Board eyes ordinance to defease certificates
August 24, 2005 - Fifth in a series
By MIKE ANTHONY
An ordinance authorizing the defeasance of bond-like certificates issued to fund the construction of a new police station was scheduled to be considered earlier this week by the Crestwood Board of Aldermen.
The Board of Aldermen was scheduled to meet Tuesday night — after the Call went to press.
Aldermen last month adopted a resolution authorizing City Administrator Don Greer to initiate the process of defeasing the certificates issued in late 2002 to fund the construction of the police facility. The resolution states the board intends to defease the certificates before Oct. 15 when a principal and interest payment totaling roughly $553,500 is due.
Defeasing the balance of the $9.83 million in certificates of participation, or COPs, issued to fund the police facility would bring an end to the project, which has become a focal point of residents' dissatisfaction with the city's precarious financial condition.
Roughly $1.6 million has been spent to date on the project.
Voters in August 2002 approved Prop-osition S, the extension of a half-cent sales tax to fund construction of a 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 the COPs to fund the construction of the new police building and repairs to the Govern-ment Center.
As the Crestwood Board of Aldermen moves toward halting the construction of the police facility, the Call continues its re-view of the project that dates back more than five years ago to May 2000.
The fifth installment of the chronology of the police facility project, based on city documents and published accounts in the Call, picks up in November 2004:
• Nov. 15, 2004 — During a town-hall meeting sponsored by Ward 3 Aldermen Don Maddox and Jerry Miguel, resident Roger Anderson contended the city should contract with St. Louis County for police protection just as the city of Fenton does.
"... You have got a $1.5 million savings by going to the county,'' Anderson said, as a number of people yelled, "No.''
Anderson continued, "There's $1.5 million there. Don't build the police station and you've got $733,000. You're going to have to do something to recover this money. You're not going to recover it by what you're talking about.''
During the town-hall meeting, Miguel advocated placing the police facility project on hold, noting that would involve de-feasing the certificates of participation issued to fund the new police building.
"... People that I've talked to that explained it to me have told me that — that explained the process to me — I put the numbers to it and what I came down to was that it would reduce the annual expenditures to the city by $450,000 a year for the next three years. There's a 2007 call feature on the bonds ...,'' he said.
After 2007, Miguel said, the debt would be retired, freeing up $733,000 annually.
Maddox said, "That, however, does nothing to solve the problem with the general fund.''
Dec. 14, 2004 — No further discussions of eliminating or "outsourcing'' the Police Department or Fire Department will be considered by the Crestwood Board of Aldermen. Aldermen voted 5-3 to close any discussion about eliminating or outsourcing the Police Department or Fire Department and "clearly affirm its intention to maintain the city's fire services and its Police Department,'' according to the motion made by Ward 1 Alderman Rich-ard LaBore and seconded by Ward 1 Al-derman Richard Breeding.
Though Breeding seconded the motion, he voted against it along with Maddox and Miguel.
The discussion of the city's Police and Fire departments came before aldermen conducted a public hearing on the fiscal 2005 budget, which was adopted.
Regarding the discussion of the Police and Fire departments, LaBore distributed a memorandum to aldermen, sharing some observations about outsourcing public safety services.
Contracting with a fire protection district, the memo stated, would "result in significantly higher costs to the residents and no increased services to the residents.'' While the cost of contracting with St. Louis County for police service currently cannot be estimated, if money was saved, "the police services received will be significantly less than what the residents of Crestwood are used to receiving,'' the memo stated.
Dec. 29, 2004 — During a work session to discuss the possibility of placing a general obligation bond issue on the April ballot, Greer suggests Board of Aldermen should consider defeasing the bond-like certificates issued to fund the construction of a new police facility.
In suggesting that aldermen consider defeasing the COPs, Greer said he be-lieved it would help improve the chances of obtaining voter approval of a general obligation bond issue the Board of Aldermen is considering placing on the April 5 ballot.
However, defeasing the certificates would not improve the health of the city's general fund, he said.
As suggested by Greer, who also serves as police chief, an escrow account would be established to meet the obligations owed to certificate holders until the certificates can be retired.
Jan. 11, 2005 — The Board of Aldermen voted 7-0 with Miguel abstaining to place a $6 million general obligation bond issue on the April 5 ballot.
A four-sevenths supermajority vote will be required to approve the bond issue, which would increase the city's property tax rate by roughly 30 cents for a 10-year period until the bonds are retired.
The city's current property tax rate is 25 cents per $100 of assessed valuation.
The Board of Aldermen voted 6-2 to proceed with the retrofitting of City Hall to include a new police facility, estimated at nearly $8 million, with Miguel and Mad-dox opposed.
Aldermen discussed at length whether to defease the bond-like certificates issued to fund improvements and voted 6-2 to defeat a motion to halt all work on the Government Center and defease the COPs. Miguel and Maddox were in favor.
The chronology continues next week.