ST. LOUIS 鈥 Using current revenue to finance Scottrade Center renovations could reduce funding for essential services and damage the city鈥檚 credit ratings, Comptroller Darlene Green said in an email obtained by the Post-Dispatch.
Mayor Francis Slay and Board of Aldermen President Lewis Reed support a proposal to spend The work would be funded by a new 1 percent tax on event sales at Scottrade Center and possibly $4 million a year from existing sales taxes tied to Scottrade.
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鈥淎ny proposed use of current budget revenues reduces available funding for public safety and delivery of essential city services,鈥 Green said in an email to staff Thursday. Green added that new, temporary revenue sources, such as the 1 percent tax proposal, would be acceptable.
Green鈥檚 email included an analysis from a contracted city financial adviser, Rebecca Perry-Glickstein of PFM Financial Advisors, saying she was 鈥渧ery concerned鈥 about the potential impact on city finances and credit ratings.
鈥淭his concern is heightened in the face of the several other substantial projects being considered (Convention Center expansion, Major League Soccer Stadium, etc.),鈥 Perry-Glickstein wrote. 鈥淚t is not clear to me that the City can afford to commit $4 million in general fund revenue away from general fund operating needs for this sort of undertaking.鈥
Mary Ellen Ponder, Slay鈥檚 chief of staff, said the comptroller鈥檚 objections don鈥檛 prevent the proposal from moving forward.
鈥淚 expect the Board of Aldermen to consider the comptroller鈥檚 concerns in the decision,鈥 Ponder said.
A spokesman for the bill sponsor, Reed, said: 鈥淲e have not seen the comptroller鈥檚 letter. We will review it once we have seen it.鈥
Over the last year both Moody鈥檚 and Fitch credit rating agencies have reduced the city鈥檚 credit ratings, citing limited financial flexibility, a reserve shortage and high debt levels. Both remain in the 鈥淎鈥 category, meaning a relatively low credit risk, but the downward trend has been concerning to financial officers.
In May, Standard & Poor鈥檚 had reaffirmed its 鈥淎+鈥 credit rating of the city. Standard & Poor鈥檚 rated the city鈥檚 cash liquidity as 鈥渧ery strong,鈥 but Moody鈥檚 views it as 鈥渨eak and a contributing factor to the downgrade,鈥 according to an October news release from the city on the credit ratings.
Green was not available to expand on her comments, spokesman Tyson Pruitt said.
鈥淚t鈥檚 likely she may have more comments once folks have had a chance to dig a little deeper into it and look at the board bill that鈥檚 up,鈥 Pruitt said.
The bill is expected to go before the Ways & Means Committee.
The current total sales tax rate in 50度灰视频 is around 8.7 percent, but the city鈥檚 combined sales taxes amount to about 3.8 percent when state and local school board sales taxes are subtracted, city budget director Paul Payne said. Most of that goes to the general fund, capital projects and public safety, Payne said.
Laying out the proposal Tuesday, city officials and Blues hockey team executives said Scottrade currently generates $6 million in sales tax revenue a year for the city. Payne said about $3 million of that is generated by Blues events.
鈥淥bviously we have to struggle to balance the budget each year,鈥 Payne said. 鈥淓verything has to be weighed in how we balance the books.鈥
Officials are also hoping for $70.5 million from the state to fund a second phase of renovation projects, but they haven鈥檛 set a timeline for that proposal. State House and Senate leaders say they generally oppose public funding for stadiums and arenas
The city owns Scottrade Center and leases it to the Blues. The facility opened in 1994 and cost $170 million at the time with $62.4 million in tax-exempt financing.
Koran Addo of the Post-Dispatch contributed to this report.