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Defeasance of certificates wouldn't benefit residents



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Mike Anthony
February 23, 2005 - Anyone advocating the defeasance of bond-like certificates issued by the city of Crestwood to fund a new police facility probably doesn't have a good grasp on exactly what that would mean for the city and its residents.

Crestwood voters in August 2002 approved Proposition S, the extension of a half-cent sales tax to fund construction of the new police building, fund repairs at the Government Center and allow the continuation of the city's street repair and replacement program. The half-cent, capital-improvements sales tax had been scheduled to end in 2008, but 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 a new police building and repairs to the Government Center.

Due to the rising costs of concrete and steel, aldermen last summer scrapped the construction of the stand-alone police building and decided to "retrofit'' the Government Center to include a new police facility.

Some misguided individuals have advocated defeasing the certificates, citing a savings of more than $730,000 a year for the next 18 years.

That's problematic for several reasons. First, the city's fiscal woes are related to the general fund, not the capital-improvements fund that will retire the COPs.

Second, if the COPs were defeased, it's clear that the retrofitting of the Government Center to include a new police facility won't happen for years.

Third, anyone who says that given a choice between a larger police building and more officers on the street ob-viously doesn't understand the city's finances. Revenue from the capital-improvement sales tax cannot be used for operational expenses, only capital improvements.

Lastly, if the COPs were defeased, al-dermen would have a moral obligation to return the capital-improvements sales tax to its original sunset.

Not only would there be no money for a new police facility, there would be no money after 2008 for the city's streets. That sales tax currently generates about $500,000 annually for the city's streets. We believe the only other option would be to again place the sunset extension before voters, clearly defining how the revenue would be spent, and let them decide.

It could pass or fail. That's up to the voters. But to adovcate defeasing the COPs with the idea of continuing to collect the sales tax is plain wrong.

  • Pitch It & Forget It
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