The Kirkwood City Council is counting pennies like never before—the result of $116 million in debt and a $15.6 million Electric Department overspending scandal that sent electric rates soaring.
Kirkwood’s newfound austerity emerged Thursday night when a vigorous debate broke out over whether the council should fund an extra nearly $500,000 for a card access system, fire alarm, video surveillance system, and other security features for the A-Mrazek Building, an 83,500 square-foot warehouse at 545 Leffingwell Ave. that the city plans to make into a new home for its public works departments.
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Council member Gina Jaksetic, a hard no on future funding for the project, noted the city has already borrowed $12.5 million to buy the building, plus another $8 million to retrofit it—a debt load of $39 million, if interest is included.
She said there was no point in trying to fine-tune details. “If you would change the color I would still vote no,” Jaksetic said. “We need to talk about the bigger picture.”
Deb Lavender, who joined the council in May, admitted to having reservations about the building’s purchase, but supported the idea of pushing ahead anyway. “My analogy is that I’m stuck in the mud up to my chin,” Lavender said. “But if we stop I don’t know what that gets us.”
If the council pulled the plug on the project, the city would lose up to $10 million on the deal, along with disrupting plans to sell the old public works site to a developer for $8 million, Lavender said.
Double Eagle Development, the developer, plans to build 202 housing units on the old Public Works site.
Sheila Burkett, who also joined the council in May, pushed for the upgrades for Mrazek because city workers “need better facilities to work from … they need a better environment.”
The motion passed 4-3, with Lavender, Burkett, Mayor Liz Gibbons, and Councilman Mark McLean voting yes.
The city’s money woes dominated an earlier work session discussion over the new rates the city water company plans to charge its customers.
Over the last five years, water rates have already climbed 50 percent. Under the schedule unveiled Thursday night, they would rise another 51 percent through 2037.
Council member Paul Schaefer, a proponent of exploring the idea of selling the water company, noted the city isn’t making any money from its water company—the only municipally owned one in the St. Louis region—and that it faces huge liabilities. The estimated cost of replacing the city’s leaking cast iron pipes is about $90 million over the next 10 years.
“Why are we continuing to go down this rabbit hole?” Schaefer asked. “What is the benefit other than we can walk around town and say we own our own water?”
The city took no action on the proposed schedule of water rates.
The city’s increasingly wobbly finances have become a growing source of controversy since the city council last October raised electric rates by nearly 15 percent.
The council did so to cover a surprise $15.6 million deficit caused by the fired Electric Department director’s unauthorized, no-bid spending undertaken without council approval. The scandal led to the firings last year of Electric Director Mark Petty and his boss, Russell Hawes, the former chief administrative officer.
Last week the council sent out requests for proposals as part of a plan to hire an outside firm to conduct a forensic audit to determine if the Electric Department’s overspending included fraudulent or other illegal activity. The audit could cost as much as $300,000, according to estimates.
As for the A-Mrazek Building, it’s been a simmering controversy since the council in early October 2023 agreed to buy it and nine surrounding acres for $12.5 million, even though the St. Louis County Assessor’s office appraised its value at only $3.21 million. David Sabada, who sold it to the city, had purchased it for only $2.5 million in 2014.
Tim Griffin, the city mayor in 2023, said the city hired planning firm PGAV to study a move of its public works building. Its conclusion: The city buying its own site and constructing a new facility within city boundaries would cost at least $25 million—or twice what the city was paying for A-Mrazek.
“That’s why this particular property and building made so much more sense,” Griffin told the Post-Dispatch at the time.
