Springfield seeks police-fire pension tax renewal

On April 8, voters in Springfield and Nixa will decide the fate of tax issues related to a once controversial police-fire pension sales tax and a bond request that would add $9.5 million to the Nixa Public Schools’ debt.

While the Springfield tax has business support and doesn’t appear to have any organized opposition, a statewide group based in St. Louis and backed by conservative activist Rex Sinquefield wants Nixa residents to question the way in which the school district issues its bonds.

Springfield pension tax
Springfield City Manager Greg Burris said renewing the police-fire pension sales tax is not only critical to shoring up the pension fund, but also could save the city’s bond rating. At a recent City Council meeting, Burris said the underwriter of bonds issued in 2002 and 2004 noted if the sales tax was repealed, the city’s credit rating could be downgraded. Council approved a bond refinancing in February that reduced debt service by $2.8 million during the life of the bonds.

Burris said last week failure to renew the pension sales tax would immediately trigger a hiring freeze, and positions lost through attrition would not be replaced. He said the lost tax revenue would create a $9 million hole annually in the city’s general fund. Since the tax was approved in November 2009, it has generated $83.5 million for the fund, which was valued in February at $289.8 million.

But Burris isn’t too worried the tax would be repealed.

“You can never take anything for granted, but I feel as good about this election as I have for any election, primarily because we have done everything we committed to do,” Burris said. “The fund is making tremendous progress, and the citizens recognize we have kept our commitments.”

Those commitments, made to residents after a 1-cent pension tax failed by a slim margin in early 2009, include directing the tax dollars exclusively to the pension fund, withholding new tax proposals by the city during the life of the tax and closing the pension plan to new members.

On election day, Springfield residents will be asked to repeal the 3/4-cent Police-Fire Pension Sales Tax. A ‘no’ vote would keep it in place another five years.

Springfield’s police-fire pension plan was $200 million underfunded in 2009, and now is roughly $125 million under where it needs to be in order to be 100 percent funded and fully sustainable, according to SpringfieldMo.gov.

As of mid-March, the closed pension fund was roughly 75 percent funded.

“It’s a little ahead of where we thought we would be at this point,” Burris said. “The market has performed well.”

In recent months, Burris, Police Chief Paul Williams and other community leaders have made nearly 50 presentations to educate the public on the fund status and explain what might occur if the repeal vote is successful.

“What we are seeing is a lot of head nods, and a lot of people commenting that this is the right thing to do. So I feel pretty good,” Burris said, noting officials anticipated the tax would likely need to be renewed for another five years to create a sustainable fund.

“We knew we had a good story to tell, it is just telling that story in a way that makes sense to people,” Burris said.

Nixa bond issue
Nixa Superintendent Stephen Kleinsmith said the district is seeking the bond approval to forward plans for a second phase of facility improvements at Nixa junior and high schools.

“This is part of our 10-year master-facilities plan,” Kleinsmith said, adding the bond would not increase the current tax levy. “Phase I was passed by 78 percent of the voters two years ago, and we’ve now completed all the work for Phase I.”

The $9.5 million bond issue would fund a new junior high commons area and lunchroom, a new secure entrance, additional classroom space as well as money to remodel band, music and science rooms at the school. In addition, the district would construct two tornado shelters – spaces that are 75 percent funded by federal grants. One shelter would be built at the high school and double as a weight room and wrestling room, and the junior high shelter also would serve as a basketball and volleyball court and wrestling room.

He said the master facilities plan was developed for the district because of its rapid growth in recent years. Since 2000, Nixa Public Schools has added 2,400 new students, almost doubling the district’s population to nearly 6,000 in the current year.

A pair of mailings with political flair have hit Nixa mailboxes in recent weeks and drawn the ire of Kleinsmith, who sees them as a threat to the bond issue being passed.

“We think it is important that voters have all the information possible,” said Todd Abrajano, an adviser for St. Louis-based Missouri Club for Growth, the organization that spent more than $10,000 on two mailings in the Christian County city.

Abrajano said the organization is a 501(c)4, and that it lobbied last year for the broad-based tax cut measure that failed in the veto session. He said while the group follows political issues across the state, this is the first time it has worked to educate voters about a school bond issue.  

While the nonprofit can neither advocate for nor against ballot issues, Abrajano said Missouri Club for Growth wants voters to know Nixa Public Schools has used and is planning to use a negotiated bond sale rather than a competitive bid process.

In the fliers, Missouri Club for Growth points to a November 2013 Missouri state auditor’s report that found if some 500 bonds issued in the state between 2008 and 2011 had been competitive – 88 percent were negotiated – taxpayers could have saved an estimated $43 million. According to the report, Nixa Public Schools had three negotiated bond sales totaling $10.9 million between 2008 and 2011.

“Why should taxpayers foot the bill?” Abrajano asked, referring to the costlier negotiated bond sales.

Brenda Rantz, executive director of finance for the district, said negotiated sales ensure that local parties can buy the bonds, something that is not guaranteed in a competitive process.

Zac Rantz, director of communication for Nixa Public Schools, said competitive sales also have more upfront costs and there are no assurances that a competitive process would reduce overall costs. He also pointed to a 2006 study by Joseph Haslag, the Kenneth Lay Chair in economics at the University of Missouri, that concluded there is no systematic difference in rates for negotiated bonds and bonds issued through the competitive process.

In one of the three versions circulating, a flier with a manila folder labeled “Secret” says, “When it comes to the Nixa school bonding proposal … they aren’t telling you that their ‘no tax hike’ rhetoric masks the fact that this proposal will make a tax reduction impossible for many more years.”

Another flier targets the bond underwriters, claiming they’re known to shower officials with gifts and event tickets. “Are Nixa taxpayers being victimized by corruption, conflict of interest and shady business dealings”? the Club for Growth asks.

Kleinsmith said he doesn’t appreciate an outside group mailing to Nixa residents, and he disputes the claims.

“The average school in the state spends $2,100 more per student per year than Nixa Public Schools does,” Kleinsmith said, citing Missouri Department of Elementary and Secondary Education data. “We get a lot of bang for our buck in educating our 6,000 students.”