TIF appeal moving closer to hearing

Wednesday, July 25, 2012

The City of Monett had until July 20 to file its response to the appeal of the ruling that favored the city in a lawsuit involving the Barry County E-911 Emergency Services Board and the Barry County Commission.

The county has filed a 116-page brief with the Southern District Court of Appeals. The defendants are appealing Judge Neal Quitno's July 27, 2011, ruling in support of Monett's tax increment financing (TIF) program. The appeal argues that many of the objections raised by the county to the way Monett's TIF was organized and structured were valid, contrary to Quitno's ruling.

Litigation over Monett's TIF program began in 2009. With the withdrawal of Lawrence County from the case, the Barry County defendants have changed legal teams. The appeal is being handled by Cordelia Herrin and David Cole, of the Cassville law firm Ellis, Cupps and Cole. The City of Monett is still represented by Mary Jo Shaney, of the Kansas City law firm of White Goss Bowers March Schulte and Weisenfels.

The appeal argues against Quitno's decision on five key points.

The county argues that Monett's second TIF district, which includes the Lowe's project, did not conform to Missouri's 2005 TIF Act. According to the county, the state law required the city's project to adhere to the city's comprehensive plan.

The defendants identified Monett's comprehensive plan from 1971 as the guidepost that should have directed the project. Since land in the second TIF district was not annexed into the city until 2005, the land could not be considered as part of the city's comprehensive plan, the defendants argue.

Similarly, the county claimed the city's original TIF district, established in December 1996, did not adhere to Missouri's 1996 TIF Act because some of the land included was not in the city limits at the time of the 1971 comprehensive plan. Specifically, the defendants cited the Walmart property, which was annexed into the city shortly before the TIF project began. The same argument was made over the Lowe's property.

A ruling by the Eastern District Court of Appeals involving a TIF in St. Charles was cited by the defendants over whether Monett's TIF plan "conformed" to the 1971 comprehensive plan. The court sided against St. Charles in its argument of how later zoning matched with an earlier plan.

The defendants further argues that the courts supported individual appeals based on the evidence in each case. In the ruling over a TIF involving the City of St. Peters, the court ruled a challenge was allowed "if the complained of action is unreasonable or the reasonableness is fairly debatable."

The defendants argued the claim that the 2005 TIF conforms to the 1971 comprehensive plan "is not fairly debatable." They asserted the city's record as filed with the court had not met the burden of proof to warrant the summary judgment granted by Quitno.

According to the defendants, the city presented no evidence of a public hearing or an ordinance creating the original TIF district.

The life of a TIF district, under state statute, is 23 years. The defendants argue that the TIF Act limits the approval of projects to a 10-year period. The addition of the widening of Highway 60 in 2008 represented more than the law allowed. Redevelopment costs sought by Monett for the highway project total $4,265,000.

Turning to the 911 issue, the defendants argued the sales tax approved to fund the emergency services system was exempt from collection under the TIF. State law required municipalities to include "anticipated sources of revenue." The city never included the 911 tax, passed after the TIF was put into place, as a source of revenue.

The county argued that the definition of "economic activity taxes" could only apply to taxes that existed one year prior to the creation of a TIF district. The 911 sales tax, passed after both Monett TIF districts had been created, represented revenue from an increased levy and not from economic activity stimulated by the TIF's redevelopment plan.

The five-year statute of limitations for appealing a TIF formation still sanctioned the Barry County 911 Board to seek legal relief in 2009. The defendants claimed that the 2005 second TIF district and the 2007 amendment to the first TIF district, adding the Highway 60 project, should be open to appeal by the 911 board.

The city asked a judgment under the legal argument of laches, claiming the defendants waited too long to make their claim. A delayed decision represented an undue hardship on the city. The doctrine of estoppel similarly argues the TIF program was well established and long recognized before any complaint was raised.

According to the defendants, laches and estoppel are legal arguments that do not apply to government entities, which are the only parties involved in the Monett litigation. The defendants argue that Quitno erred in granting relief to the city under these doctrines.

Following the filing of the city's response, the county will have 10 days to file additional arguments in favor of its position.

City Administrator Dennis Pyle told The Times it is very likely the Appeals Court will agree to hear oral arguments in the case, contrary to its normal procedures. Pyle expected the hearing will be scheduled in October or November.

Respond to this story

Posting a comment requires free registration: