Pevely Audit Released, Performance Rated Poor

22 Oct

At long last, the state auditor’s review of Pevely has been published. The city received the auditor’s worst rating: Poor. This means that:

The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management’s immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.
The results were announced last night at a public meeting at which aldermen Dave Young, Debbie Hurley, and Marlin Hahn were absent. Here are some of the highlights:
  • There was an inappropriate transfer of $200,000 from the water and sewer fund to general operations. The money has since been paid back.
  • City budgets did not meet state requirements.
  • Large purchases were not put out for bids, and attorney and accounting services were not periodically bid out.
  • The city paid over $12,000 since 2003 for the mayor’s cell phone bill (that saga led to his resignation). The documentation that he submitted was quite shoddy, including bills with totals whited-out and handwritten in.
  • As has been previously reported, taxes that were authorized were not collected for many years.
  • Utility accounts were not well-reconciled, and clerks had the ability to independently adjust accounts.
  • The city gave unlawful attendance bonuses and didn’t have employees with city vehicles track personal vs business mileage.
  • Numerous Sunshine Law violations.

Obviously, the mayor and aldermen were not doing their duties over the past years. But what about the previous city administrators, Happy Welch and Jason Eisenbeis, who now have the same job for Festus and Crystal City, respectively? This kind of stuff falls right within their responsibilities. It was the most recent administrator, Terry Thomas, who reportedly discovered some of these improprieties (although the audit was underway when the discoveries were made). I hope residents of the Twin Cities are keeping an eye on their governments. Perhaps this audit will give them an idea of places to look.

An audit was released in March on the city’s court system. It said the court did not dispose of bond money in a timely manner.

Arnold Sewer Sale: A Look at Last Time

17 Oct

As I have previously written, the city of Arnold is asking its residents to vote on November 4 to allow the sale of the city sewer system to Missouri American Water (MAW). This same issue was considered 2.5 years ago, when MAW offered the city $12 million for the system (the city owed $11 million on sewer bonds at the time). The city council voted unanimously on 2/2/2012 to reject the offer. Current city council members that participated in that vote were Phil Amato and Paul Freese.

In addition to the above terms, Utility Workers Union of America Local 355, which fought against the sale, stated that:

In its unsolicited bid to expand its empire by acquiring Arnold’s wastewater system, Missouri American Water demanded the City impose a nearly 20 percent hike in ratepayers’ sewer bills before the sale was completed. In addition, the company demanded agreement from the city that they would NOT oppose any future rate hikes requests before the Missouri Public Service Commission (PSC).

2012 Offer Rejected

Let’s look at the reasons Arnold gave for nixing the sale. Then and current mayor Ron Counts said in a press release:

Although American Water approached the city with a multi-million dollar offer, after careful evaluation of [the] matter, it was clear that not enough assurances could be provided to ensure the protection of the City’s residents or the City employees who were proposed to join American Water.

The city administrator at the time, Matt Unrein, gave a few additional reasons in a Leader article from Feb. 9:

It [the $1 million net proceeds] was not enough money to sacrifice local control.

This time around, the city will net $5.2 million in proceeds and then have access to the sewer reserve fund and its $4 million. From what I can tell from the 2012 city budget (p. 188), the sewer fund also had $4 million in it at the end of 2011, but nobody at the time seems to have mentioned adding the money to the net proceeds.

We want to make sure our (sewer department) employees are well taken care of, and as far as benefits, pay, and job security, we know we could take care of them best.

This time, MAW has agreed to hire the city’s seven sewer employees and “provide them with pay and benefits at least equal to what they have with the city.”

And here’s Unrein (who now works for the city of Ferguson) on the subject of rate increases:

With the Missouri Public Service Commission approving rate increases, there’s uncertainty there. With local control (of the system), we have the ability to run it as a break-even. They would have to make money. They’re publicly traded, and have stockholders.

Local 355 the point at the time that MAW had hiked the rates for the Cedar Hill sewer over 94% since 2007, and was asking for another hike.

2011 Mailer Opposing Sewer Sale

2011 Mailer Opposing Sewer Sale

But Unrein also said “rate increases are inevitable.” This turned out not to be true, at least in the short term. Arnold did not raise rates between then and now, and Unrein previewed the reason why: “The council is adamant it wants the cheapest rates we can have.” This failure to raise rates was short-sighted and politically motivated. Councilman Brian McArthur said on October 2 that “Everyone’s afraid to raise rates because they’re worried they will not get re-elected.”

This Time Around

This time, Arnold has threatened (in a bit of pre-election theater) to raise rates from $24.33 per month to $42.90 per month. Council member Mary Elizabeth Coleman seemed to agree about the intent of this hike when she said “It’s being done with the view to advance the sale,” according to the October 9 Leader. This hike was proposed but then tabled on October 2. MAW says its rate in 2016 will be “about $30.”

Here’s what Counts is saying this time around:

Arnold Mayor Counts said the sale looks better this time around because the city has tight finances right now and the sewer system is plagued with problems that will cost a lot to fix.

Those problems existed back then, too, though. He said in August that:

[T]he sale would benefit residents, too, because Missouri American is better equipped to fix and manage the aging sewer system.

Also, the company can operate the system more efficiently, which probably means lower sewer rates down the line.

However, the biggest differences between now and then seem to be that the city needs the money more now – as Counts indicated – and there is about $4 million more to be had, and the council can no longer avoid raising rates. Selling the sewer system brings in the money and relieves the council of the responsibility of raising rates.

Festus Elementary Gets Blue Ribbon

12 Oct

Missouri Governor Jay Nixon was in town Tuesday to celebrate the recognition of Festus Elementary as a national Blue Ribbon School. The school was one of seven public schools in Missouri and 287 nationwide to get the award from the US Department of Education. The award “honors public and private elementary, middle and high schools where students either achieve very high learning standards or are making notable improvements in closing the achievement gap, especially among disadvantaged and minority students.” Festus Elementary was also named a Blue Ribbon school in 1999.

Governor Nixon at Festus Elementary 10/7/14

This is the latest of several awards or designations the district has received, including having the county’s best APR score for two years in a row (and also placing in the STL metro area’s top 10 this year) and being named a top workplace in a Post-Dispatch survey. Festus was also the Outstanding Rural Missouri School District for 2013, as named by the Missouri Association of Rural Education.

Other schools in Jefferson County that have received this award, according to the official list, are as follows:

  • Lone Dell Elementary, Fox district, 2003
  • Brennan Woods Elementary, Northwest district, 2007
  • Cedar Springs Elementary, Northwest district, 2009

According to Festus superintendent Link Luttrell, Festus High and Middle Schools have also won Blue Ribbon status. The Festus district website lists a 2001 Blue Ribbon for the high school. However, the official list does not include either school. But the high (2002) and middle (2000) schools have both won Missouri Gold Star awards. Winning a state Gold Star award is the first step to being considered for a Blue Ribbon award. Perhaps there’s some confusion?

Pevely Election MEC Fallout

9 Oct

The 2014 Pevely alderman election was quite contentious, and the aftermath has spilled over to the Missouri Ethics Commission (MEC), which polices campaign finance laws. No fewer than five of the six candidates in that election have been subject to MEC complaints and subsequent fines for failures to adequately complete the required “paid for by” statements correctly. The sanctioned candidates, the dates of the rulings, and their fines are as follows:

The first three people on the list above won the election and now sit on the board of aldermen. Given the recent dates on the last two complaints, I would not rule out the existence of a complaint against the sixth candidate in the Pevely election, Russ Shackelford. He is mentioned in the latter two candidates’ rulings, because they all shared the costs of some candy and door hangers.

I don’t get too riled up about these fines. Campaign finance law can be difficult for newbies and non-politicians (although some of the above candidates have more experience than others). And campaigns often watch closely for, and report, violations on the other side to score points. Which is not to say that the violations did not occur – hence the MEC rulings. I just think this is a measure of the bitterness of Pevely politics, and it would be an interesting exacta if every candidate in the election received an MEC fine. Maybe it would be some sort of record.

Potty Politics in Arnold

7 Oct

No, I’m not talking about the regime’s attempts to manipulate the council and mayoral elections. Today I wish to discuss the potential sale of the Arnold sewer system to Missouri American Water. This will be on your November ballot as Prop S, Arnold residents.It should be noted that a similar effort was beaten back in 2012, with unions leading the fight.

At the August 7 Arnold city council meeting, when a crowd of angry city employees showed up to express their displeasure over a potential pay freeze and increased out-of-pocket health care costs, mayor Ron Counts had a tease for the crowd, according to the Leader:

“We’re not in a crisis yet; we’re trying to prevent one,” he said. “There is light at the end of the tunnel.” Counts said he was working on something that should help the budget but he couldn’t yet reveal what it was. “Hang in a little longer,” he said.

Well, we found out one week later, as a special council meeting was called on August 14 to vote to place on the November ballot the sale of the sewer system. The meeting was called during the last week to place items on the ballot. The meeting, which lasted seven minutes, did not include any opportunity for public comment. Phil Amato was the lone vote against the ballot measure; he wanted to investigate another entity that he thought might want to buy the sewer.

Fruits of the Sale

If approved, the city would sell the sewer system for $13.2 million. According to Yes on S Arnold (more on that later), the sale would transfer the city’s $14 million debt to the Metropolitan Sewer District (MSD) to Missouri American and eliminate the city’s $8 million bond debt. The site also states that the city will do $6 million in street and sidewalk improvements with the proceeds of the sale. The August 21 Leader reports that the city will net $5.2 million from the sale and also gain access to the $4 million sewer reserve fund, for a $9.2 windfall. At the September 18 council meeting, the mayor distributed a list (PDF – see page 5) of projects that the city would do with the cash. It was as follows:

  • Melody Lane – $2 million
  • Farmcrest – $160,000
  • Old Lemay Ferry/Richardson – $400,000
  • Ultra-thin Overlay (1 mile) – $110,880
  • 2-inch Overlay (1 mile) – $227,040
  • Concrete Streets (1 mile) – $807,840
  • Concrete Sidewalks (1 mile) – $126,720
  • Re-plaster Indoor Pool – $95,000
  • New Flooring at Rec Center – $50,000

The projects in the list would cost a total of $3,997,480, which would leave $2 million left over from that $6 million of promised improvements. A couple of council members have some other ideas, too. Phil Amato wants to put in a second outdoor water slide at the rec center, purchase the property between the Rec Center and Sherwood Elementary for an Olympic swimming pool to share with the Fox school district, and buy a snow plow. Jason Fulbright wants to get brine tanks, which have something to do with salt for the roads in winter. I’m sure there will be many more ideas.

Mounting a Campaign

The August 21 Leader article also states that Missouri American will cover the costs of the election and any marketing for the campaign. And oh, have they ever. A political action committee (PAC) called Clean Water Healthy Communities has been formed by Missouri American (the addresses of the treasurer and deputy treasurer are the same as that of the company). Missouri American has funded the PAC as follows:

  • $25,000 on 8/19/14
  • $75,000 on 9/17/14
  • $100,000 on 9/29/14

That’s $200,000 total, folks. This cash has gone towards the creation of the aforementioned website as well as a Facebook page (the page had about 40 likes when I shared it, and the next day it had about 110 – perhaps I deserve a fee from the PAC for that). However, I would argue that Arnold is participating in the campaign, in its tried and true way. The city proposed at the October 2 council meeting to raise sewer rates (PDF p. 37) from the current $73 per quarter ($24.33 per month) to $128.70 per quarter ($42.90 per month) if Prop S fails; a 76% increase . This comes across as a clear threat to voters. The rate hike was tabled at the meeting, but it gave the PAC what it needed to produce this graphic (posted on Facebook):

Yes on S Arnold graphic of potential sewer rate hikes

According to the Leader, Missouri American would not be able to raise rates until 2016, and a company spokesperson said they project to be charging $30 per month at that time. Now, the city admits that it has been derelict in raising rates. Jacob Engineering did a study in 2012 that said the city should have raised rates at that time. Their recommendation would have led to current rates of $103 per quarter (34.33 per month), with additional hikes required for improvements. In a September 11 ad in the Leader, the city said “Over the last twenty years the sewer rates were held artificially low because the City Council was reluctant to raise them.” Interpretation: they didn’t want to risk losing their council seats. Perhaps council members Paul Freese, Phil Amato, and Butch Cooley, who have spent much time on the council, should be asked about this dereliction of duty. But why not raise the rates now to $103 per quarter instead of the proposed $128.70? Not enough shock value in the lower number?

Other Arguments

While the city council members are focused on the cash windfall that would result from the sale, the other arguments the city is putting forth are that Missouri American will charge lower rates than the city (see above) and that Missouri American has the expertise to deal with increasing federal and state regulations and the resources to invest in sewer upgrades. Missouri American promises to do $5 million in immediate upgrades if the sale goes through. The company would have to go to the Public Service Commission to get approval for any rate increases, although that seems to be a low bar (witness all of Ameren’s recent rate hikes).

We are less than a month from Election Day, and this campaign is really just getting started. It was a disservice by the city to get this ball rolling so late; there will not be time to properly educate the voters about this issue. In addition, the voters probably will only hear one side of the story, as there appears to be no organized opposition to the ballot measure, and if such opposition emerges, it won’t have $200,000 to spend. Here is a collection of documents I have cited above:

Arnold Enters Office Space Biz with Corridor55

4 Oct

With a $100,000 taxpayer investment, the city of Arnold has joined the office space business by jumping on to the trendy “co-working space” bandwagon with Corridor55. These establishments allow one to rent a place to work at lower cost and lower commitment than renting one’s own office. They also offer networking possibilities with other renters. Generally, these are seen as places for hot startup internet ventures to operate, but Arnold (probably wisely) is focusing on accountant and lawyer types to fill the desks of Corridor 55, according Mary Elizabeth Coleman, the council member who spearheaded this effort, as reported in the July 24 Leader.

One of the fruits of Arnold’s $8,000 investment in news/advertising with KMOV (Channel 4) was this puff piece on the new facility, which ran in mid-September.

This new venture may or may not be a good idea for Arnold, but it is definitely not the place of government. This is nothing short of a business venture, not something a city should be involved in. The St. Louis area has several co-working spaces, and they are privately owned. You may also have heard of national chain Regus, which offers similar services at several locations in the metro area. Arnold, however, boasts that this is the first municipally-owned co-working space in Missouri. US Representative Ann Wagner, who calls herself conservative, unfortunately praised this venture and attended the ribbon-cutting. This is from an email she sent out:

I was also honored to cut the ribbon at the dedication ceremony for Corridor55 in Arnold this week.  Corridor55 is the first municipally owned co-working space and business center in Missouri.  This innovative facility will be a catalyst for small business growth in our community, creating jobs and expanding our economy.  I congratulate Mayor Counts, the Arnold City Council and the Arnold Chamber of Commerce for their vision and commitment to fostering small business.

Rep. Ann Wagner at Corridor55 ribbon-cutting. Also pictured: Council members Paul Freese, Jason Fulbright and Mary Elizabeth Coleman, Mayor Ron Counts.

If anything, this venture is displacing a local entrepreneur who might want to start such a business. Of course, the fact that nobody has done so may suggest that this project may not be viable in a place like Arnold. Another negative omen for Corridor55 is that it is located in a strip mall (behind the Culver’s there on Richardson Road) that is loaded with empty storefronts – at least 10, by my count. So now the city is competing against local business in the real estate/office space market.

This enterprise has run into some resistance. Two council members, Gary Plunk and Butch Cooley, voted against it. They thought the city had better uses for that $100,000. And in August, when the city’s bleak budget picture was revealed, at least one city employee stood up at a council meeting to criticize the appropriation for Corridor55, since employees were facing a pay freeze and increased health care costs (in the end, employees got 2% raises but did face higher out-of-pocket health costs after the city decided to start charging for trash collection).

Details of the Venture

The $100,000 the city spent will pay for a three-year lease (which seems kind of long) and furnishings for the facility.This money was added to the budget from reserve funds in April. At the time, it was slated for generic economic development. Arnold Community Development staffers are managing Corridor55 now, but the city hopes to hire a manager, which would represent an additional cost.

Corridor55 pricing is a bit lower than you will find in the city’s private co-working spaces, although the Arnold site does not appear to offer the daily and weekly plans that some other spaces do. Discounts are currently being offered.

Will this endeavor survive and thrive, or will it go down as a bad investment? While failure would vindicate my position, even if it makes money it is a clear violation of “the Yellow Pages test.”

JeffCo Police Review

30 Sep

I have updated the table to add each department’s ticketing percentage.

Since police departments in St. Louis County are under the microscope in the aftermath of events in Ferguson, I thought I would take a look at police departments here in Jefferson County. One way we can do that is through the state attorney general’s office and its vehicle stops reports.

The “Disparity Index” measures the likelihood that drivers of a given race or ethnic group are stopped based on their proportion of the residential population age 16 and over. Values greater than 1 indicate over-representation and values less that 1 indicate under-representation in traffic stops. Here’s what those numbers are for JeffCo departments:

 Disparity index for black drivers, 2013

  • Arnold                     9.22
  • Byrnes Mill            4.52
  • Crystal City            1.74
  • DeSoto                    1.77
  • Festus                     1.02
  • Herculaneum        3.20
  • Hillsboro                0.56
  • JeffCo Sheriff        2.81
  • Kimmswick            No data
  • Olympian Village  No data
  • Pevely                      4.75

Statewide, the disparity index for black drivers in 2013 was 1.59. Arnold gets hurt because its black population is only 0.5%, but blacks made up 5% of stops. Arnold’s full report is here, and it breaks down reasons for stops and goes into searches as well. Arnold’s search rates, the percentage of stops during which searches were conducted, were as follows. The Hispanic rates were based on a total of only 10 stops of Hispanic drivers in all of 2013.

2013 search rate:       White – 4.5%, Black – 10%, Hispanic – 80%    (percentage of people stopped who were searched)

Contraband hit rate: White – 20.5%, Black – 16.7%, Hispanic – 0% (percentage of searches that found contraband)

Arrest rate:                  White – 3.6%, Black – 8.1%, Hispanic – 60%   (percentage of stops that led to arrests)

For comparison, here are Ferguson’s stats (Ferguson is 63% black):

2013 search rate:        White – 6.9%, Black – 12.1%, Hispanic – 4.6% (based on 22 stops)

Contraband hit rate:  White – 34%, Black – 21.7%, Hispanic – 0%

Arrest rate:                   White – 5.3%, Black – 10.4%, Hispanic – 4.6%

Tickets and Arrests

I also looked at the number of stops and arrests for each city. This table includes traffic stops in 2013, population of those 16 years of age and older in each city, and the number of arrests in 2013 (as I understand it, these are only arrests that occur during traffic stops). I divided stops and arrests by the population to acquire rates of stops and arrests per person, to get an idea of how aggressive each department is in pulling people over, and how much crime they are encountering.

Jefferson County MO Police Stats 2013 (data from MO AG's office)

Jefferson County MO Police Stats 2013 (data from MO AG’s office)

As you can see, Pevely had the highest rate of stops, which is not surprising given Pevely’s ticket-happy reputation. Herculaneum was really high, too. Byrnes Mill was perhaps lower than one might have expected, with its reputation. As for arrests, Byrnes Mill had the highest rate. That city’s AG report indicates only one DWI arrest, which is interesting given that the city seems to hold a lot of DWI checkpoints. The number one arrest charge there was “property offense.” I’m not sure how one gets arrested for a property offense on a traffic stop (“outstanding warrant” is a separate charge). Interestingly, the entities with the most total arrests, the Sheriff’s Office and Arnold, had only six and five property offense arrests, respectively.

Update: Pevely also led the way in percentage of stops that resulted in tickets, with 94%. You probably aren’t getting away with a warning in Pevely, or Hillsboro, which ticketed 92% of the time in 2013. Crystal City, De Soto, Festus, and Herculaneum all gave tickets about half the time.

There is also some data from the state on JeffCo’s municipal courts. I hope to take a look at those numbers in a future post.

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