MARYLAND HEIGHTS 鈥 The sewer district serving 果酱视频 and 果酱视频 County residents is the latest organization to challenge a controversial levee district along the Missouri River, alleging in a lawsuit that it鈥檚 unclear how the Howard Bend Levee District has spent millions in tax dollars over the years.
The Metropolitan 果酱视频 Sewer District鈥檚 lawsuit, filed March 25 in 果酱视频 County Circuit Court, is yet another legal and financial headache for the troubled Howard Bend Levee District. The levee district is already fighting a lawsuit from its largest taxpayer, Hollywood Casino, and the city of Maryland Heights is contesting taxes charged on property it owns in the district, too.
MSD, represented by attorneys at Thompson Coburn, says the levee district does not make its methodology for calculating levee taxes available. Further, the sewer district says Howard Bend has not kept proper financial records over the years. MSD asks the court to order an 鈥渆quitable accounting鈥 of Howard Bend鈥檚 finances 鈥渋n order to understand how the millions of dollars of taxes paid by it and the other landowner taxpayers have been used by the HBLD.鈥
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鈥淭he HBLD鈥檚 lack of transparency has made it difficult, if not impossible, for landowner taxpayers, including MSD, to understand how Levee Taxes are calculated and used by the HBLD,鈥 MSD says in its lawsuit.
Critics say there's few guidelines for deciding levee district taxes and little financial oversight of the districts, which often pay big money to lawyers and engineers.聽
Howard Bend board chairman Ed Ortmann said MSD鈥檚 lawsuit 鈥渋s replete with errors and misinformation.鈥
鈥淭he District has acted in accordance with its statutory requirements and obligations, both in protection of MSD from flood damage and in the level of transparency required by Statute,鈥 Ortmann said in a statement. 鈥淭he District has made readily available all audits and reports that it is legally required to make, and it has followed all relevant laws in exercising its assessment authority over landholders in the District, including the calculation and assessment of levee taxes.鈥
Levee districts have proliferated along the banks of the state鈥檚 rivers, taxing property owners within their boundaries to pay for levees that allow farming or development. Many of the districts in the area are operated by lawyer David Human and other attorneys at the law firm Husch Blackwell, who have billed millions to the districts over the years. And unlike most taxing jurisdictions, levee districts can charge assessments to nonprofits and public entities, such as MSD.
The action is the latest from government agencies that say the Sny Island Levee and Drainage District has illegally high levees.聽
But development in Howard Bend has not taken off. Stormwater after heavy rains still floods the area, and the district is trying to finance a pump station and other infrastructure to manage it and catalyze new development. Credit ratings agency Fitch, however, recently downgraded the levee district鈥檚 debt to junk status and warned it could default on some of its roughly $22 million in outstanding bonds.
Fitch estimates Howard Bend taxpayers are withholding some $1.5 million from the district, which in 2019 collected about $2.4 million in property assessments.
Taxes skyrocketed in Howard Bend in 2020, which the levee district blames on the casino鈥檚 lawsuit and refusal to pay its share. The levee billed 果酱视频 County taxpayers $514,000, nearly double the charge from the prior year. MSD, which operates a large treatment plant in the district, says it was charged $477,000 in 2020 levee taxes, a 60% jump from the year prior. MSD is funded by ratepayers in the city and county and is the second-largest taxpayer in Howard Bend.
In its lawsuit, MSD says Howard Bend 鈥渁rtificially and intentionally inflated its budget by approximately the amount of Levee Taxes paid under protest in 2019 causing MSD (and all other property owners) to be taxed in amounts far in excess of the actual amount required鈥 to build and maintain its levee and other infrastructure. It wants a judge to order a refund of those taxes and declare that the taxes charged on different pieces of property are 鈥渁rbitrary鈥 and 鈥渘ot uniform.鈥
The MSD suit references a February 2019 letter the casino and Maryland Heights sent to Missouri Auditor Nicole Galloway requesting an audit of the district鈥檚 finances. And it references the casino鈥檚 lawsuit, which accuses Howard Bend of improperly co-mingling bond proceeds and spending money on projects the casino did not agree to fund.
鈥淭he Auditor Letter and Casino Lawsuit raise additional concerns regarding the transparency of the HBLD and the HBLD鈥檚 use of Levee Taxes and management of the district,鈥 MSD says.
Like the casino, MSD says its relationship with the levee district is governed by a separate agreement that called for specific flood protection projects in the district. But those improvements, such as a pump station, never happened, which MSD says contributed to flooding in 2016 and 2019 that caused over $1 million in damage to its treatment plant.
MSD says it will need to spend $2 million to protect its plant with its own flood protection system if Howard Bend does not build the promised improvements. Its lawsuit says Howard Bend owes MSD $370,000 in uninsured costs for the flooding of its treatment plant.
And, MSD says, even though the pump station hasn鈥檛 been built, it discovered that Howard Bend has built $4 million in sanitary sewer infrastructure to serve 鈥渦ndeveloped property鈥 in the district.
鈥淭hose works are currently not in use and are not necessary to preserve or maintain any of the works in the Reclamation Plans,鈥 the sewer district says in its lawsuit. 鈥淢SD maintains this unused infrastructure and incurs costs to do so.鈥
MSD鈥檚 suit asks the court to declare that it doesn鈥檛 have to pay levee taxes on the unused sewer infrastructure and order the levee district to build the pump station.
Jacob Barker • 314-340-8291 @jacobbarker on Twitter jbarker@post-dispatch.com
