State auditor says MFPD levied $10 million more in taxes than allowed

Attorney general continuing to study ‘complicated issue’


Missouri Auditor Susan Montee says the Mehlville Fire Protection District levied nearly $10 million more than the amount legally allowed with its fiscal 2010 tax rate.

In a report released last week, Montee cited 12 taxing entities, including the Mehlville Fire Protection District, that have levied tax rates in excess of what is permitted by law.

As first reported by the Call last November, Montee’s office deemed the fire district’s tax rate to be higher than permitted under state law and referred the issue to Attorney General Chris Koster’s Office.

In an Oct. 27 letter to Administrative Chief Fire Officer Tim White, Ronald Holliger, general counsel for Koster’s office, wrote, “… It is our intention to file a petition for an injunction barring your attempt to levy a higher-than-authorized rate within 15 days of this letter. If you voluntarily come into compliance, we will not seek the assessment of costs against the district.”

After the fire district received the letter, Board of Directors Chairman Aaron Hilmer and Mathew Hoffman, the fire district’s legal counsel, met Nov. 17 in Jefferson City with representatives of the attorney general’s office, including Holliger and Matthew Dameron, Koster’s chief of staff.

During the brief meeting, Hilmer said he and Hoffman were informed the attorney general had no plans to pursue any legal action against the district.

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 earlier this year 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.

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.

In her report, issued Jan. 26, Montee stated the fire district’s tax rate will generate $9,882,027 more than permitted.

While the board has yet to adopt a 2010 budget, the district’s revised 2009 budget projected $19,924,040 in expenditures with anticipated revenues of $17,553,938 — a deficit of $2,370,102.

The 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.

Regarding Montee’s report, Hilmer told the Call, “… To me, this is rehashing a dead issue. I really wish our elected auditor would spend more time on present issues rather than ones that have already been decided …

“The issue went away once we had the chance to sit down in the attorney general’s office, explain to them the ballot language and explain to them the statutory authority associated with the fire district … In my opinion, this is more than beating a dead horse because the money has already been collected — all the money’s been levied — and we’re already spending it.”

But Nanci Gonder, press secretary for the attorney general, told the Call that Koster is continuing to study the issue.

“… We are still considering all the options to determine what action we need to take and it’s a very complicated issue and really unprecedented I think in terms of some of the issues that are raised,” she said.

One of the issues involved is how the ballot language of the two propositions “interplays” with the provisions of Senate Bill 711, she said. The ballot language for both measures stated they “shall not be subject to any tax-rate-reduction rollback.”

“So those are the kinds of issues that we’re looking at and trying to consider the best way for us to respond,” she said.

Hilmer said the attorney general’s office has not been in contact with fire district officials.

“Quite frankly, once they decided not to file for a temporary restraining order, they lost the initiative … We met with them. They said they were not going to pursue the issue,” he said. “And I think the thing that’s really getting lost here is by everyone’s admission, this is a one and done. This is a one-year issue.”

Besides the issue of the ballot language, Hilmer noted that during a nonreassessment year, Senate Bill 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 at nearly 65.3 cents. If voters had not approved Proposition 1 and Proposition 2, that ceiling would be 40 cents more, Hilmer said. The board will set the district’s tax rate in August.

“That’s why I was always amazed at the hot air Montee’s office wasted when it was only a one-year anomaly,” he said. “It takes a dry-erase board and a flow chart to even explain this to somebody.”

District residents have nothing to worry about, the board chairman said.

“In fact, this issue just shows what happens when someone goes against the grain of the bureaucratic government, letting people reduce their tax levy rather than what we see all the time is that they need to increase their tax levy — nobody knows what to do with this,” he said.

“To me, it’s past tense. We dealt with it. I’m going to say it again: The money’s been collected … As a resident looking at this, I look at both local school districts in the Mehlville Fire District who are by all accounts coming for a tax increase in the near future. We see the granddaddy of all poor excuses for a tax increase, Metro, coming in April,” Hilmer said, adding voter approval of Proposition 1 and Proposition 2 means that 40 cents cannot be levied by a future board.

“The voters in their infinite wisdom, in my opinion, did the right thing and they protected themselves from any future tax increases that they don’t have say on … Now that’s a welcome sight to me. I don’t have to worry about some backdoor tax increase. I have enough people on my front door trying to get money,” he said.