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Independence, MO —
Some Independence residents have raised concerns about whether using utility funds to make payments on The Falls at Crackerneck Creek violates the City Charter.
At the request of District 4 Council Member Eileen Weir Monday night, City Counselor Dayla Bishop Schwartz will provide additional information on the matter and its legality at an upcoming council meeting. City Manager Robert Heacock said his decision to allocate some utility funds toward the debt service payments is legal and isn’t a violation of the City Charter.
“I don’t think there is anything inappropriate with the action we’re taking,” Heacock said, adding that he sought advice from the legal department before making the recommendation.
The proposed 2012-13 budget, scheduled for a council vote on June 18, includes $4,571,206 from the general fund and $221,272 from utility funds for the debt service payments, which take place on Sept. 1 and March 1 of each year. The shortfall is taking place because the development, to date, has not generated enough revenue based on initial projections when the project was announced in 2004.
The specific breakdown among the utilities include $74,586, electric; $64,641, water; and $82,045, sanitary sewer. These amounts were based upon the share of reimbursable project costs that were bonded.
“This allocation seems warranted,” Heacock wrote in a memorandum to council members, “given the original economic benefit that was anticipated and the nature of the particular infrastructure investment that was made.”
Weir asked for clarification on the matter because the City Charter states the electric utility and other public utilities must be operated separately from the general fund.
“I think there still is concern from rate payers on how that money is being allocated toward that debt,” Weir said. “The charter does read fairly clearly to those citizens who have taken the time to read it about how that money ... can be used.”
The question, Heacock said, should really be why the general fund would want to subsidize what is the responsibility of the utilities.
“It is an unfortunate situation, as we’ve indicated in the past, that the projected revenues have not come forward as we thought originally when this project was contemplated,” Heacock said. “... It’s a small amount in the scope of things. Even if it’s $1, we want to make sure that it’s appropriate, and I believe that it is, based on the information that I’ve been provided.”
Since March 2011, the city has paid a portion of the debt service payments for The Falls development, which includes Bass Pro Shops, Hobby Lobby, Mardel and Cheddar’s Casual Café, to protect its credit rating. The 2012-13 proposed budget, however, is the first that has considered the use of utility funds to go toward the projected shortfall for The Falls at Crackerneck Creek.
“What we’re doing here is not anything different than we do in a lot of other instances,” Heacock said. “It just happens to be part of this project and an unfortunate situation where the projected revenues from this project have not come to fruition.”
Some Independence residents have raised concerns about whether using utility funds to make payments on The Falls at Crackerneck Creek violates the City Charter.
At the request of District 4 Council Member Eileen Weir Monday night, City Counselor Dayla Bishop Schwartz will provide additional information on the matter and its legality at an upcoming council meeting. City Manager Robert Heacock said his decision to allocate some utility funds toward the debt service payments is legal and isn’t a violation of the City Charter.
“I don’t think there is anything inappropriate with the action we’re taking,” Heacock said, adding that he sought advice from the legal department before making the recommendation.
The proposed 2012-13 budget, scheduled for a council vote on June 18, includes $4,571,206 from the general fund and $221,272 from utility funds for the debt service payments, which take place on Sept. 1 and March 1 of each year. The shortfall is taking place because the development, to date, has not generated enough revenue based on initial projections when the project was announced in 2004.
The specific breakdown among the utilities include $74,586, electric; $64,641, water; and $82,045, sanitary sewer. These amounts were based upon the share of reimbursable project costs that were bonded.
“This allocation seems warranted,” Heacock wrote in a memorandum to council members, “given the original economic benefit that was anticipated and the nature of the particular infrastructure investment that was made.”
Weir asked for clarification on the matter because the City Charter states the electric utility and other public utilities must be operated separately from the general fund.
“I think there still is concern from rate payers on how that money is being allocated toward that debt,” Weir said. “The charter does read fairly clearly to those citizens who have taken the time to read it about how that money ... can be used.”
The question, Heacock said, should really be why the general fund would want to subsidize what is the responsibility of the utilities.
“It is an unfortunate situation, as we’ve indicated in the past, that the projected revenues have not come forward as we thought originally when this project was contemplated,” Heacock said. “... It’s a small amount in the scope of things. Even if it’s $1, we want to make sure that it’s appropriate, and I believe that it is, based on the information that I’ve been provided.”
Since March 2011, the city has paid a portion of the debt service payments for The Falls development, which includes Bass Pro Shops, Hobby Lobby, Mardel and Cheddar’s Casual Café, to protect its credit rating. The 2012-13 proposed budget, however, is the first that has considered the use of utility funds to go toward the projected shortfall for The Falls at Crackerneck Creek.
“What we’re doing here is not anything different than we do in a lot of other instances,” Heacock said. “It just happens to be part of this project and an unfortunate situation where the projected revenues from this project have not come to fruition.”
