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Friday, Apr. 29, 2016

LawCo drops TIF appeal

Wednesday, January 11, 2012

Litigation over Monett's tax increment financing (TIF) program became less complicated at the end of December with Lawrence County withdrawing from the appeal of Judge Neil Quitno's ruling in favor of Monett.

Quitno finalized his April 20, 2011, judgment on July 24, 2011. Quitno ruled Monett's TIF had been properly formed and under state law should collect tax revenues from subsequently passed sales taxes.

The defendants, Lawrence and Barry counties and the Barry County 911, announced plans in November 2011 to appeal Quitno's ruling to the Missouri Southern District Court of Appeals. An extension until January 24 was granted to file the appeal.

During the final week in December 2011, Lawrence County withdrew from the appeal process.

"At this point, given the judge's decision and the cost involved, we were going to get to a point of diminishing return," said Lawrence County Presiding Commissioner Sam Goodman. "Probably the cost to us would be more than what we'd receive than by following through with the appeal."

The City of Monett subsequently sent a demand letter for payment of the funds withheld from the city on all the Lawrence County sales and real estate taxes. Quitno had ordered the funds to go into an escrow account after the counties stopped payments. A copy of the court order accompanied the letter.

On Jan. 9, Monett received two checks. The $92,121.43 represented half of the sales taxes in the TIF districts above the base levels, known as economic activity taxes (EATs). A second check for $84,209.88 represented gains in real estate tax collections since the TIF districts were established, known as payments in lieu of taxes (PILOTs).

Monett City Administrator Dennis Pyle said the PILOTs payment does not include any of the real estate taxes from 2011, which may not have been deposited yet.

According to Mary Jo Shaney, Monett's chief legal counsel with the Kansas City law firm of White Goss Bowers March Schulte and Weisenfels, the defendants asked for an extension for time to go through the hundreds of pages of exhibits filed in the original case to select those relevant for the appeal, thus reducing duplication.

"Once the complete record on appeal is filed, the Court of Appeals will set a briefing deadline for opening and replies," Shaney explained. "Once the briefs are filed, the court will set the case for oral argument and then will take the case under advisement, issuing a written opinion sometime thereafter."

It is possible either party may seek another extension to file more briefs, Shaney said. Oral arguments could be set for sometime this summer, depending on the court's docket. The Appeals Court has no deadline for issuing a written opinion but often does so within one or two months of hearing final arguments, she added.

An appeal to the Missouri Supreme Court could potentially leave final resolution in the case open until 2013.

Annual payment on Monett's TIF bonds is due in Oct. 1.

"The Monett TIF has sufficient funds and cash flow to meet its bond obligations until at least Oct. 1, 2013, with continued litigation," Pyle said.

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