Jackson County Executive
Calls For TIF Reform

UPDATE: January 28, 2010 -- The City Council of Kansas City, Missouri, passed an ordinance creating a legal Tax Increment Financing (TIF) Commission of Kansas City, Missouri-Jackson County.

Jackson County Executive Mike Sanders released this statement:

“On behalf of the citizens of Jackson County, I want to commend the City Council for taking an historic step towards implementing TIF reform in our community.  It is imperative that all of the taxpayers of our community have a voice in how their tax dollars are spent, and the Council's actions will help ensure that the TIF process is both transparent and accountable to the public that it serves.  Furthermore, it is the County's intention to dismiss its lawsuit upon this ordinance becoming effective.”

UPDATE: January 22, 2010 -- This morning Jackson County filed a request for Tax Increment Financing (TIF) reform with the Clerk of the 16th Circuit Court. Joe Bednar of Spencer, Fane, Britt and Brown, LLP filed a petition for declaratory judgment and injunctive relief, a motion for temporary restraining order (TRO) and suggestions in support of the TRO on behalf of Jackson County.

Jackson County Executive Mike Sanders opened a news conference regarding TIF held Tuesday, January 19, 2010, with the following statement:

At 1:00 this afternoon, Jackson County government formally notified the attorney for the City of Kansas City, the attorney for the Kansas City TIF Commission, and the Mayor of Kansas City, of our intent to sue both entities in our effort to reform a TIF process that we allege violates Missouri State law and denies the taxpayers of this community an adequate voice in how their tax dollars are being spent.

Jackson County Executive Mike Sanders -- flanked by County Legislative Chairman Henry Rizzo (far left), the County's representatives on the TIF Commission, and representatives of the Kansas City Public Library and Kansas City, Missouri School District -- answers questions during the January 19 news conference.

The job of government is to make sure that we are good stewards of the tax payers’ dollars, and government must work to make sure any process that spends millions of tax dollars is both transparent and accountable to the public it serves. In my years of public service, the one truism I have learned is that the more sets of eyes you have scrutinizing how tax dollars are being spent, the better the taxpayers are served.

Jackson County supports the use of TIF when it is used as a legitimate tool for economic development. However, common sense dictates, and the law requires, that all tax payers must be represented for the TIF process to be fair, accountable and legal.

In 1997, the Missouri legislature created the current TIF statute with a system of checks built in; foremost among those checks is the right of the non-mayoral appointees to ask questions about how their tax dollars are being spent. 

However, the non-mayoral appointees have repeatedly been denied the right to vote or even to publicly express their opinions about important projects or policies of the Kansas City TIF Commission. This has made these members of the Commission mere spectators to the expenditure of millions of tax payer dollars, rather than being allowed to serve as the watchdogs that state law gives them the right to be.

When tax dollars are diverted away from basic government functions without adequate oversight, everyone suffers. Jackson County views reforming the TIF process as essential to helping to restore the public’s confidence in a process that has fallen out of favor, and in safeguarding public dollars for essential public services such as law enforcement, fire protection, road maintenance, libraries and the education of our children. 

In requesting this reform, Jackson County’s position is reasonable; we are simply asking that an agency which hands out millions of taxpayer dollars be accountable to the public it purports to serve and to begin following state law. 

The use of TIF is and can be a very complex issue. However, the County’s request for reform can be detailed very simply.

In 1991, Kansas City passed an ordinance creating its TIF Commission, which was comprised of six members, all appointed by the Mayor. Six years later, in 1997, the Missouri legislature changed the landscape for TIF Commissions by passing the Missouri TIF Act, which mandated that before any city could approve any TIF project or plan, that it “shall create a Commission of 11 persons.” However, for the last almost 12 years, the city has continued to disregard that statutory mandate, and has continued to operate its TIF commission as if the 1997 law was never passed. 

Thus, the mandate for reform is very simple: Six does not equal 11.  Until it does, the City should not have the power to move TIF projects forward until they provide all of the taxpayers in this community the seat at the table that is theirs by right under Missouri law.

Jackson County has not reached the decision to seek TIF reform through the courts either quickly or lightly. 

The County and the other groups represented here today began working with the City and its staff since as early as 2007 to attempt to reform the TIF process. Even as late as Friday of last week (January 15), we were attempting to work with the City and its staff to reach an agreement and to avoid the need for litigation. However, that process only highlighted how far we were apart as the City indicated it would never consent to a binding agreement that they thought might diminish the unqualified power of Mayor through his appointees.

We are still willing to work with the Mayor, the staff or anyone else he may designate so long as they are actually earnest in their desire to reform the TIF process. Regardless of our continued willingness to work with the Mayor or the staff, however, we will remain unwilling to budge on one fundamental principle: Reform must come to the TIF process. Whether by a new city ordinance, a court order or new legislation in Jefferson City, the current TIF process must be reformed so that it is accountable and is better designed to serve the public interests it was created to support.

TIF Correspondence

Jackson County recognizes that Tax Increment Financing (TIF) can be legitmately used to spur economic development. However, County officials also realize that TIF diverts tax dollars from public services such as law enforcement, fire fighting, education and libraries. 

Voiding Commissioners’ Votes

August 18, 2008
On August 13, 2008, the Kansas City TIF Commission held a public hearing considering whether or not the developer of a TIF project had worked in Good Faith to satisfy the MBE/WBE goals for the project. The Commission voted 5-3 passing a motion stating the developer had failed to meet the Good Faith standard. However, TIF Commission Executive Director Joseph P. Gonzales sent this letter to commissioners voiding their vote. Four of the five commissioners who voted for the motion—all except one Kansas City mayoral appointee—he contended, should not have been allowed to vote on this matter. All three commissioners voting “no” were Kansas City mayoral appointees. Jackson County’s representatives on the TIF were among the four whose votes Gonzales declared invalid.
> Download This Letter (PDF)

The Role Of TIF Commissioners

September 19, 2008
The firm of Bryan Cave LLP sends a memorandum to the TIF Commission of Kansas City, Missouri, regarding the "Role of Members Representing Tax Districts... on the TIF Commission."  
> Download Memo (PDF)

March 31, 2009
A letter is sent on behalf of Jackson County requesting a clarification of the September 19, 2008, memo. The County contends that, while the September memo spells out how the TIF Commission has "historically" conducted business, the memo has no "legal basis" for the assertions it makes.
> Download This Letter (PDF)

June 8, 2009
Jackson County receives a response to its March 31, 2009, request.
> Download This Letter (PDF)

Seeking Answers To Questions

May 27, 2009
Jackson County is joined by the Kansas City, Missouri School District and the Kansas City Public Library in a letter to the chairman of the TIF Commission, requesting that he call a special meeting of the Board of Commissioners because "members of the TIF Commission have had several questions go unanswered."
> Download This Letter (PDF) 

June 1, 2009 
Joseph P. Gonzales, Executive Director of the TIF Commission, sends an e-mail in response to the May 27 letter.
> Download This e-mail (PDF)  




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