Prop-A Financial Review

This is the third installment in a short series of articles that I am posting regarding Proposition A.
Master Plan - In the first post, we reviewed the Parks Master Plan's critical role in shaping Proposition A, detailing how community feedback led to prioritizing projects like a new community center and park improvements. These efforts align closely with residents' most requested enhancements, ensuring Prop-A truly reflects our collective vision for Crestwood's future.
Community Center - In the second article, we had fun taking a virtual tour of the proposed new community center that will feature important amenities including an elevated indoor walking track, expanded fitness areas, and versatile gathering spaces. These features underscore the center's aim to foster wellness, community engagement, and recreational activities for all Crestwood residents.
Finances - This time let’s talk about the costs, the bond issue, and what it would mean for your monthly mortgage payment (or annual property tax payment). Let's also compare Crestwood's property tax rate to our neighbors.
Park Improvements - Check back next time for more details on the remaining Prop-A improvements planned for Whitecliff and Crestwood Parks including the Pickleball and Family Events center, a 1.25 mile loop trail, pedestrian bridge, native playscape, and new playground.

The Ballot and the Bond

On the April 2 ballot, Crestwood residents will be asked to weigh in on a $33 million bond issue called Proposition A. If approved, it will allow the City to make the most significant park improvements in decades.

Ballot Language:

Shall the City of Crestwood, Missouri, issue its general obligation bonds in an amount not to exceed $33,340,000 for the purpose of constructing, furnishing and equipping a new community center, renovating existing recreation facilities, and undertaking other park and recreation improvements in and adjacent to City of Crestwood parks?

Prop-A will require 57% "yes" ballots from the voters to pass. If approved then the city will be authorized to issue municipal bonds that can only be used for the park projects described (new community center, renovating existing community center, and the other park improvements planned for Whitecliff Park and Crestwood Park).

A Municipal Bond (often called a “Muni”) is like a loan but instead of a mortgage, shares of the bond are sold through the market to investors. Basically, the city will issue the bonds, receive the funds, and then will pay it back with interest over a 20-year term. Bonds allow the city to get lower interest rates than a typical loan. The current muni bond interest rate is close to 4%.

Crestwood last issued bonds in 2001 for the Aquatic Center, and before that, you have to go back to 1974 when the city issued bonds to construct the original community center. All bonds have long since been paid off.

Estimated Costs of Prop-A Projects

Project Cost
Build the New Community Center $22,552,061
Renovations to Existing Community Center $2,570,807
Whitecliff and Crestwood Park Improvements $2,568,000
Overall Project Design, furnishings, equipment, contingency, etc. $5,649,132
Total: $33,340,000

Clearly the biggest part of the project will be the new Community Center. Crestwood worked with multiple design firms to determine the size and layout of the building. Studies including core drilling and dig pits were performed at the ballfield to ensure the site is suitable (which it is). Multiple iterations of cost estimates were performed and projected inflation rates were also included to provide the best possible price forecasts.

That said – we all know that predicting future costs can sometimes be tricky, so there is a chance that costs will come in higher or lower. If needed, the City could provide additional funding to close any funding gaps. In the worst-case scenario, some projects may be scaled back if costs significantly escalate.

Impact to your Mortgage Payment?

The exact amount will depend on the appraised value of your home and the interest rate the city can obtain when the bonds are issued (which will be determined after the election). The below table shows the estimated monthly increase for a variety of home values assuming current interest rates. The average residential appraised value in Crestwood is about $240,000 (highlighted below).

Appraised Value Monthly Property Tax Increase Annual Property Tax Increase
$100,000 $8.23 $98.80
$150,000 $12.35 $148.20
$200,000 $16.47 $197.60
$240,000 $19.76 $237.12
$250,000 $20.58 $247.00
$300,000 $24.70 $296.40
$350,000 $28.82 $345.80

To calculate an estimate for your home, visit the St. Louis County Real Estate website, search for your address, then look at your “2023 Appraised Total”. Pull out a calculator and divide that amount by 12,145 to get your monthly estimate.

Note – The St. Louis County senior property tax freeze does not apply to municipal general obligation bonds, meaning everyone will contribute to this project.

Comparing Property Tax Rates

As you probably know, your property tax payment funds many important public services. In Crestwood it’s divided as follows (2023 rates, per St. Louis County):

As stated earlier, the average home in Crestwood has a 2023 Appraised Total of around $240,000. Let’s compare the total property taxes paid for a $240,000 appraised value home in Crestwood and our neighboring municipalities (rates per St. Louis County)…

Home Location
($240K Appraised Value)
Total Annual Tax Difference
Crestwood $2,905
Grantwood Village $3,247 $342
Webster Groves $3,266 $360
Sunset Hills $3,279 $373
Shrewsbury $3,443 $538
Affton $3,581 $676

As you can see, Crestwood residents pay a lower tax than our neighbors and will continue to do so if Prop-A passes. Crestwood remains an attractive and affordable place to live, balancing quality community amenities with sensible tax rates.

Operational Savings and Efficiency

The bond will cover the upfront costs of building the community center but what about the ongoing costs to run it?

Most community centers in the St. Louis area have a recovery rate of 80-100%. In other words, the revenues from programs and events cover 80-100% of the costs to run the facility. Despite hard work and efforts by Crestwood staff, the payback rate of our existing community center has ranged from 35% - 55% representing an annual “loss” of $366K.

This means that city funds are subsidizing the community center at a rate higher than it could be. This is primarily due to the limited space and features of our existing building. There simply aren’t the spaces needed to provide additional programming options, a fitness area compelling to visitors, or an event space attractive to families and organizers.

City staff performed a fairly exhaustive study and developed a pro-forma which concluded that the new community center and the renovated version of the existing center can run at standard recovery rates of around 80%. In other words, going forward the city will substantially reduce the amount of "subsidies" to the community center, saving nearly $2M over the next 10 years.

[UPDATE] – In mid-March a resident started handing out flyers with misinformation and encouraging residents to vote no because of that info. In that flyer the author claimed that the city’s “subsidy” of the community center would increase because of Prop-A. This is 100% false and in fact the OPPOSITE is true. After the new community center is running, the city forecasts that this subsidy will be substantially reduced – saving the city nearly $2M over the next 10 years (just like it says above). That same flyer had about a dozen incorrect/misleading claims.

Honesty and Integrity are super-important to me, and I stand by everything I publish. If you ever have a question or concern – just let me know.

A Positive Impact on Property Values

Investment in community infrastructure has consistently shown to have a positive impact on property values. Enhanced parks and a state-of-the-art community center will make Crestwood even more desirable for current and prospective residents, potentially boosting property values across our city.

This phenomenon is often referred to as the "proximity principle," where properties located near these improved public amenities see an uptick in value, as they are highly prized by homebuyers – that would include all of Crestwood. The enhancements proposed under Proposition A at Whitecliff and Crestwood Park aren’t just about enhancing lifestyle; it's also about making a wise investment in our community's economic foundation.

Long-Term Benefits

While the focus may often shift to the immediate financial outlay, the long-term benefits of Proposition A cannot be overstated. Improved recreational and community facilities attract new residents and businesses, fostering economic growth and enhancing the vibrancy of Crestwood. This proposition is a forward-looking investment, positioning Crestwood as a thriving, attractive community for decades to come.

I’m sure glad that voters approved that bond issue back in 1974 and supported the construction and later improvements to the Aquatic Center. Families have enjoyed those great amenities for decades, and now is our chance to invest for our future generations. I’m looking forward; and know that most of Crestwood does the same.

Next Time

Here's a LINK to the final installment of Prop-A articles. We will check out the other park improvements planned, including the Pickleball and Family Games Complex, Pedestrian Bridge to the Lodge Pole neighborhood, new Loop Trail and Nature Playscape at Whitecliff, and a new Playground at Crestwood Park. Can’t wait!

Learn More

We have already had one Town Hall / Open House and resident response was excellent. Join us for more focused discussions on Prop-A at the Community Center in Whitecliff Park for additional open house events:

  • Tuesday, March 19, 2024, from 6:00-8:00 P.M.
  • Wednesday, March 27, 2024, from 6:00-8:00 P.M.
  • Saturday, March 30, 2024, from 10:00 A.M. - Noon

Find additional resources here:

Remember to Vote on April 2!