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City spends 93.7 percent of half-cent tax on streets


The city of Crestwood spent 93.7 percent of the revenue generated by a half-cent, capital-improvements sales tax on general public works services and street maintenance from 1996 to 2003, according to City Administrator Don Greer.

At the request of Ward 2 Alderman Tim Trueblood, Greer prepared a history of the city's capital improvement fund, including what percentage of revenue generated by the voter-approved half-cent sales tax has been spent on streets and street maintenance.

Though voters approved the sales tax in 1993, the city was not able to use revenue from the tax until 1996 because of a court challenge. From 1996 to 2003, the sales tax has generated $14,100,880 and the city has spent $13,093,590 — 93.7 percent — of that revenue on public works services and street maintenance.

As originally approved by voters, the half-cent sales tax had a sunset provision and collection of the tax was scheduled to end in 2008. But in August 2002, Crestwood voters approved Proposition S, the extension of the half-cent, capital-improvements sales tax to fund construction of a new police building, provide revenue for repairs at City Hall and allow the continuation of the city's street repair and replacement program. Voter approval of Proposition S extended the sales tax until 2023.

In November 2002, the city issued $9.83 million in certificates of participation — or COPs — to fund the construction of the new police building and the repairs to City Hall. The bond-like certificates are to be repaid over a 20-year period and payments with interest will total $14,674,505.

The project budget for the new police facility and renovations to City Hall totals $8.7 million, including site work and professional fees. The cost of the new police facility itself, including furniture, fixtures and equipment, totals roughly $5.85 million.

Trueblood told the Call that he is aware that some citizens are concerned about the city's ability to fund the new police building.

"I think this data puts an end to the false claim that the citizens aren't getting the tax dollars spent on streets that they thought they would, and therefore we can't afford a police station,'' Trueblood said, referring to the information compiled by Greer.

When voters first approved the capital-improvements sales tax, the Board of Aldermen agreed that 75 percent of the revenue generated by the sales tax would be spent on streets and the remaining 25 percent would be used for other capital expenditures as determined by aldermen. However, Greer said at a recent board meeting that the 75-25 split was not a legal obligation and aldermen could change that based on what they believed to be in the best interest of the city and its citizens as long as the revenue was spent on capital improvements.

By year, the information compiled by Greer is as follows:

• 1996 — The sales tax generated $1,718,828 and $1,631,564 — 94.9 percent — was spent on public works services and street maintenance.

• 1997 — The sales tax generated $1,662,645 and $2,954,555 — 177.7 percent — was spent on public works services and street maintenance.

• 1998 — The sales tax generated $1,684,503 and $1,981,798 — 117.6 percent — was spent on public works services and street maintenance.

• 1999 — The sales tax generated $1,921,605 and $1,689,757 — 87.9 percent — was spent on public works services and street maintenance.

• 2000 — The sales tax generated $1,803,202 and $1,369,511 — 75.9 percent — was spent on public works services and street maintenance.

• 2001 — The sales tax generated $1,769,545 and $1,093,012 — 61.8 percent — was spent on public works services and street maintenance.

• 2002 — The sales tax generated $1,792,151 and $1,437,038 — 80.2 percent — was spent on public works services and street maintenance.

• 2003 — The sales tax generated $1,748,401 and $936,355 — 53.6 percent — was spent on public works services and street maintenance.

Noting that overall, 93.7 percent of the revenue generated has been spent on the street program, Trueblood said, "When the capital-improvements tax was passed, the Board of Aldermen promised that we would spend at least 75 percent of the dollars on street repair, until the Board of Aldermen felt the percentage needed to be changed. That promise has not been broken ...''

On numerous occasions, Greer has contended the city overspent on streets.

Saying he agrees with Greer's assessment that the city overspent on its street program, Trueblood told the Call, "We probably paid for a Cadillac when we could have gotten away with a Buick or a Chevy.''

Given the overspending on streets, the board recently approved an ordinance to capture prior years' general fund overhead from the capital improvements fund using the same formula — plus an acceleration factor — that is contained in the fiscal 2004 budget.

In a March 20 memo to the board, Greer wrote, "A review of prior years' history clearly indicates that the capital improvements fund played a significant part in the overspending that led to the decline in general fund cash reserves. During those periods of time, little to no general fund overhead was captured from that fund. I have caused the calculation of prior years' overhead to be completed to present the option of recapturing the costs associated with the management and operation of the street reconstruction program.''

In his memorandum, the city administrator noted that based on his calculations, $2,253,307.04 in prior years' general fund overhead could be captured from the capital improvements fund. However, Greer was quick to note he had no intention of asking aldermen to recapture the entire $2.2 million. The approved ordinance will capture $901,322.82 — 40 percent of the $2.2 million — over a 10-year period.

Trueblood said he believes the city can afford a new police building and any debate should not be over "whether we have the money.'' The "honest'' debate, he said, should be over the following questions:

• "Did we get our money's worth from the $13 million we've spent on streets in eight years?''

• "How can we be sure that in the future we will get the best bang for the buck on streets spending?''

• "What is a reasonable amount to spend and what are the features needed for the new police station?''

Trueblood said he looked forward to discussing these questions at future board meetings.

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