Several expenditures recommended by Chesterfield’s Finance and Administration Committee drew scrutiny from some members of the City Council at its Oct. 5 meeting.
The committee is comprised of council members Barbara McGuinness (Ward 1), Mary Ann Mastorakos (Ward 2), Michael Moore (Ward 3) and Tom DeCampi (Ward 4). McGuinness serves as its chair.
Among its recommendations on Oct. 5 was the approval of a special counsel agreement with Armstrong Teasdale for the financial and development issues related to the Chesterfield Mall properties and adjacent properties to the West, including Wildhorse Village.
Charges for legal services will be based on the amount of time spent by attorneys and legal assistants in performing the work. Partners, principals and/or counsels will be paid $350 per hour, associate attorneys $285 per hour and legal assistants/paralegals $195 per hour.
In particular, Armstrong Teasdale would assist with the Community Improvement District (CID) requested by Wildhorse Village developer Pearl Capital Management. CIDs are established to finance project costs such as construction, infrastructure and landscape.
A sales tax of up to 1% can be imposed if approved by a majority vote of qualified voters within the district. Chesterfield’s current tax rate is 8.738%. An additional 1% would bring it close to a 10 cent tax on every qualifying dollar spent within the district.
The boards that oversee the spending of CID sales taxes are usually controlled by the developers.
City Attorney Chris Graville said this type of specialty financing was outside his area of expertise and that Armstrong Teasdale is the best. Since the city has a long-standing relationship with the firm, the hourly rate for the city is lower than its standard compensation.
However, DeCampi referred to the CID as a “taxpayer subsidy” designed to help developers mitigate the risk.
“I’m all for paying a specialist when it’s necessary but something smells about this,” DeCampi said. “Somebody’s looking for a tax subsidy, and we’re going to hire a lawyer to explain what they’re going to do.”
Nevertheless, the council approved the special counsel agreement by a vote of 7-1 with DeCampi voting against it.
Another expenditure that raised some eyebrows was the committee’s recommendation to extend a professional services contract with Gamble Schlemeier at the rate of $40,000 per year. The company provides lobbying services.
Mayor Bob Nation noted that, in 2016, a meaningful bill passed in both houses of the legislature and was signed by then Gov. Jay Nixon that allowed the city to keep approximately $280,000 more in sales tax revenue per year.
“There are bills in Jefferson City all the time, many of them are potentially threatening to not only Chesterfield but virtually all municipalities,” Nation said. “Looking back, there are a number of things we have gone through in the last several years, and not one case I recall being disappointed in the value of their service on our behalf.”
Graville said the city has had great results with Jeff Brooks of Gamble Schlemeier on the pool sales tax bill and was instrumental in moving the use tax bill.
“We get information on the state municipal league and the local municipal league on bills of municipal interest,” Graville said. “The ability to have accessibility and real-time information has been key.”
City Administrator Mike Geisel added, “You need someone in the halls on a continuous basis with access that we don’t have to keep us informed.”
However, council member Ben Keathley (Ward 2) was not in favor of the contract renewal.
“I struggle with justifying it at this point,” Keathley said. “When the city was actively engaged in legislation like we were with the tax pool that was of direct benefit to our residents … there was certainly a return on investment. I don’t think that means we should open the door to having lobbyists on retainer all the time and taking an active role in every piece of legislation that comes across, which sometimes puts us at odds with some segments of our residents.”
DeCampi was also opposed.
“When we were trying to turn the county on its head over the tax pool, which we should have been doing, I was fully on board with that. It was an unfair situation,” DeCampi said. “When we were going after something that disruptive and that monumental, obviously we needed a lobbyist in Jeff City on our behalf.”
But DeCampi said as he sees it, this is an example of when the government puts something in the budget, and once there, it becomes difficult to remove.
“This is certainly a luxury to have a lobbyist on retainer for Chesterfield,” DeCampi said. “Here we are sending out newsletters asking for support to look at property taxes … When we have a potential dire financial situation down the road. I don’t think this is the time to be spending $40,000 per year on a political salesman in Jefferson City.”
However, the contract renewal was approved by a 5-3 vote, with DeCampi, Keathley and Michelle Ohley (Ward 4) voting against it.
Another expenditure recommended by the committee was the payment of 2021 dues to the Municipal League of Metro St. Louis in the amount of $6,410, a discount from the normal dues of $7,200.
DeCampi said he didn’t think it was worth it, given the city’s financial situation. However, that expenditure also was approved. This time by a vote of 6-2, with DeCampi and Ohley voting against it.