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Mehlville to seek reimbursement from St. Louis County for interest on loans

County Executive Charlie Dooley soon will receive a letter from Mehlville School District administrators and board members who say they're fed up waiting for the county to release the district's property tax revenue.

Board members have authorized administrators in the past four months to apply for an unprecedented total of $11.25 million in tax anticipation notes from Midwest BankCentre to help alleviate severe cash-flow problems.

The district currently estimates that total interest paid for the five separate instances of tax anticipation note loans could amount to $41,397. However, board members don't believe the district should have to foot that bill and directed administrators last week to seek reimbursement from the county to pay back the money the district will have to spend in interest because of the fund delay.

Mehlville should receive about $52 million in total property tax revenue by January.

The district normally receives two payments totaling $4 million in revenue by November each year, however, the county sent Mehlville only one payment of $100,000 last month. County officials also have informed the district to expect one smaller payment in December while they are busy computing new tax rates and learning a new computer system.

Randy Charles, assistant superintendent for finance and the district's chief financial officer, told the Call the county's workload has quadrupled this year because it is figuring four new separate rates for every tax entity — real estate, personal, agricultural and commercial. This caused bills to be sent out two weeks later than expected in November, he said.

Also, the county is rewriting its computer programming system so it now can properly calculate the different levies, collect the revenue and distribute it, he said, which is slowing down the payments.

For the fourth time this year, board members unanimously authorized Charles Dec. 1 to execute a loan with Midwest BankCentre to cover district payroll expenses.

The bank was scheduled to release $3.5 million in tax anticipation notes Dec. 3. Board members also authorized, if needed, a fifth loan of $2.5 million to be released Dec. 18.

"I really have to express my frustration," President Cindy Christopher told Charles and other board members Dec. 1. "First of all, we're a hold-harmless district ... we're already harmed from the state's standpoint as far as our revenue. And then you have 80 percent ... from local revenue — and thank goodness our local population is good enough to be able to fund that — and then to have it held up at the county level because they have new computers, because they're choosing to do something different, which, in the long run I am sure is well and good, but we're being held again.

"I guess I just really wish that we could have some kind of recourse on this."

Board member Bill Schornheuser pointed out that it's possible the county hasn't collected the revenue because the bills were sent out late this year, but board member Rita Diekemper responded noting that the bills were only two weeks late and the county has been holding up Mehlville's payments for a month and a half.

Someone has to pay the interest on those funds and reimburse the district, Diekemper said.

"Can you call them (the county) and ask them how much interest they're going to pay on that?" she asked Charles.

"Can we make a formal request, please, as a board, to pursue interest reimbursement for those funds?" Diekemper later asked Ricker.

Charles told board members if the district had known it was going to be in this much trouble, he would have asked the board to apply for more money from a low-interest rate advanced funding program earlier this year. The district applied for and received $7.5 million in October from the Missouri Health and Educational Facilities Authority, but that wasn't enough to hold over the district until property tax revenue started to arrive, he said.

Nearly all of the money from MOHEFA and the tax anticipation notes was used to cover the district's payroll expenses, which total $2.6 million every two weeks.

"The other frustration we have, as a school district, is that we obviously have all applied for a certain dollar amount under the advanced funding program," Charles said. "Had we known that the county payments were going to be delayed this much, we would have qualified for a much larger amount through the advanced funding program at a much lower rate of interest. The real concern that we're hearing from school districts is that for whatever reason, the county didn't know."

Typically, he said, the county mails a letter in early November or late October giving the district an outline on when it can expect its payments.

"We didn't get that letter," he told board members.

Charles said when he contacted the county and inquired when the district could expect its payments, "then and only then" did he discover that the district only would receive one payment in November and one in December.

But board Vice President Matt Chellis questioned whether the county is required to send payments to the district before the tax deadline.

"There's no obligation by the individual taxpayer to make those payments before Dec. 31," Chellis said. "Is there any obligation by the county to turn that money over to us ... before Dec. 31 at all?"

Ricker answered, "I think we have to pursue that from a legal standpoint to find out what their obligation is.

"... I would imagine, just speaking off the top of my head, that their ability to do this, is probably why they're doing it,'' he said.

Ricker said he and other administrators would look into if reimbursement from the county was possible. He told the Call that a letter to the county executive had been drafted that requests assistance in the amount of interest the district has had to pay while waiting for revenue disbursements.

The letter also states, he said, that it is the opinion of the district that it should receive any extra interest the county receives while Mehlville's funds sit in the county's accounts.

Also, Ricker told the Call that district attorneys are looking into the legality of what the county has done.

Days after the board meeting, Charles told the Call he had done some research and spoken with officials from other districts, but was not coming up with any good news for the district.

Under state law, he said, the county collector is only required to disperse whatever is entitled to the district at least once a month — meaning the county can't distribute what it hasn't collected.

"The county is fulfilling that requirement," he said. "Short of pressure from other county officials, I don't know what other avenues we have."

John Firganza of the county collector's office was unable for comment before the Call's press time.

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