ST. LOUIS, Mo – Today, Better Together – a grassroots project sponsored by the Missouri Council for a Better Economy (MCBE) – is releasing results of its Public Finance Study. This is the first of six community-based studies examining how municipal services are delivered to the people who live within the boundaries of St. Louis City and St. Louis County.
The Public Finance Study was conducted under the oversight of study chairman, Bob Baer, retired local business executive who is past president and CEO of Metro and has also served as chairman of the St. Louis Metropolitan Sewer District and the St. Louis Regional Convention and Sports Complex Authority. Baer authored and signed the executive summary of the report, which consists of municipal debt and revenue data collected from St. Louis City and St. Louis County, as well as the 90 municipalities and 23 fire districts within the County. All data collected was verified and compiled in a searchable database and is available to the public on the organization’s website (www.bettertogetherstl.com). Public Finance experts from Stifel provided technical assistance with compiling information and developing the database for the study.
“This project is the first endeavor of its kind,” noted Better Together Chairman, Ambassador George Herbert (Bert) Walker, III. “The data compiled in the Public Finance Study, as well as the five studies to follow, will for the first time be collected and assembled in one centralized location and made publicly available. This will enable people and organizations to have informed discussions, and put forth fact-driven proposals for what the future of the region should look like.”
The success of the Public Finance Study is in large part attributed to both the collaboration and oversight of public finance professionals as well as the cooperation of the municipalities.
“This report is not meant to compare municipalities or fire districts to each other,” said Baer. “Rather, we are analyzing how we pay for services and how those services are financed.”
The study found that the costs associated with funding all 115 governments and their collective population of 1.3 million has reached $2 billion per year, of which $1.6 billion stems from annual tax revenue with the remaining funds consisting of fees and other sources of governmental revenue streams. Additionally, the study found that these governments are responsible for more than $1.25 billion of outstanding general obligation, leasehold, COP and special obligation debt.
While the Public Finance report consists of data collected from each of the 115 governments in St. Louis City and St. Louis County, there are still some governments and municipalities that have not yet responded or continue to gather the requested information. Overall, the municipalities and fire districts, as well as the City and County, were very cooperative in the process.
In addition to the release of the study, Better Together requested and has released a legal memorandum from Polisnelli PC, which addresses questions surrounding the transfer of municipal debt. The memo, signed by attorneys Bill Kuehling and Kenny Hulshof, concludes that:
In the event the City of St. Louis became a municipality in St. Louis County and then subsequently filed for protection under Chapter 9 of the United States Bankruptcy Code, the City of St. Louis would continue to be solely responsible for its legal debts, to the extent approved by the Bankruptcy Court. Neither of St. Louis County, the State of Missouri, nor any other third party would become responsible for any of the City’s debts and/or other expenses, absent their explicit agreement to do so. There is no law (either State or Federal) or court precedent that would lead to any other conclusion.
The City of St. Louis, as employer of its police, fire and City employees, would remain responsible for any unfunded liability in the City employees’ pension systems. The act of the City of St. Louis re-entering St. Louis County as a municipality would not automatically change its status as the employer of these employees, nor change its responsibility as employer to those employees.
No existing City of St. Louis obligations would automatically become the partial or full responsibility of the County, were the City to re-enter the County as a municipality. Additionally, no future obligations of the City would automatically become the partial or full responsibility of the County after the City entered the County.
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