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'It may be inevitable': Hazelwood faces possible bankruptcy

The financial struggles mean the Civic Center can't re-open, along with the elimination of popular programs.

HAZELWOOD, Mo. — The financial future of Hazelwood is hanging on by a thread.

The north St. Louis County community may be facing bankruptcy.

The financial woes have been building for years and the mayor says the city may not be able to sustain things much longer.

On Wednesday, Mayor Matthew Robinson posted a letter to residents.

It says without voter or judicial relief, a Chapter 9 bankruptcy of Missouri's 26th largest city and the 7th largest city in St. Louis County may be inevitable.

This letter shed some light on what 25,000 Hazelwood residents like Jennifer Guyton are facing.

"The residents have been living with this for a while, I think they are just now really starting to feel it," she said. "This is a very serious issue."

Mayor Matthew Robinson is sending the following letter to residents.

Posted by City of Hazelwood on Wednesday, June 22, 2022

The financial struggles mean the Civic Center can't re-open, along with the elimination of popular programs such as the limb and leaf collection and the 4th of July firework show. 

Mayor Robinson blamed the costly budget funding the Robertson Fire Protection District.

It's one of three fire departments in the area.

Years ago, Hazelwood annexed land throughout north St. Louis County to build a bigger tax base. In that process, it attained Robertson fire services.

State Representative Gretchen Bangert represents a big section of Hazelwood and after redistricting, it will be all of Hazelwood. 

"The Hazelwood city collects the money for the fire departments and city of Hazelwood, it’s all collected at a certain rate and paid out to those districts," she said. "The Robertson Fire District is higher than the other ones so there is additional money that the city has to pay for those services."

Since the initial agreement, tax hikes have happened since.

As a taxpayer, Jennifer Guyton wanted to learn more after seeing several tax rates go up.

She's even the President of Citizens to Save Hazelwood & Fire Services.

"In 2014, it got a .50 cent tax increase pass and that ballooned budget a bit and made it more difficult for the city to pay and they couldn't pay, so in 2018 they canceled the contract and Robertson turned around and sued for breach of contact," she said. 

Currently, the city of Hazelwood and Robertson Fire are in a lawsuit. In turn, Hazelwood still has to pay Robertson more than $4.5 million a year, until there is a resolution.

Robinson said if the city can obtain a more reasonable cost closer to what the city pays for Hazelwood Fire Department, these programs can be brought back. 

The attorney representing Robertson Fire provided the following statement:

The district was annexed by Hazelwood in 1995 with the understanding that it (Hazelwood) would pay to the district the tax rate that is applicable. Hazelwood came to the same understanding with Florissant Valley Fire Protection District. In 2018, Hazelwood decided to withhold payment from Robertson citing financing concerns. Robertson made demand for payment on Hazelwood. When Hazelwood did not pay the applicable fees, Robertson was forced to file a lawsuit to fund the first responders.

Since that time, the dispute is unresolved. The parties have spent millions of dollars on Attorneys in this dispute. Hazelwood has continuously indicated that they were in financial distress.

Robertson offered to merge with Hazelwood Fire Department to save the city money but that was rejected by Hazelwood.

Florissant Valley Fire protection District offered to take over the Hazelwood Fire Department, but that was rejected by Hazelwood.

Robertson acknowledges that Hazelwood may be in long term financial distress, however, threats such as those found in the recent letter from the mayor are not the answer. Robertson stands ready, willing, and able to work with Hazelwood to enact long term solutions.

Hazelwood has been threatening bankruptcy for years as a strategic bargaining point in this litigation. The positioning continues.

As for positives, Robinson said in the letter how helpful the federal stimulus money has been to maintaining financial footing and the city's economic development efforts.

"COVID money actually saved the city of Hazelwood," Bangert said. "Bad things happened with COVID but it saved our city for a couple of more years."

Right now, the city is hanging on.

However, it's hard to tell for how long.

"Bankruptcy is inevitable, that's what is going to happen. It could take a couple of years," Bangert said.

If Hazelwood files bankruptcy, fire, police, and street maintenance will continue but in a much-reduced capacity.

Banger said there is a committee that has formed in Jefferson City to study this issue about annexations and to see what solutions can come about.

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