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Wednesday, Aug. 24, 2016

PILOT: City badly needs constant, dedicated revenue stream

Sunday, February 2, 2003

SIKESTON - It's all about getting a new constant, dedicated stream of revenue the city badly needs, PILOT supporters say.

"We've got to raise more revenue," said Mayor Phil Boyer, "and that's why this thing first got started."

While a payment in lieu of taxes, or PILOT, has been brought up in the past, until now "the need hasn't been there," Boyer said.

If approved, the PILOT would bring in an estimated $1.6 million to the city's general revenue fund. "It's time we reap some of the benefits," said Councilman Jerry Pullen.

If any department were bringing in excess revenue, the council would be looking at ways to transfer it to general revenue. "If it was the library, we would go after them," said Boyer.

While the BMU has offered voluntary transfers in the past, councilmembers said they should not have to come "hat in hand" for funds.

"BMU is part of the city," said Councilmember Sue Rogers. "This city council should not have to go to them and ask every time a need comes up when we have a legal right to a PILOT."

City Manager Doug Friend said all parties also seem to agree that if money is available, it should go to the city.

Friend said he also believes all involved agree a PILOT can be imposed on retail customers - the business, industrial and residential users in Sikeston.

The bone of contention is whether it can be imposed on the long-term contract wholesale purchaser cities - Columbia, Carthage, Fulton, West Plains and Trenton. "We have an opinion that says we can," said Boyer.

Supporters primarily cite a 1994 opinion from John Oliver in which he states, "It is our opinion that the City of Sikeston, Missouri, can by ordinance require the Board of Municipal Utilities to impose a payment in lieu of taxes on its non-resident wholesale customers. While he adds "This response is limited to non-contractual legality," in a later section Oliver states "the implementation of a PILOT does not constitute a breach of your purchase power contracts."

Oliver also states "It is our opinion that no provision of the Bond Ordinance as amended prevents the imposition of a payment in lieu of taxes."

Current supporters said they have not yet been presented with any documents indicating imposing a PILOT is not permissible, and all documents related to the PILOT were sent to MBIA, the bond's insurers. "We've never been told by MBIA that what we're doing is wrong," Boyer said, adding that if they had, the wouldn't have proceeded in this direction.

"BMU said MBIA said it's a local matter," said Pullen, "and that we need to settle this local issue ourselves."

Boyer said most of the resistance to the PILOT appears to be coming from "folk sitting on the outside." He also answered statements that it would be immoral or unfair to impose the PILOT and the letter from Columbia by saying, "Just because you thought you were creating a co-op doesn't mean that's what it is."

Supporters expressed frustration with the misinformation and confusion included in "coffee shop" discussions of the PILOT. "It's time the truth came out," said Pullen.

An increase of 10-14 percent for Sikeston retail users "will not happen," Pullen said. "The city council approves those rates. We are not going to allow any more than a 3-percent increase. That will be their fair share."

Pullen said it Sikeston voters put the council into office, "and we'd like to see their support on this as well so we can prove this is the right thing to do."