Group seeks public vote on Metro bonds
September 14, 2005 - By LAURA UHLMANSIEK
A citizens' group collected 950 signatures last week as the first phase of the referendum process in an effort to stop the County Council from authorizing Metro to issue an additional $150 million in bonds.
The County Council approved an amendment to its agreement Aug. 30 with Metro that authorizes the issuance of the bonds after Metro reported its project to extend MetroLink from Forest Park to Shrews-bury is $132 million over budget, bringing the total cost to $682 million.
The citizens' group, called the Public Transit Accountability Project, submitted its petitions Sept. 9 in an effort to place the ordinance before voters for approval.
"This referendum will give voters the right to have some say in how Metro is spending their tax dollars," Richard Dock-ett, a member of the group, stated in a press release.
If the petition has 500 valid signatures of registered voters, then the enactment of the ordinance will be postponed 40 days. The group then must submit a second petition within those 40 days that proposes a referendum on the ordinance. The petition must have enough registered voters' signatures to equal 5 percent of the votes cast for governor in each of the seven council districts last November.
If the group meets the requirements, the ordinance will be up for voters' approval at the next general election that is sixty days after the petitions are filed.
Larry Salci, president and CEO of Metro, asked the County Council for $150 million in bonds to cover the increase in project costs, $14 million to cover the next three years' of interest payments and $600,000 for issuance costs.
The bonds would be used to finish the eight-mile extension project, which will have nine stations and will begin at the existing Forest Park station and extend to University City, Clayton, Brentwood, Rich-mond Heights, Maplewood and Shrewsbury as well as St. Louis City.
The bonds authorized in the agreement are secured by the city and the county and are repaid with the Proposition M quarter-cent sales tax, which was approved in 1994 by voters as a source of funds for public transportation purposes.
The city, county and Metro entered an agreement in November 2002, authorizing Metro to issue bonds to finance the extension project that would be repaid by the sales tax. The agreement stated that the bonds' principal amount could not exceed $450 million. The agency sold $414 million in bonds to pay for the extension.
The amendment the County Council approved Aug. 30 allows the agency to issue additional bonds, but not to exceed $565 million — just enough to allow the additional $150 million Metro said is necessary to complete the project.
The County Council voted 6-1 to authorize the issuance of the additional bonds. Councilman Gregory Quinn, R-west county, was opposed.
Metro has filed a suit in St. Louis County Circuit Court against Cross County Col-laborative and has agreed to apply any of the proceeds to retire the bonds. Metro had hired the collaborative to design and manage the extension project, but fired the company last year and blames the collaborative for design errors and negligent construction management that has increased the cost and delayed the project's completion date from May 2006 to February 2007.
"The only way we can recover the damages we have suffered is of course through the lawsuit," Salci told the council.
Salci said Metro has taken over the management of the project, which now is 70 percent complete, and has moved the completion date to September or October of 2006. Salci also said that a referendum is unnecessary.
"I know there are people who are basically saying this issue should be voted on by the people, particularly the financing," Salci said. "I find that hard to even fathom, the thought of having to delay this project for 15 or 18 months, based on the vote of the people for a project that was decided several years ago."
Tom Sullivan, treasurer of the citizens' group, stated in a press release that the agency has a lack of accountability to the public. He had led a successful campaign in 1997 that defeated a quarter-cent tax rate hike Metro said would be used to extend MetroLink in several directions.
After the 1997 defeat, the County Coun-cil authorized Metro, then known as Bi-State, to sell the $414 million in bonds for the extension.
Sullivan labeled this as an end-run around voters.
"With the $150 million additional bond authorization, the total bond authorization would go to $565 million for the cross-county MetroLink project,'' Sullivan stated. "None of the bonds received voter ap-proval."
Salci told the council that if the referendum were to follow through, the demobilization process would at least cost an additional $30 million to $40 million.
"We had enough cash in March to carry this project through the fall, and we still are in good shape," Salci said. "If this financing doesn't go through and we don't have financing, the supplemental cash, in place within the next 60 days, we're going to start having cash flow problems because we are not going to be able to meet the cash flow needs of our contractors."
Opponents of the amendment said the County Council should wait for the state auditor to complete the audit of the agency before authorizing the issuance of additional bonds to the agency.
Salci said an audit is not the answer to the agency's problem.