Development could cost Cape school district tax money
Wednesday, February 28, 2007
A proposed tax break for the Town Plaza developer renovating the former Sears building could cost the Cape Girardeau School District $126,000 in property tax revenue over 25 years, city officials said.
That would amount to a revenue loss to the district of about $5,000 annually, Mayor Jay Knudtson and other city officials told school board members at a special meeting at the district's central office.
School board member Charles Bertrand said that's a relatively small amount of tax revenue for the district. "It's a drop in the bucket," he said.
But he urged the mayor to make sure that any tax breaks don't cause serious financial problems for the school district. The district is heavily dependent on property tax money.
Knudtson promised the city council would consider how any tax break for a developer would impact the school district.
"We will throw you no curve balls," he told the council. The school board took no vote on the proposed tax breaks.
Knudtson said that under state law, the city council will have the final say on whether to grant tax breaks to Greater Missouri Builders of St. Louis, which owns the former Sears building and the Town Plaza shopping center.
The developer is asking that the city approve its use of a chapter 353 tax abatement. That would freeze the developer's payment of property taxes at its current rate for 10 years. After that time, Greater Missouri Builders would pay only 50 percent of what it would otherwise pay in property tax on improvements for a period of 15 years.
That means the developer wouldn't be fully taxed on the improvements it plans to make to the Sears building for 25 years, city officials said.
Part of the Sears building is being renovated to house a call center for National Asset Recovery Services Inc. or NARS.
The special meeting was held prior to the board's regular session.
At the regular meeting, the board accepted the long-awaited 2005-2006 audit report.
The board received the report four months later than required under the district's policy. Under the policy, the audited financial statements are to be presented to the board by Oct. 31 each year.
Superintendent Dr. David Scala assured the board that future audit reports will be submitted to the board by the October deadline.
Auditor Jeff Stroder blamed the delay on getting the previous year's financial statement accepted by the Missouri Department of Elementary and Secondary Education.
The 2004-2005 annual report to DESE was submitted by the Aug. 15, 2005, deadline but final revisions weren't approved by DESE until this month, Stroder said. As a result, that delayed completion of the 2005-2006 audit, he said.
Brenda McCowan, finance director for the Cape Girardeau School District, said she was partly to blame for not getting the errors corrected more quickly to meet DESE's accounting procedures.
Stroder said the errors were technical ones that had to do with how money was accounted for in various categories, not the overall balance sheet.
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