The Joplin Globe, Joplin, MO

June 12, 2013

Neosho officials question revenues from 2006 CID

By Roger McKinney

NEOSHO, Mo. — Neosho city officials for the past year or so have been occupied with the Neosho Transportation Development District, or TDD.

They recently have turned their attention to another entity with an acronym, the Big Spring Plaza Community Improvement District, or CID.

The City Council in 2006 formed the CID, which is a separate political subdivision. The five property owners in the district approved a 1-cent sales tax and became the board of directors. Tax revenues were used to build a road to a strip mall on the south side of the Wal-Mart parking lot, said Mayor Richard Davidson. Only one member who was on the City Council in 2006 is still on the council.

The CID board made the strip mall developer, Barry Clark, with Clark Properties of Missouri, its chairman.

Davidson and City Manager Troy Royer raised issues related to the CID last week.

The CID was formed inside an already existing tax increment financing, or TIF, district. The city had an agreement with the TIF district that the city would be reimbursed half of any new tax revenue in the district. Royer and Davidson said last week that the city never received any payment from the CID tax.

The city last week filed an open-records request with the CID. Royer said at the time that he estimated the city may be owed as much as $100,000.

It turns out it’s probably more.

CID attorney Carl Yates, of Springfield, said he had prepared a response to the city’s request, after gathering what records the CID had available and reassembling what he could, resulting in a delay in the response. He said the amount owed is $100,000-plus, but less than $200,000. He said the amount also is dependent upon all of the CID being inside the TIF.

The city had not received the response with the specific amount on Wednesday.

“We just have to get the money back from Mr. Clark so we can pay it,” Yates said.

Yates said Clark, the former chairman, created an account into which the CID funds were deposited, with Clark the only one having access to the account.

“He filed a suit against the CID, and the CID has filed a counterclaim against him asking him to reimburse the district for all the funds that he took,” Yates said.

Yates was asked if it was a good idea to make the business developer the chairman of the CID.

“That was something the board did,” Yates said. “Sometimes people with the best of intentions end up with things they wish they hadn’t done.”

Norman Rouse represents Clark in the legal dispute. He said the account was set up to reimburse Clark for the improvements he was making. Payments were made into the account by the CID board for several months, he said.

“A board member or board members stopped that payment, resulting in the lawsuit being filed,” Rouse said.

Davidson said the situation validates the city’s position that it is owed money, and it demonstrates a potential problem with these political subdivisions, including the TDD.

“There’s no accountability there,” he said. “It reinforces that when these entities sell themselves as a win-win proposition, if they’re not properly managed or have proper oversight, they can be more of a burden than a benefit.”

It turns out that the TDD also is in the TIF, but Davidson said the council and the TDD had an agreement to waive reimbursement of tax revenues from the TDD.

The city continues to keep its options open regarding a decision on whether to appeal a court ruling against the city that allowed the TDD to continue. The city was granted an extension to file an appeal until July 17.

The TDD is funded by a half-cent sales tax collected by businesses within the district, to pay the TDD’s $4.5 million share of the cost of transportation projects along a retail area of U.S. Highway 60. The Missouri Department of Transportation has agreed to pay the remaining $2.4 million share of the projects.

One TDD project is under way, but remaining projects have been placed on hold by the state pending resolution of the legal issues. City officials have argued that no other projects would start this year anyway, so the city isn’t delaying the projects.

Legal fees

THE CITY AND THE TDD have spent more than $250,000 combined on their legal disputes.