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Friday, May 6, 2016

Judge's latest TIF ruling favors Monett

Friday, August 5, 2011

Circuit Judge Neil Quitno has finalized his April 20 ruling in the lawsuit over Monett's tax increment financing (TIF). Quitno amended his ruling without changing his earlier determination in favor of Monett.

In his April 20 ruling, Quitno determined Monett's TIF program had been properly formed under state law. The judge discarded the contention made by Barry and Lawrence counties and the Barry County Emergency Services Board that no payments of sales tax revenue were due to Monett's two TIFs.

Money that would have been paid in Monett's TIFs from county-wide sales taxes have been held in escrow, by order of the judge, once the counties and the Emergency Services Board stopped payments. Monett had asked Quitno to order the release of the money once his ruling was made final.

In his final order, Quitno directed the respondents to pay "any deficiencies in the funds held in the escrow accounts no later than five business days after entry of this order." The total amount due is estimated at around $1.5 million.

A directive was included in the latest order permanently compelling the respondents to make payments to Monett for the duration of the two TIFs.

In the hearing on July 1, Ivan Schraeder, lead attorney for the counties, said there was a debate over how much the emergency services board owed. The board has placed $262,000 in escrow.

Schraeder cited a 2002 law that changed the formula. Mary Jo Shaney, attorney for Monett, said the revision may affect the amount owed from Monett's second TIF, but would not change the amount owed to the first TIF, which predated the change of law.

According to City Administrator Dennis Pyle, the amount owed ranges from $277,413 to $554,826, depending on the formula used for calculations.

Quitno offered no specific clarification in his ruling.

"We gave the judge the option to be more specific [on the amount due from 911]," said Shaney. "We tried to explain to the court the amount wasn't straightforward. The $262,000 placed in escrow by 911 will certainly be included. The city has an argument that there is a deficiency if the city wants to take that position."

A bill of costs for court fees and copies was approved totaling $5,466.64.

"The judgment shall reflect that the city's request for attorney fees is denied," Quitno wrote.

The judge's determination left the city to pay approximately $360,000 in attorneys' fees. Shaney said that decision was expected.

In his April 20 ruling, Quitno had cited the possibility of sanctions against the counties for failing to articulate why Monett's TIFs were invalid in a more timely manner. Sanctions could have taken the form of financial penalties that would have recouped some of the legal expense.

Quitno made no reference to sanctions in his amendments to the ruling. Shaney said this would have been the time for the judge to raise the issue. She did not expect the subject to come up again.

The counties and the emergency services board have filed an appeal with the Southern Division of the Missouri Court of Appeals for a review of the ruling and an injunction halting Quitno's order for payment.

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