Court asked to determine MFPD tax rate

Koster’s office seeks ‘finality’ on fire district’s tax-rate issue.


Missouri Attorney General Chris Koster has filed a lawsuit against the Mehlville Fire Protection District asking the St. Louis County Circuit Court to determine the fire district’s tax rate.

As first reported by the Call last November, Missouri Auditor Susan Montee’s office deemed the fire district’s fiscal 2010 tax rate to be higher than permitted under state law and referred the issue to Koster’s office for further action.

In mid-November, MFPD officials met with representatives of Koster’s office and said they were informed the attorney general had no plans to pursue any legal action against the district. But Nanci Gonder, press secretary for the attorney general, said Monday, “We believe the issues in the case are significant and we wanted to allow the court to weigh in. We also are seeking finality on the issue.”

At issue is the board’s decision to set the fire district’s tax rate at 59.3 cents per $100 of assessed valuation, an amount it contends is the legal maximum it can levy as a result of the passage last April of two propositions reducing Mehlville’s tax-rate ceiling by 40 cents.

The fiscal 2010 tax rate is 3 cents more than the previous year’s tax rate of 56.3 cents, and board members voted to roll up the tax rate to collect the same amount of revenue as the previous year under the provisions of the Hancock Amendment.

However, Montee contends that because the board voted in August 2008 to levy a tax rate less than the district’s tax-rate ceiling of $1.052, Mehlville’s ceiling was reduced to 56.3 cents under the provisions of Senate Bill 711. Under SB 711, a tax rate set in a nonreassessment year becomes the tax-rate ceiling in a reassessment year.

As a result, the tax-rate-ceiling reduction of 40 cents approved by voters as Proposition 1 and Proposition 2 in April sets the district’s new tax-rate ceiling at 16.3 cents.

Proposition 1 asked whether the district’s general-fund tax-rate ceiling should be permanently reduced by 36 cents per $100 of assessed valuation while Proposition 2 asked whether the district’s pension-fund tax-rate ceiling should be permanently reduced by 4 cents per $100.

Besides asking the court “to determine the proper permissible levy rate …,” Koster’s suit seeks “an order that Mehlville cannot levy and collect an ad valorem tax for general purposes and its pension fund for the 2009 tax year that exceeds the proper levy as determined by the court.”

Gonder said the attorney general agrees with the state auditor’s tax-rate calculations. In a report on tax rates issued Jan. 26, Montee stated Mehlville’s fiscal 2010 tax rate will generate $9,882,027 more than permitted.

While the board has yet to adopt a 2010 budget, a revised 2009 budget reported a beginning balance of $24,897,405 on Jan. 1, 2009, and projected an ending balance of $22,527,303 on Dec. 31, 2009.

The ballot language for both Proposition 1 and Proposition 2 included the phrase: “This proposition is based upon the 2008 assessed valuation for the district. The foregoing shall not be subject to any tax-rate-reduction rollback.” Citing Missouri statute 321.244, Koster’s lawsuit contends, “Neither Proposition 1 nor Proposition 2 followed the required ballot form by adding the last two sentences to the form of ballot.”

Koster’s suit states, “The auditor’s calculation differed from Mehlville because though both the auditor and Mehlville applied the lower available levies, the auditor, as required by law, performed the necessary rollback calculation before applying the reduced levy rate approved by Mehlville voters in adopting Propositions 1 and 2 while Mehlville, relying on the language of the voter-approved Propo-sitions 1 and 2, did not.

“… The board of Mehlville and its citizens did not have a legal authority to avoid the constitutional and statutory requirements in years where a reassessment has been done.”

However, Hilmer cited a St. Louis County Circuit Court judge’s ruling last year upholding the ballot language for Proposition 1 and Proposition 2, which were put before district voters after withstanding a legal challenge from Concord resident Dennis Skelton. Skelton had filed a lawsuit seeking to remove the measures from the April 7 ballot. But Circuit Court Judge Sandra Hemphill ruled the fire district had the legal authority to place the measures on the ballot, citing provisions enacted as part of SB 711.

The judge also denied a motion for a new trial by Skelton’s attorney, John Goffstein, who had contended, “The ballot measure is unconstitutionally vague because it states it is not a rollback measure, when in fact, that is the effect of the proposition.”

But Hemphill disagreed, writing, “The critical test for the sufficiency of a ballot measure is ‘whether the language fairly and impartially summarizes the purposes of the measure so the voters will not be deceived or misled’ … None of the provisions of 321.244.1, RSMo. mandate specific language for the type of ballot measures at issue here. The court has reviewed the language of the propositions and finds them to be in substantial compliance with the ballot form set out in section 321.244.1, RSMo.”

However, Gonder said, “We believe the issues in the petition we filed are different from those presented in the earlier case.”

Besides the issue of the ballot language, Hilmer noted that during a nonreassessment year, SB 711 provides that a taxing entity can levy up to its maximum ceiling if it conducts a public hearing and adopts “an ordinance, resolution or policy statement justifying its action prior to setting and certifying its tax rate.”

MFPD officials estimate the district’s fiscal 2011 tax-rate ceiling — which will be set this August — at nearly 65.3 cents. If voters had not approved Proposition 1 and Proposition 2, that ceiling would be 40 cents more, Hilmer said.

“This is an example, as I’ve been saying over and over, of the bureaucratic nightmare, the struggle that we’re carrying when you do something so groundbreaking like letting people reduce their property-tax rate. This is a one-year issue. This is never a problem going forward …,” he said, noting the district already has collected tax revenue based on the board-approved tax rate. “I’ll say it again: Nothing has changed since November when the AG’s office declined to ask a judge for injunctive relief, and if it wasn’t a big deal for them then, I don’t know why it would be now. We’ve already collected the money.”

Asked what kind of remedy the attorney general would seek since the money has been collected, Gonder said that would be a decision made by the court.

“At this point, we’re not asking for anything specific,” she said. “We’re asking the court to rule and the remedy we anticipate then would be relief by a court as well.”