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This bond does not include funding for building an indoor pool. It does fund a planned water park that lays the foundation for an indoor pool to be built if the community chooses to approve funding for that project in the future.
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Proposition W is a choice on the April 2 ballot for Webster Groves residents. If it passes, the City of Webster Groves will issue bonds for $22.1 million, and use the funds to create new, and improve existing, recreational facilities across the City. There is no tax rate increase included in this measure.
The funds would be used to build and improve parks and recreation facilities across Webster Groves. This will likely include:
No. There is not a tax rate increase included in this ballot measure, or in issuing these bonds.
These projects would take place over the next 5 years.
Tuesday, April 2, 2024
www.WebsterGrovesMO.gov/DestinationWG provides information on Proposition W. If the measure passes, updates on the funded projects will be available on that page going forward.
Bonding is a process for cities to issue debt to use as capital revenue, which are backed by a dedicated revenue stream. The bonds that are issued are tax-free under IRS rules and are more desirable to buyers to use as a way to reduce tax liability for gains. A city is an “issuer” that issues a bond of a certain amount to a buyer, who is then paid back over a set number of years with interest.
Before any bonds can be issued, the citizens of Webster Groves must vote to authorize the issuance of bonds. If the authorization is given by the voters, the City can then proceed to issue the bonds, up to the amount authorized.
The revenue created from general obligation bonds can be used for capital expenses, not operating costs. Capital expenses are the constructions costs, purchases of machinery and infrastructure, land purchases, etc. Operating costs, such as staffing, utilities, and supplies, cannot be funded by general obligation bond revenue.
Proposition W is on the ballot in April 2024. It, if passed, would authorize the City to issue up to $22.1 million dollars of general obligation bonds for the purposes of capital improvements to the Parks and Recreation facilities of the city, including the waterpark (aquatic center).
Under state law, a general obligation bond election held in April of an even-numbered year, must have Yes votes exceeding 4/7 of the votes cast or greater than 57.14% voting Yes.
Under state law, an election question must be limited to a single-similar subject. In the case of Proposition W, the bonding authority is related to improvements in the Parks and Recreation department. It would violate the single-subject standard to pair unalike projects together. As an example, Parks and Recreation couldn’t be paired with a new Public Works building, since the voters have the right to say Yes or No to each of the subjects in the election question.
Webster Groves has a separate property tax levy for paying off debt. Under state law, Webster Groves can only tax for debt service for the amount of debt we expect to pay back in a year, plus one year’s reserves. The current tax rate is $0.201 cents per $100 of property value. Because we have debt capacity opening this year by paying off other debt (see below), we can use that same capacity without raising the tax rate. This means, if Proposition W is passed the debt service tax rate will remain at $0.201 cents per $100/value.
In March of 2024, the City will issue the final repayment of debt for the 2011 Concrete Road Replacement Project. With this debt paid, the existing property tax rate of $0.201 cents per $100/value can be authorized and will support bonding for $22.1 million dollars.
If the residents of the city wish to keep the debt capacity of $22.1 million available to use in the Parks and Recreation department, this action is needed before October 1, 2024. Because the debt from the 2011 Concrete Road Replacement Project will be retired in the spring of 2024, the tax rate will be required to be reduced under state law, unless the voters authorize new debt. This means that if the voters wish to not increase taxes in the future, the action to authorize the debt is needed in early 2024. For example, an election held in November of 2024 would be after the tax rate was reduced and would therefore be a tax-rate increase election.
The Aquatic Center opened in the summer of 1995, making it 29 years old this year.
For the last ten years the City has been completing routine and capital repair maintenance to keep the Aquatic Center operational. This has included over $700,000 in leak detection, concrete repair, new slides and play features, replacing shade structures and more.
At its current age, future continual repair and replacement of the aging infrastructure of the current Aquatic Center is not financially prudent. In addition, the 29-year-old facility does not match up to today’s standards for swimming and diving competitions. For instance, we are not allowed to purchase and install a replacement diving board for the one that cracked last summer. The remaining diving board is safe and is grandfathered in, but to add a new one would require conforming to today’s new depth regulations.
The City has researched and considered the indoor option. As part of the 2023 Aquatic Center Master Plan our consultants from Counsilman-Hunsaker: Aquatics for Life provided cost estimates to construct a seasonal temporary enclosure over a renovated outdoor competition pool at approximately $3,800,000. We also looked at a stand-alone indoor competition pool, for which cost would have been well over $10,000,000.
In addition to the construction cost, the estimated yearly ongoing operating expenses would start at $497,890, with revenue of $258,361. That is a cost recovery of only 52%, and would lead to deficit spending of $239,529 in year one, with certain escalation due to wage increase and other inflationary cost over the years.
As part of the master plan, the City and Counsilman-Hunsaker researched the operation cost recovery of other indoor pools in our region and state. Not a single municipal, high school, or collegiate pool we received information neared a breakeven cost recovery.
At this time, the City Council, on recommendation from staff, are moving forward with planning and design of the replacement for the outdoor water park, with design considerations to be able to add a temporary seasonal structure over the outdoor competition pool to make a year-round facility.
Separate funding from Prop W would need to be secured and allocated to cover the additional budgetary deficit to operate a full year facility.
Webster Groves School District, Nerinx Hall, Webster University, recreational and club level swim teams, and multiple surrounding cities were all invited to focus groups during the master planning process to discuss this question.
Several other meetings and discussion have occurred since those initial meetings. Some entities have declined to participate at all, while others have offered to rent lap lanes. None of those entities have offered to be a partner in constructing or operating an indoor facility.
The revenue forecasted in the Master Plan does account for lap lane rentals of a potential indoor facility. Even with those potential rentals (plus memberships, daily admissions, swim lessons, and water fitness) the facility would still operate a loss every single year it would be open.