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2-25-2015


TENSIONS RISING
AT PARKVILLE
City wants audit of downtown tax district

by Alan McArthur
Landmark reporter

Frustrations between two groups in Parkville have reached the point that the board of aldermen has asked the Missouri state auditor to audit the Parkville Old Towne Market Community Improvement District (CID).

The CID operates independently of the city and collects its own tax revenue through a one percent special sales tax within the downtown district. The only authority the city has over the CID is to approve the board members.

The board of aldermen approves the directors for the CID, but several slates of proposed directors have been submitted and declined by the board since June 2014.

On Sept. 10, the board and Nan Johnston, mayor, sent a letter to the CID, which was obtained by The Landmark.

The letter lists eight actions the CID could address to get a slate approved by the board.

Many of the items request changes to the bylaws of the CID in order to limit an interim director to 60 days and allow the board of aldermen to reject individual members from a list of proposed directors instead of the entire list.

The letter also requests changes to the CID conflict of interest section of the bylaws “to avoid even the appearance of a conflict of interest.”

Several aldermen have stated at past meetings that some of the CID directors serve on the panel, which approves grants requests, but are also the person who had submitted the grant request.

The letter from the city also requests that Tom Hutsler and John Kuhns be replaced in their positions and for either Debbie Worley or Dave Williams to resign because they have a familial relationship.

“The POTMCID deserves the increased scrutiny it is receiving from the city and the added restrictions contemplated above for many reasons, including the lack of meaningful representation on the board of directors from the broad diversity of property and business owners located within the POTMCID boundaries, and the long history of complaints about the way the POTMCID Board of Directors operates that the city has repeatedly received.”

Reached by phone Wednesday morning for comment on the city’s action, Tom Hutsler, chairman of the CID, told The Landmark the CID is complying with all statutes and is conducting business appropriately.

“The CID has to provide to the state every year our budget and our accounting--how we have spent the money and how we are going to spend the money,” Hutsler said. “We copy the city on everything we do.”

Hutsler said the one percent downtown sales tax generated $58,235 in 2014. That’s down from $64,179 in 2013, he said.

Hutsler said the CID has a full slate of nine board members. To the apparent chagrin of the city, Hutsler was recently re-elected to the position of chairman of the CID and John Kuhns remains as treasurer.

“Since last August the mayor has refused to acknowledge our slate of board members. Our slate was automatically approved based on her non-response. They believe they have not approved our slate and they believe they have responded to us,” he said of city officials, stating that the CID disagrees with the city’s stance on that topic.

In addition to sending the letter in September 2014, the aldermen also submitted an open records request to the CID on Aug. 28, 2014 for minutes from CID meetings. Marc Sportsman, alderman, said the request was fulfilled on Sept. 12, 2014.

Sportsman said referred to it as “the worst response to an open records request” he has ever seen. He said there were several instances where meeting minutes were missing, but the CID board had approved the minutes at the next meeting. Some of the minutes also included discussions of how to avoid having the CID dissolved by the city including incurring long-term debt, said Sportsman.

Hutsler defended the CID’s response.

“Carol Kuhns, our district manager, spent 12 hours providing the city with 350 pages of documents and responded in a timely three-day fashion. The CID did not charge the city for the copies or for her time,” Hutsler said.

Sportsman told the board of aldermen that their interest in the CID had been questioned and recounted an attempt by the mayor and some of the aldermen to attend a CID meeting which was scheduled and posted for 8 p.m., but when the aldermen arrived the meeting had actually occurred at 5 p.m., he said.

Another point noted by Sportsman was the CID has changed its own bylaws to no longer require an annual audit of its finances and only require an audit every three years.

“The board of aldermen has very little authority over the CID,” said Johnston. “The only thing we can do is approve or not approve the board members. We have chosen not to approve several slates with certain board members on them because we think the board would run smoother without some board members.”

In addition to not approving the board members for the CID, the city has also sent a letter on Dec. 15, 2014 to the Missouri auditor to request an audit of the district. In the letter Johnston says there was questionable activity discovered through the open records request.

According to the letter, some of the alleged behavior includes reimbursing board members for services or items being purchased for the CID before receiving board approval and appointing interim board members to fill vacancies and avoid approval from the Parkville Board of Aldermen. Also, contracting directly with current board members for services, including purchasing employee-type insurance to cover work done by members of the board.

Requests for an independent audit are evaluated by the Missouri state auditor's office and a response then provided as to whether an audit would be performed. Audits are generally done at the expense of the entity being audited by the state.

Johnston also told the board the city had received a request from the CID to pay attorneys fees in the amount of $8,000. The aldermen informally declined to pay the fees.

Hutsler seemed unfazed by the city’s request for a state audit.

“We look forward to a prosperous year and look forward to receiving grants from organizations to promote and beautify downtown Parkville,” he told The Landmark.