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Thursday, May 26, 2016

Sides file new motions in Monett TIF lawsuit

Thursday, May 19, 2011

Almost a month after Circuit Judge Neal Quitno handed down his ruling for summary judgment in the litigation over Monett's tax increment financing (TIF) program, both sides have filed motions for additional action by the court.

The City of Monett, which received a favorable ruling on all the arguments in the case, has asked the judge to schedule a hearing to release the funds held in escrow by Lawrence and Barry counties and the Barry County Emergency Services Board.

The judge ordered that money that had been paid back to Monett's TIFs prior to the litigation go into an escrow fund. Contested revenues that would have come from Barry County's sales tax to support 911 and Lawrence County's sale tax for the Justice Center were also placed into the escrow fund.

Action would provide both the city and the counties with funds that neither have been able to spend while the litigation was underway.

In one of the motions, attorneys for the city indicated the Barry County Emergency Services Board had not set aside the full contested amount in the escrow fund. The city asked the judge to address the "deficiencies" in the amount owed under the ruling.

The judge had determined the sales tax for 911 was subject to capture by Monett's TIFs, even though the taxes were passed after the TIF was created, because the Missouri General Assembly had not specified 911 taxes were exempt, like the other taxes legislators had named.

The city also asked the judge to rule on its request for attorneys' fees to be paid by the parties that lost the case. Cases dating back to 1983 were cited in support of the request. Current legal fees accumulated by the city add up to around $355,000.

According to the city's attorneys, the court has the authority to amend its ruling for 30 days after handing down a judgment, which was filed on April 20. Requests for changes fall within the allotted time frame.

City attorneys are also asking the court to consider sanctions against the county for introducing arguments and evidence in motions two years after the suits were filed. The city prevailed in the argument that the evidence should have been introduced in a more timely manner.

The counties have asked the judge to reconsider his summary judgment ruling for several reasons:

* Both sides asked for summary judgment against the other's counterclaims. The judge ruled on both the city's claims and counterclaims, which the counties considered improper.

* Under the Missouri TIF Act, "no redevelopment project shall be adopted later than 10 years from the ordinance adopting the original TIF." Under that premise, the counties asserted that two amendments to Monett's TIF district #1, including the major widening project on Highway 60 that was authorized in 2007, would not have been barred from the five-year statute of limitations. The counties requested to have the amendments considered separately.

* The counties claimed that the city had not met the burden of persuasion required by law in its arguments against the counties' counterclaims. According to the counties' attorneys, "the city had the burden of persuading the fact-finder that the ordinances were in conformity with the comprehensive plan."

* The court's assessment that the counties participated in creation of Monett's TIFs and paid sales taxes back into the TIF as if the TIFs were valid did not apply to the Barry County Emergency Services Board, which never paid any sales tax back to Monett's TIF. Thus the claim by the Emergency Services Board could not be properly discounted on the same grounds.

* The counties asserted the court order "grossly misstates the procedural history of the case." The two amendments to the original TIF district #1 "are and always have been an issue," the counties' legal counsel stated, not an afterthought or an issue not stated in its original filings.

* The counties also asserted that the critical facts in the case are at issue, and summary judgment is only applicable when there is no dispute about the facts. For example, the counties "always have and still vehemently deny" the city's assertions that the TIF plan contained financing commitments.

The judge will rule on the motions next, after which the counties still have the option of appealing the entire ruling to the Missouri Court of Appeals.

Lead attorneys for Monett on the case are Christine Busyhead, now with the Kansas City law firm of Mitchell, Kristel and Lieber, and Mary Jo Shaney, from the Kansas City law firm of White Goss Bower March Schulte and Weisenfels. Lead attorneys for the counties are Ivan Schraeder and Thomas Scott Stewart, with the Lowenbaum Partnership in St. Louis. Cassville attorney David Cole joined the case for the Barry County Emergency Service Board.

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