DALLAS -- As St. Louis officials consider cuts to balance their fiscal 1992 budget, backers of a proposed $250 million stadium expect the city's first appropriation for debt servie to be spared the axe.
In fact, the St. Louis Regional Convention and Sports Complex Authority, which is to build the stadium, plans to price the long-awaited issue in July if credit enhancement and other matters are resolved. The size of the issue is expected to be around $250 million.
"I think there's support among the aldermen to pay for this project and to still meet their budget," said Robert Baer, the authority's chairman. "I don't see any reason that the city won't approve it."
This month, aldermen are expected to approve a $2.5 million appropriation that will cover the first semiannual bond payment in fiscal 1992, which begins July 1.
However, Virvus Jones, the St. Louis comptroller, continues to question whether the city can afford its estimated $5 million annual contribution to debt service.
"We cannot really afford this from the general fund," said Z. Dwight Billingsley, the city's deputy comptroller. "We are talking abouts cuts in health care and cuts in services."
St. Louis is planning a $291.7 million general fund budget next year. That is down nearly $12 million from the current budget largely because a three-eights-cent sales tax expired and tax collections have dropped.
Even before the shortfall, the comptroller advocated that the city dedicate revenues for debt service and not dip into the general fund. St. Louis County voters have approved a special hotel tax that will fund its share of the project.
Under and intergovernmental agreement, the state of Missouri will pay half the cost of the project -- about $10 million a year -- while St. Louis County and the city will each pay one-fourt, or $5 million annually.
This spring, the state included its initial $5 million debt service payment in its fiscal 1992 budget after a legislative subcommittee blocked the appropriation.
But Mr. Baer and others say they do not expect a repeat of this challenge to stadium funding as most political leaders in St. Louis support the project.
But sources said Mr. Jones has recently tried to position himself for a greater role in the stadium financing by proposing that the city establish a second authority to handle its share of the bonds.
Mr. Billingsley said the city could establish a nonprofit corporation or use existing bonding authorities to finance its share of the project, but he noted, "It's just an idea. It's not something that we have advocated."
Mr. Baer dismissed talk of second financing authority as rumor and defended the need for only one agency to issue the bonds.
"I heard that rumor about two weeks ago, and I just saw it as a rumor," he said. "I can only say this much: I don't see how it could be possible."
Underwriters in St. Louis privately say Mr. Jones wants a say in how the bond financing is done and wants to include other firms after a syndicate is chosen.
Last fall, the authority named a 15-firm financing team that includes Missouri-based and women and minority-owned brokerages.
The four co-managers are A.G. Edwards & Sons Inc. and Edward D. Jones & Co., both of St. Louis; Pryor, McClendon, Counts & Co. of Atlanta; and Smith Barney, Harris Upham & Co. of New York.
The comptroller has had strained relations with local firms after he called them unqualified for anything other than "cookie-cutter" financings last year.
He also passed over St. Louis-based firms in city financings and instead used Prudential Securities Inc. An investment banker at that firm, Craig Walker, has been a close adviser to Mr. Jones.
But Mr. Billingsley denied that Mr. Jones seeks a role in controlling the financing, saying his boss only wants to protect the interests of St. Louis.
"His interest is only with respect to protecting the credit of the city of St. Louis and the way this project is proposed now won't do that," he said.
Project officials are considering issuing three series of bonds that would be linked the credit of each the state, county, and city. As a result, credit enhancement would only be used on the series with the weakest ratings.
Credit enhancement "is a critical issue," said bill Darmstaedter of the Boatmen's National Bank of St. Louis, the project's financial adviser. "The ratings range from AAA [for Missouri] to BBB," for St. Louis.
He said it not yet known if the authority will purchase bond insurance or arrange letter-of-credit backing for all or part of the bonds.
The financing also has been delayed by a lawsuit filed by the Rev. Larry Rice, a local television preacher and advocate for the homeless, and others challenging the project.
Mr. Darmstaedter said lower court and panel of appeals judges have sided with the authority and that Mr. Rice should exhaust his court filing deadlines by early July.
The lawsuit should not stop the planned sale, he said, adding, "I think we'll be done with this deal by the end of summer."