period, and use the funds to do those projects from the money collected from the Capital Improvement Sales Tax and the Park Sales Tax, the State Gasoline Tax and the County Road tax to finance those projects. There is another alternative: If a General Obligation bond is desirable, then we could pay for it out of those same sales tax funds and not incur increases in our property taxes. This is what was done for Capital Improvements such as the preservation of City Hall, Fire Station #2 improvements and Centennial Commons. All of this, however, must come with the full participation of the entire Council and broad public engagement.
These bond issues are just too big, too expensive and were developed with no input from you or me. It is with deep regret that I find myself unable to support these bond issues, and I hope I have made a clear case for why. I encourage you to vote NO on Propositions S and P. If you would like to help or for additional information, please go to UCITYBONDS.COM.
Councilmember Crow and I will be holding two Town Hall meetings on these bond issues. Everyone is invited. Save the dates and bring your questions:
Tuesday, March 24, 2015 at 7:00 PM at McNair Administration Bldg. (8136 Groby Rd.)
Thursday, March 26, 2015 at 7:00 PM at the University City Library Auditorium