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Legal case could result in payout to thousands of St. Louis County taxpayers

Legal case could result in payout to thousands of St. Louis County taxpayers

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CLAYTON • A pending lawsuit may force St. Louis County to address a claim that its revenue department neglected to add interest to thousands of property tax settlements over a 10-year period.

The county could be on the hook for $2.5 million or more should the case be resolved on behalf of the 2,700 home, property and business owners named in a petition seeking damages and a declaratory judgment.

Property Assessment Review, or PAR, brought the suit late last year. Each plaintiff is, or at one time was, a client of the Clayton-based tax consultant.

Express Scripts, Washington University, Schnucks, Delmar Gardens and several prominent automobile dealerships are among the parties seeking reimbursement.

The suit filed in the 21st Judicial Circuit Court cites Acting St. Louis County Collector of Revenue Mark Devore as the primary defendant.

The recipients of tax revenue distributed by the county — in other words every municipality, school, fire, sewer and water district — are indexed as co-defendants.

The list of nearly 700 co-defendants also extends to nonprofits that benefit from abated taxes or special dispensation. That list includes BJC HealthCare, churches, colleges and even a south St. Louis County Boy Scout troop.

Patrick Keefe, the Clayton attorney representing PAR, alleges in the suit that, “For at least the past 10 years, (the county) has systematically issued these refunds … without also paying to property owners the amount of interest which would have been earned had the protested funds been invested by (the collector of revenue).”

Citing pending litigation, the county declined to comment on the case.

Missouri law stipulates that property owners protesting an assessment, and the resulting tax liability, must deposit the contested amount in an escrow account as the appeal advances through the state tax commission.

The law additionally obligates the county to invest the escrow funds in an interest-bearing account.

Should the taxpayer prevail with the tax commission, the county is then required to return all or, in most cases, a portion of the money in the escrow account to the homeowner or business.

The reimbursement should include interest accrued while the funds were in escrow — a period that can sometimes stretch to three or four years.

PAR claims that the funds received by its clients did not include the accrued interest and that the county ignored repeated attempts to address the oversight.

“It is certainly difficult for everyone to obey all the laws out there, even the government,” said David Dempsey, who partnered with Steven Weber to co-found PAR 20 years ago. “But we pointed out this error to the county and there has been no willingness on their part to acknowledge the error.”

Citing the “abysmal” rate of interest on county accounts since the Great Recession, Weber cautions that the refund due each plaintiff, if the case goes PAR’s way, could be minimal.

The county earned an average of 2.55 percent on interest-bearing accounts from 2002-2011. And the average interest earned dropped to less than 1 percent in 2013.

Weber says the county treasury has nonetheless benefited from the cumulative interest that should have gone to taxpayers.

“This is a substantial amount of money,” he noted.

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Steve Giegerich is a reporter for the St. Louis Post-Dispatch.

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