Faced with having to pay the City of Monett $600,000 while operating in a recession, the Barry County E-911 Board announced last week that it could declare bankruptcy if the board's current financial position does not change.
Board President Jon Horner presided over a public meeting on May 24 that was attended by area fire chiefs, local members of the press and representatives from the City of Monett. The purpose of the meeting was to publically lay out the board's financial situation in light of the recent court ruling that favored Monett in the ongoing tax increment financing (TIF) lawsuit.
"Barry County E-911 did not create this situation," said Horner. "We've been minding our own business. We got the tax passed six years ago, we set up the board, started building the center and equipping it and got it operational.
"Then in the last year, we've been hit with a financial perfect storm," Horner continued.
Horner described the E-911 Board's involvement in the lawsuit, which according to Horner, began with an exchange of letters over Monett's contention that Barry County E-911 and the Lawrence County Judicial Center should have been paying a portion of their sales tax revenue to Monett's TIF district.
"Then in the middle of this, the Barry County Commission (and the Lawrence County Commission) stopping paying into the TIF," said Horner. "When they stopped paying, the lawsuit was filed. And let me be clear, we, Barry County 911, were sued by Monett."
To date, the Barry County E-911 Board has spent over $165,000 in legal fees on the lawsuit and been ordered to escrow $262,173.46 for possible payment to Monett. In addition, Horner said sales tax revenues are down approximately $200,000 over the past two years due to the recession.
"The recent decision in the Monett lawsuit has placed Barry County E-911 in serious legal and financial position," said Horner.
As a result, Horner said the E-911 Board has filed a motion asking the judge to reconsider the recent court ruling. The judge has until Aug. 10 to make his decision.
If the judgment stands, Horner said Barry County E-911 would have to pay Monett approximately $600,000 as well as ongoing monthly tax payments toward the TIF of $2,000 to $4,000.
In addition, the board could also be looking at paying a third of the legal costs incurred by Monett during the lawsuit, which as of mid-May stands at $355,255.03.
Since the lawsuit was filed in July of 2009, Barry County, Lawrence County, Barry County E-911 and the City of Monett have spent a total of $806,420.73 in legal fees.
"Barry County E911 is very important to the safety of all citizens of Barry County and those visiting our county," said Horner. "The Barry County E911 Board is determined to have E911 remain in place, but the reality is that we are facing severe challenges, including potential bankruptcy, because of the lawsuit brought on by the City of Monett."
In recent months, the E911 Board has instituted spending cuts in response to its financial problems. No layoffs were necessary but the board has opted not to fill four positions when employees left. One of those positions is the mapping position, which was held by Mike Phillips, who now serves as Barry County E911 director. Phillips now handles mapping as part of his director's position.
"We will continue to look for ways to cut costs, while keeping 24 hour dispatching and emergency services available for every community in Barry County," said Horner. "But we're at a point where we cannot cut any further without jeopardizing our ability to respond to emergencies."
The board is also looking at the possibility of filing Chapter 9 bankruptcy if it loses the lawsuit.
Horner said he did not know of a government entity in Missouri that had ever filed for Chapter 9 protection, so the specifics of what a bankruptcy would mean to the local E911 system remain unclear.
"We would continue to pay our bondholders here," said Horner. "I don't know what would happen in regards to our judgment owed to Monett.
"For us, bankruptcy would just be a matter of surviving," Horner continued. "Our board would remain intact and it would allow us time to continue to operate. Bankruptcy is not a threat but a reality. It could be the only way to save us."
Another option would be to go back to the voters and ask for an additional sales tax to support county E911 operations.
"We're going to need additional enhancement to our revenue moving forward," said Horner. "A quarter cent was not the right amount for us to have from the get go. We probably needed three-eighths of a cent to operate."
Cassville Fire Chief Millard Andrews reminded the E911 Board of the support the center has received from the Barry County Fire Chiefs Association.
"We put it all on the line for this," said Andrews. "It's a shame the counties have spent almost $1 million on a lawsuit. That's $1 million of taxpayers money that just went down the drain."
Harold Schelin, treasurer of the Barry County E911 Board, shared Andrews' frustration.
"The lawsuit has gotten out of hand," said Schelin. "Once we got started on it, we couldn't get lose from it. We have spent an abnormal amount of money on this lawsuit."
Exeter Fire Chief Jim Matthew said his department would have a very difficult time functioning without a county-wide E911.
"It would be disastrous to be without 911," said Matthew. "I'm satisfied the other chiefs feel the same. Don't get me wrong, 911 has its faults but it is 100 percent better than what we had, so we need to do whatever we can to keep it."
"Our top priority is to provide high quality dispatching of emergency needs 24 hours a day, seven days a week for all Barry County citizens, our businesses and the children in our schools," Horner said.
Other members of the E911 Board who were present at the meeting included Richard Asbill, Leonard Witt and Danny Dalton. Mick Epperly and Mike Redshaw were unable to attend the meeting, because they were helping with search and rescue efforts in Joplin. Phillips was also present at the meeting.