Audit: CID board members in Van Buren misused $300K of tax funds

Several former board members of a community improvement district (CID) in Van Buren, Missouri, “spectacularly” misused nearly $300,000 of tax funds to pay their private business debts and private business projects, according to a state audit report released Monday.

CIDs are special taxing districts used to fund community improvement projects and can include a variety of purposes such as land acquisition and development, business retention and capital improvements.

“We discovered several members of the initial Black Mountain CID board used taxpayer money for their own benefit,” Missouri Auditor Nicole Galloway said in a news release from her office. “CIDs are meant to fund projects that benefit the community. They aren’t supposed to be illegal personal piggy banks for board members or anyone else, especially for spectacularly improper projects like a $10,000 walk-in beer cave.”

Black Mountain CID was organized and approved by the City of Van Buren in 2010 to create a sales tax for the purpose of making public infrastructure improvements inside the district’s 17 acres. All but one member of the initial CID board owned property or businesses in the CID. The current board has four new members and one vacancy.

Two members of the current board contacted Galloway’s office in December 2018 with concerns about how the previous board had spent taxpayer dollars and the current board passed a resolution formally requesting an audit.

The audit found $296,937 in CID funds were spent for purposes not allowed by state law. Those expenditures included more than $100,000 in private business loans to purchase equipment and inventory for resale; provide cash flows for operational expenses; and perform repairs and maintenance to the Black Mountain Convenience Store, owned at the time by CID board members Donald Black, Curtis Black and Jacob Black.

According to the audit, CID funds were used in 2013 and 2014 to make $125,972 worth of improvements to the convenience store including new fuel pumps ($52,324), a new canopy over the pumps ($25,866) and a walk-in “beer cave” ($9,960). Six months after the work was completed, the convenience store was sold to new owners.

The audit also found the CID board could not provide proper documentation to support more than $77,000 of expenses, including more than $51,000 paid to entities owned by board members. In addition, the CID board approved, without a written agreement, reimbursement of $135,000 in private business construction costs to a local developer who had past business connections to the board chairman.

Galloway’s office has sent the audit findings to state and federal law enforcement authorities.

The full audit may be found here.

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