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Josh Hawley

Missouri Attorney General

Supreme Court Building
207 W. High St.
P.O. Box 899
Jefferson City, MO 65102

RE: EDRST complaint

September 18, 2018

Mr. Hawley:

On August 8th of 2006 the voters of University City, Missouri elected to impose a 1/4
cent Economic Development Retail Sales Tax as authorized under RSMo 67.1305 with
an effective date of January 1st of 2007 (see attached Resolution 2006-1).

It is our opinion that the municipality of University City is in violation of RSMo 67.1305.

The City Manager (Gregory Rose) did not present the EDRST board's unadulterated
project funding recommendations for FY19 (as approved by the EDRST board) to the
council as required by statute:

"The board, subject to approval of the governing body of the city or county, shall
consider economic development plans, economic development projects, or designations
of an economic development area, and shall hold public hearings and provide notice of
any such hearings. The board shall vote on all proposed economic development plans,
economic development projects, or designations of an economic development area, and
amendments thereto, within thirty days following completion of the hearing on any such
plan, project, or designation, and shall make recommendations to the governing
body within ninety days of the hearing concerning the adoption of or amendment to
economic development plans, economic development projects, or designations of an
economic development area. The governing body of the city or county shall have the
final determination on use and expenditure of any funds received from the tax imposed
under this section."

Instead he made a change in the recommendations to council by asking for $133K (see
attached page 13 of the CMs 6/18/18 presentation to council) to fund the new position
of Assistant to City Manager: Economic Development (see attached page 18 of the CMs
6/18/18 presentation to council). The EDRST board did not vote for this allotment (see
the third page last paragraph of the EDRST board meeting minutes attached).

In addition, RSMo 67.1305 does not allow for EDRST monies to fund staff positions
such as the Assistant to City Manager: Economic Development. The city claims that the
25% admin exception applies:
"Not more than twenty-five percent of the revenue generated shall be used annually for
administrative purposes, including staff and facility costs."

'Administrative' is used but not defined in the statute, but by context must be assumed
to mean "in support of the EDRST fund and board" as that is the sole purpose of this
statute. Otherwise this money could be used to fund anything that is administrative
such as an IT project providing new copiers in the building or a benefit program for
extended maternity leave, neither of which have anything to do with the EDRST fund or

Any staff work in support of the EDRST fund and board can be covered by the EDRST
fund. This would include:

Setting up the room for an EDRST meeting

Rent for the Community Center for an EDRST meeting
Recording EDRST meetings
Transcribing minutes of EDRST meetings
Creating agendas for EDRST meetings
Printing agendas for EDRST meetings
Attending EDRST meetings
Creating project lists and details of fund requests
Coordinating approved EDRST projects such as the facade improvement program
Providing research requested by the EDRST board

But the Assistant to City Manager: Economic Development has much more on his/her
plate than supporting the EDRST fund and board (see attached 6-18-
18presentationPg4). The job is to foster economic development in U City. Fostering
ED is a line function and not an administrative function. I have copied from google:

"Administrative work is a broad category. Administrative workers are those who provide
support to a company. This support might include general office management,
answering phones, speaking with clients, assisting an employer, clerical work (including
maintaining records and entering data), or a variety of other tasks."

The city argues that non-administrative work (fostering ED) can be paid for out of the
EDRST fund even though the statute specifically and exhaustively allows for only
"administrative purposes" to be covered. We obviously disagree.

We also have concerns about the process being proposed to determine the use of
these funds. 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. The City Council has the final determination on
the use of these funds. The City Manager is instead proposing that the City Council
determine the use of the funds, and establish procedures for soliciting and reviewing
grant request. His recent presentation to the City Council made no mention of including
either the EDRST Board or the business community in this process. This is not the
intent nor the process as outlined by state and municipal statute.

Finally, it seems that the City Manager doesn't understand that these funds can be used
to benefit our business district nodes throughout the entire city. The use is not limited to
only the "downtown" or historic district as he seemed to explain to the City Council at a
recent work session. The legislation is more inclusive than that, as outlined in section B
and C under Section 120.520.of the U. City municipal code under Use of Revenue.

For these reasons we ask the Attorney General to investigate University City’s
management of our EDRST funds. We appreciate your prompt attention to this matter.

Additional documentation can be provided.