Stone Ridge TDD disagrees with audit

In this May 2015 file photo, a roundabout is under construction to join Stoneridge Parkway and Hard Rock Drive near Sam's Club, as part of a Transportation Development District (TDD) inside Jefferson City.
In this May 2015 file photo, a roundabout is under construction to join Stoneridge Parkway and Hard Rock Drive near Sam's Club, as part of a Transportation Development District (TDD) inside Jefferson City.

The board that operates Jefferson City's Stone Ridge transportation development district disagrees with last week's state audit report on TDDs.

Among the findings in a 38-page report about Missouri's 205 TDDs, Auditor Nicole Galloway said the Stone Ridge group accepted a nearly $2 million construction contract from a company that didn't meet all the bid requirements - but was owned by one of the TDD's board members.

Evan Fitts, Stone Ridge's lawyer in Kansas City, said the questioned contract was awarded in 2007.

He provided the News Tribune with a copy of a memo the district sent the auditor's office in March while their report still was being written.

It says: "The file that was provided to the Auditor's office (last August) included a copy of a bid from the 2007 project including a fax 'time line' that showed a time after the deadline for submittal of the bids.

"The auditor's report relied solely on the faxed copy and implied that this meant that the bid was faxed and received after the deadline for accepting bids."

But, the memo shows the TDD told the auditor's office it disagreed, saying the problem was "simply the result of incomplete files from something that had occurred in 2007. In accordance with the stated bid requirements, all bids for the project were delivered to the office of the district's engineer in person prior to the deadline for receiving the bids - but the only copy of the bid in the District's files when asked nine years later was the faxed copy."

Additionally, the district's board reported, the bid the audit report questioned was "the lowest and best bid resulting in the most efficient use of the TDD sales tax."

Transportation development districts are created under state law as an economic development tool.

As the auditor's report noted, they are separate political subdivisions established and organized for the construction, operating and/or maintaining of transportation-related projects - and they are allowed to recover their expenses through sales taxes, which are imposed on taxable retail sales within the district boundaries.

The Stone Ridge district charges an extra 1 percent.

In order to be created, a TDD must win approval from the circuit court in the county where it's to be located.

Three districts currently exist in Cole County, although one - the Hazel Hills TDD west of the Missouri 179-Mission Drive interchange near St. Mary's Hospital - hasn't done any development.

The other two involve the Walmart-East development and Stone Ridge - which included improvements to Missouri Boulevard and South Ten Mile Drive, as well as the construction of Stoneridge Parkway, at a cost of $3.106 million.

The Stone Ridge TDD was established in January 2007 and is expected to last through 2027, according to the state auditor's office.

It originally was created by the Farmer Companies and now includes the Kohl's, Menards, Sam's Club, PetSmart, Five Below and Game Stop retail stores and the Buffalo Wild Wings restaurant.

Fitts explained Dick's Sporting Goods was removed from the TDD in 2012 but continues to pay the TDD an amount equal to the sales tax that would have been imposed on sales occurring within its store by private agreement with the TDD.

The district extends from Missouri Boulevard south to West Edgewood and includes quarry land still being worked.

Fitts said the Stone Ridge TDD is supervised by a five-member board of directors, who serve three-year terms and generally meet once a year.

He said the current board members are Bud Farmer and Ed Twehous, whose terms expire Feb. 5; Mike Farmer and Frank Twehous, whose terms expire Feb. 5, 2019; and Kirk Farmer, whose term expires Feb. 5, 2020.

Although Galloway's audit covered all 2015 TDDs in the state at the end of 2015, it focused on 12 districts as being representative of all the districts - including Stone Ridge - and reported all 12 had businesses that violated state law by not notifying their customers of the additional TDD sales tax rate being charged.

The district told the auditor's office it would notify all retailers within the TDD of the requirement.