School tax shift covers $700K error

Administrators in the Cape Girardeau School District contemplated sending out supplemental property tax bills after learning about a $700,000 mistake, the district's new finance director, Misty Clifton, said Thursday.

Instead, the school board Tuesday approved a shift of taxes from the debt service fund to the capital projects fund to maintain operating funds at the budgeted level, Clifton said.

Sending out new tax bills would have been a challenge, she said.

"I talked to the county collector and ran some numbers, and the cost is significant, as is the time involved for collections," Clifton said. "And we have to keep in mind the taxpayers. They would have to get a supplemental tax bill."

Clifton was hired to take over the district's finances Nov. 5, after an audit revealed mistakes in the district's financial reporting and budgeting under her predecessor, Brenda McCowan. At the same time, the district put off consideration of the 2007-2008 operating budget, prepared by McCowan, because of issues with figures she supplied.

McCowan was moved to a newly created position -- coordinator of federal programs and grants -- at that time. On Tuesday, the board voted to place McCowan, a former assistant principal at Cape Girardeau Central Junior High School, on paid administrative leave.

The board held an emergency closed meeting for personnel issues Wednesday evening. Dr. Steven Trautwein, president of the board, was not available Thursday to discuss what actions the board took during the meeting.

The board hired Clifton from her job as a payroll manager for Southeast Missouri State University at the same time it moved McCowan to her new job. And after approving the revised budget presented by Clifton on Nov. 19, the board voted in closed session to terminate the contract of the superintendent, Dr. David Scala. They gave no reason for their action against Scala, who had announced in October that he would quit at the end of the school year despite having two years remaining on his contract.

In severing ties with Scala, the board exercised a provision in his contract allowing them to terminate him on 30 days' notice without stating a reason and to pay him through the end of the school year.

The district's tax collection problems began when the wrong rates for this year's tax bills were reported to the state auditor's office.

School districts typically have two tax rates -- an operating levy, which can be split among general and special purpose funds, and a debt service levy, which is used to retire general obligation bonds approved by voters. The operating levy is governed by the Hancock Amendment tax limitations, while the debt service levy must be set at a level sufficient to make scheduled payments.

The board approved a total levy of $4.16 per $100 assessed valuation Aug. 27. That included $3.60 per $100 for operations and $0.56 per $100 for debt service.

The figures reported to the auditor, however, showed a total levy of $4.0284 per $100 assessed valuation, with $3.3044 per $100 for operations and $0.7240 per $100 for debt service.

That was the rate Cape Gir?ardeau County Collector Diane Diebold used on tax bills sent to district residents in October. The bills reflected the rates certified by the state auditor, Clifton said, because the district did not send a required report on the rates as set by the board to the county.

On Tuesday, the board voted to continue using the $4.0284 total levy. It reduced the debt service levy from $0.7240 per $100 assessed valuation to $0.5924 per $100. The difference, $0.1316 per $100 -- enough to produce $700,000 in revenue -- was designated as the funding source for the district's Capital Projects Fund, which will be used in the coming year to fund several projects, including the alterations needed at the district administration building to accommodate the alternative education program.

The rates set Aug. 27 were the same as the rates for 2006, and the operating levy exceeded the amount allowed under the Hancock Amendment. The amendment requires taxing jurisdictions to cut tax rates when increases in property values exceed the rate of inflation, as they did this year as a result of reassessment.

The district's total assessed value for 2007 was $537.7 million, compared to $491.5 million in 2006. After adjustments for new construction, the assessed value increased by 7.55 percent, while inflation for the year was 2.6 percent.

The reasons McCowan recommended using the 2006 rates for 2007 are unknown, Clifton said. By the time the board was asked to set the operating levy in August, McCowan should have known that the higher property values were going to result in a rate reduction, Clifton said.

"We typically have an idea of what assessed values are in June or July," she said.

When reached on her mobile telephone Thursday, McCowan declined to comment on her suspension or the tax issues.

rkeller@semissourian.com

335-6611, extension 126