University City Residents File AG Complaint Over EDRST Funds

UNIVERSITY CITY, MO — Some U. City residents are again taking their complaints to the state's attorney general, this time over the city's use of its Economic Development Retail Sales Tax funds. In a letter to Missouri Attorney General Josh Hawley dated September 18, Ellen Bern and Greg Pace accuse city staff of inappropriately allocating about $133,000 without a vote of the city's EDRST board, essentially bypassing the board's recommendations.

That money is intended to pay for a new economic development director, city officials have said. Bern and Pace have also challenged the city on that point, saying state law does not permit the money to be used to fund staff positions.

The city cites an administrative exception that allows up to a quarter of EDRST funds to go to "administrative purposes, including staff and facility costs."

Bern and Pace say those administrative purposes must be directly related to the EDRST board. The city interprets the exception more broadly.

Read the full letter here:

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"I respect every citizen's right to contact the Attorney General's Office if they disagree with how local governments are interpreting State Statutes," City Manager Gregory Rose said in an email. "However, because a complaint is filed does not mean that the interpretations are wrong."

Rose said the transfer of funds was approved by the mayor and council as part of the fiscal year 2019 annual operating budget. He laid out his and the city's interpretations of state law at a study session held on September 10, and referred Patch to the minutes of that meeting for his rationale. Those minutes have not yet been posted online, but a video is available from the study session here.

Rose said at the study session that the duties of the EDRST board are limited and the board does not have an administrative oversight role.

Bern and Pace challenged that assessment in their letter to the AG. "The U. City municipal code Section 120.540 Duties of the Board, indicates that the Board shall consider all plans, hold public meetings, and recommend to the City Council how the funds should be spent," Pace wrote.

He argues that the city is effectively trying to make an end run around the board, shutting board members and the business community out of the process. "This is not the intent nor the process as outlined by state and municipal statute," Bern and Pace said.

Rose recommended during the study session that the council define "economic development project," establish criteria to evaluate those projects and define U. City's "downtown" and "historic" districts to further clarify statutes governing how EDRST money can be spent. He also suggested the city clarify the board's makeup and role going forward.

Clarification An earlier iteration of this story said about $133,000 was appropriated without a vote of the city council. As explained later in the story, the council did vote to approve that sum as part of its annual operating budget. Rather, the money was appropriated without a vote of the city's EDRST board.

Photo by J. Ryne Danielson/Patch