Commissioners amend ordinance county-backed bonds

In reaction to the financial woes of the Zona Rosa shopping district and a decision made more than a decade ago by a previous county commission, the current commissioners are changing county ordinance to protect taxpayers from future potentially bad investments.

At the Monday, April 16 regular administrative session, commissioners unanimously approved an order amending county ordinance to require a vote of the people to approve any action by the current or future county commissions to use an annual appropriation to guarantee bonds issued by other authorities.

Presiding commissioner Ron Schieber said the move was made as a taxpayer protection and the commission will continue to work on other ways to protect county taxpayers.

Written by county attorney Bob Shaw, the amendment bars the commission from making the decision to tie any outside funding proposal to county funds. It includes a sample of ballot language for any future proposals, which shall state the name of the party issuing bonds and for what purpose. Any ballot issue would require a simple majority to pass and would authorize the commission to approve the annual appropriation of credit.

“I believe the Platte County taxpayers have been used and abused for far too long by people who were supposed to be protecting their financial interests,” said first district commissioner Dagmar Wood. “I am hoping that this new ordinance will make sure that this doesn’t happen again.”

Wood said the matter came up because of the situation at Zona Rosa, a large shopping district at Interstate 29 and Barry Road that opened in 2004. Late last year, for the first time in its history, Zona Rosa failed to make a bond payment. More recently, Zona Rosa has defaulted on its mortgage and longtime general manager Rosemary Salerno was replaced.

During its initial development and 2007 expansion, road work in and around Zona Rosa was funded through a Transportation Development District, TDD. The financing structure is similar to Tax Increment Financing, providing bonds to build roads and parking garages. In the early 2000s, capacity was increased on roadways in and around the Interstate 29 and Barry Road interchange to accommodate the shopping district.

While the original TDD funding was created through an agreement with the City of Kansas City, in 2007 Platte County joined in as well on a two-to-one vote of the then-commission.

“If this had been in place 10 years ago, the public would have been educated, hopefully, and they may have decided not to do this and it wouldn’t have been the call of just two people in the county to make,” Wood said.

Schieber said the deal was made due to a loophole in state statutes, a loophole that this amendment will close.

“The county does not have a legal obligation to appropriate the payment or a legal obligation to make the payment,” Schieber said. “What we do have is this backwards obligation. There’s nothing legally that can happen, but it destroys the bond rating of the county. The consequences are way too high for a commission to have the authority to do this kind of stuff, I believe, in direct conflict to our constitution.”

Wood and Schieber both noted the public should be aware that a rescission of this amendment by any future commissions should be a red flag.

One member of the audience immediately suggested a rescission would be possible. David Park, who has filed to run against Schieber in the November general election, spoke to the commissioners before the vote.

“You just said this could be rescinded by a future commission,” he said. “So this is more of a statement of what the current commission’s policy would be on these types of financing instruments.”

He suggested that taking it to a vote of the people could effectively kill any such development proposal. However, he said he did agree with Schieber’s statement of the “mess we’re in with Zona Rosa.” He said he, too, would need to carefully consider any future proposals before considering county backing.

Wood said she urged residents to continue to shop at Zona Rosa and support the center, as its success will help everyone. Platte County Economic Development Council executive director Alicia Stephens concurred.

“The best way to get these bonds paid is for us to continue to spend our sales tax dollars at Zona Rosa,” Stephens said. “You may recall in the past that our sales tax dollars were going outside of the community because there was nowhere to go.”

She noted that it was to everyone’s benefit for Zona Rosa to be successful.