It’s now into December and the bond payment due on Zona Rosa’s parking garages was not paid by Platte County.
The due date on about $1 million due was Saturday, Dec. 1, and at a meeting of the Platte County Commissioners held Monday, Dec. 3 no comments were forthcoming. The same day, Platte County Circuit Court judge James Van Amburg issued an order that Platte County must set aside $763,390 in a reserve fund until conclusion of the pending lawsuit.
Previously, commissioners have said they had not decided if they would cover the payments, but said they were unlikely to without a long-range plan.
Late last week, Van Amburg denied a motion filed by UMB Bank, the trustee for the bonds, seeking an injunction to require the county to pay the 2018 shortfalls on the Zona Rosa Bonds.
In early November, the county filed a petition seeking a declaration from the circuit court regarding the legality of a demand that the county repay bonds issued in 2007 for infrastructure at Zona Rosa. Van Amburg set this matter for a bench trial on Friday, May 24, 2019.
In the petition, Platte County asserts that, contrary to the trustee’s demand, it has no obligation to make payment on the bonds. Because the bonds issued for Zona Rosa are revenue bonds, the sole source of funding for repayment comes from a 1 percent sales tax within Zona Rosa. Platte County further asserts that the trustee’s demand is contrary to the Missouri Constitution, which prevents the county from incurring debt without taxpayer approval. According to the lawsuit, the Platte County Commission has sole discretion on whether to appropriate and use taxpayer funds to pay the bonds.
For now, the payment shortfall was covered by the trustee itself from a reserve fund. Tax collections in Zona Rosa have come up short every year, but former ownership covered the shortfall until last year. The county received notice from the bond trustee in October that revenues to make the bond payment were short more than $1 million.
The commissioners’ statement that they would not cover payments without a plan made earlier this year sparked off retaliatory strikes from credit rating organizations. In September, Moody’s and Standard and Poors reduced the county’s credit rating. Since the suit was filed in November, Standard and Poors reduced Platte County’s bonds to junk rating.
Platte County’s reputation among investors has taken a hit, with several industry publications blasting the commission’s move. The situation has affected other bonds held by the county and could make securing funding for any future project — such as the construction of a new detention center — difficult.