The Missouri State Auditor’s office released its third comprehensive audit of Transportation Development Districts Wednesday. Each audit since the first, conducted in 2006 by then-State Auditor Claire McCaskill, has been critical of the districts. State auditor Susan Montee’s office again raised concerns that professional services (i.e. legal counsel, engineering and bond underwriting) were not competitively bid and that many districts failed to file annual financial reports with the state auditor.
But the auditor’s office did note that the Missouri General Assembly did address some of their previous concerns with legislation passed in 2009. Specifically, TDDs now pay fines for failing to submit financial reports and their taxes are now collected by the Department of Revenue. TDDs formerly were allowed to collect and administer their own revenue, though most in Columbia contracted with the city to provide that service.
Two Columbia TDDs were examined in detail (through Dec. 31 2007) by State auditor Susan Montee’s office: Grindstone Plaza TDD, which encompasses the Walmart shopping center on Grindstone, and Broadway Fairwiew TDD, which includes the Walmart shopping Center on West Broadway. Both TDDs charge a half-cent sales tax in the shopping centers developed by companies related to Stan Kroenke.
In examining Grindstone Plaza, the auditor’s office found:
- Legal services (provided by Van Matre, Harrison and Hollis) were not competitively bid and the district spent about $227,500 on them through December 2007.
- Engineering fees, which the district estimated would not exceed $100,000, totaled about $197,000.
- The bond underwriting firm also acted as a financial adviser and received 2 percent of the financing amount in fees, roughly $250,000.
In examining Broadway-Fairview, the auditor’s office found:
- More than $6.8 million in revenue bonds issued by the district were purchased by the developer.
- Professional services were not competitively bid. The district spent about $157,000 for legal services, $304,000 for engineering services and $140,000 for bond underwriting through December 2007. The underwriter also acted as a financial adviser.
A response by the districts’ attorney noted that there is no statutory requirement to competitively bid professional services, and since most of the legal work has to be done before the district is established, it would be inefficient to rebid for counsel after the district’s establishment.
To see the complete audit report, click here.
For an investigation on TDDs, click here.
Categories: Business, Financing, Local Issues, State Politics.
