Missouri landowners face steep tax increases after 118 years without reassessment

What happens when you go more than a century without re-assessing property taxes?

The landowners in Drainage District 7 found out this December. It includes steeply increased bills, some by more than 500,000%, others by as little as 9%.

Union Pacific Railroad went from paying $4.25 in 2023 to owing $23,777.77 in 2024.

Eagle Investment Corporation, a company that owns multiple properties in the Poplar Bluff Industrial Park, similarly saw an increase from $247.59 to $16,054.57. The Missouri Department of Transportation went from paying no taxes to the drainage district to receiving a bill for $32,976.84.

The City of Poplar Bluff and the Butler County Commission also went from zero to $4,808.77 and $14,011.81.

Agricultural properties saw an average increase of 9-14%.

Residential landowners were not spared either with large swaths seeing a heavier tax bill by a factor of 10 over 2023. The sum total of all the tax assessments shows a $292,344.27 increase across all taxpayers in Drainage District 7.

The total assessments were $407,293.92 and $699,638.19 for 2023 and 2024 respectively, a 71.78% hike. The current board members of Drainage District 7 are Bob Walls, Andy Clark, Rusty Eaker, Glendon Stacy Jr. and Virgil Wagner.

How DD7 arrived at the numbers

According to the district’s attorney, Chris Yarbro, the re-assessment of benefits for the landowners is long overdue. He stated the last time the drainage district conducted an assessment was 1906.

When asked why a re-assessment had not been conducted at any point in the last 118 years, DD7 board member Andy Clark said, “I can’t tell you that. I don’t know. But we needed to do it.”

Looking through the minutes of the board, both he and Yarbro could not find an answer. However, Clark emphasized the growing need for revenue.

Yarbro echoed this sentiment and added, “The district’s large ditches, that drain the entire district and provide stormwater runoff for the City of Poplar Bluff, have also sustained significant wear and tear...”

With increased maintenance costs and the intention to bring the century old DD7 levee up to U.S. Army Corps of Engineers standards, the district hired the law firm of Kennedy Robbins Yarbro and Henson to file a petition with the Butler County Court to re-assess the tax regimen in 2018.

Yarbro stated the district also brought in the law firm of Husch Blackwell in St. Louis to represent them for the re-assessment.

The Blackwell firm has been at the center of controversy and lawsuits surrounding levee districts’ sharp tax increases across the state of Missouri, including the Howard Bend Levee District in Maryland Heights and the Bois Brule Levee District in Perry County.

The DD7 petition was formally filed in March 2023. The petition appeared before Judge Michael Pritchett, who granted the district the ability to conduct a readjustment of the assessment of benefits the next September.

In accordance with Revised Missouri Statute Section 242.500, three commissioners were appointed to conduct the re-assessment process. The court named Randy Stricker, Brock Littles and Wallace Duncan as commissioners.

The guidelines for the re-assessment are laid out in Section 242.260. The statute does not describe specific methods for the commissioners to use, only that they, “shall proceed to view the premises and determine the value of all land and other property...”

The trio held their first meeting in October 2023. They submitted their findings to the court on March 14, 2024.

According to Greater Poplar Bluff Area Chamber of Commerce President Steve Halter, the actual assessment process on 400 of the 2,225 line item properties in the district was conducted in only four days.

Yarbro clarified the re-assessment was based on property value but also the amount of benefit a property receives from the drainage infrastructure.

Independently of the commission for the re-assessment of benefits, the drainage district reworked the allotted proportion of tax burdens. Yarbro noted the proportional load had also not been updated since 1906.

In the old regimen, agricultural properties shouldered 97% of the DD7 tax. The new proportions are as follows: 11.57% for residential landowners, 15.08% for commercial properties, 16.04% for roads, railroads, and utilities, and 57.32% for agricultural land.

The increased valuations from re-assessment, the new proportional regimen, and the greater DD7 budgetary load created a perfect storm for the precipitous increases in taxes. According to Halter, the three commissioners were surprised at the scale of the hike. None of the commissioners responded for comment by press time.

Looking at the drainage district’s financial statements, however, yields a view of a dire financial situation. While taking in just over $400,000 in revenue in both 2023 and 2024, the district saw a total operating cost of $729,628.81 and $566,973.96 for the two years.

DD7 operated at a sum loss of $444,116.96 in that time frame. The largest line item in 2023 was operating costs at $700,757.17, though the number dropped to $387,745.07 the following year. Notably, the 2024 expenses saw $116,282.79 in professional services. Clark said this is the cost of legal representation.

He explained the swing in operating expenses resulted from a levee break and different maintenance items coming due.

Community response

The district held a public meeting at their lawyer’s office Monday morning with business and property owners to discuss the rise in tax burden.

“What people went from to what they’re at now was staggering,” Halter emphasized.

He added the three commissioners were, “blown away,” by some of the numbers built from their assessment.

While uneasy about the tax increase, he stated his desire to see the drainage district receive more money to do its job. Landlord Greg West went so far as to say his bill of $700 for his properties in the district is well worth the price of keeping the houses from flooding.

Halter hoped to see an amicable resolution to the conflict without resorting to legal action. He added attorney Michael Tolles has been involved in cases similar to the situation in Butler County all across the state.

“I think that there’s people in the room that are willing to be involved in some kind of a lawsuit if necessary,” Halter asserted.

David Libla of Eagle Investments said, “It’s a pretty heavy hit for all of us… It’s difficult to swallow.”

As a landowner in the industrial park, he warned the already struggling companies there could choose to leave over the tax increase.

“The industrial park has lost a lot of industry over the last several years,” Libla added.

Halter brought up the example of Nortek Global HVAC, which was recently acquired by Rheem, a national conglomerate. He cautioned the corporation could choose to leave Poplar Bluff over Nortek’s increase from $128 to $27,185.

Bob Sutton of Sutton Real Estate and Loans said the raise in taxes is being conducted too quickly.

“I think you’re going to have to go with something that slows this process down. It’s just an extreme increase,” he elaborated.

Sutton went on to question the method by which the increases were calculated and felt it was poorly defined. Yarbro and board member Rusty Eaker recounted the process of the three commissioners determining the assessed benefits.

Drainage District Action

Randy Persons of RL Persons Construction suggested taking the tax burden and spreading the increase evenly over the course of five years.

“We want our levees to be strong and our ditches to be clean,” Halter said, reiterating his opinion that the drainage district needs an increase in revenue.

He added his support to Persons’ plan of spreading the increase over five years.

“Nobody wants to take it to court,” Halter repeated but added, “We have backup plans.”

Libla asked how the district has been able to manage on the existing revenue for so long. Eaker responded they have been struggling to meet the needs of the district for years.

With 99 miles of ditches across 80,000 acres to mow, clean, and maintain in addition to the levee, the $407,000 in revenue spreads thin to just a little over $4,000 per mile of ditches alone. As maintenance costs mount in tandem with the desire to upgrade the DD7 levee to USACE standards, Eaker said more money is needed.

He added, once the levee is up to the Corps’ requirements, they will take ownership and maintenance of the levee from the district, substantially decreasing costs.

However, Persons and Libla expressed pessimism over this being completed quickly.

“I don’t think you’re going to get enough taxes to build up that levee,” Persons speculated.

Libla estimated his taxes would never go back down.

Eaker, Clark and Yarbro stated they have applied for grants with the assistance of the Ozark Foothills Regional Planning Commission but with little success.

“All we want is a fair distribution of the tax,” Libla stated. “What we see right now is not exactly fair.”

Eaker said the board could not act immediately but would instead need to confer amongst themselves and with legal counsel.

“We can’t do something right here, right now,” he affirmed.

The MoDOT representative present said the state agency has had to deal with similar levee district issues in the past. In those cases, MoDOT was able to negotiate a lower tax burden with the districts by presenting their own assessment of their benefit from the flood protection.

“We’ve dealt with this all across the state,” he said.

The MoDOT employee cautioned against a legal battle due to the length of time and costs involved. Halter stated he hoped a similar negotiation could occur in the district with the affected businesses and landowners with large tax increases.

Persons said he was ok with paying the present bill but advocated for some kind of resolution in the future. Libla maintained his objection to paying the current tax.

With the deadline to pay the tax looming on Dec. 31, Halter warned that some kind of modification would need to be effected quickly. The drainage district has waved late fees on their tax, but Halter said this can be rescinded at a later date.

Eaker said the spreading of raises across several years could be an option, but the $699,000 represents the present needs of the drainage district. He said that number could fluctuate in the future, nullifying any arrangement.

Clark said he is not against the five-year plan, but recounted the growing financial needs of the district.

“If we do that for y’all, where is the other $300 (thousand) going to come from?” he objected.

While attendees came to no firm resolution at the meeting, the drainage district board committed to workshopping the feasibility and legality of adjusting the tax burden. Eaker said he could not provide a date when action would be taken. The district will meet with legal counsel on Thursday, Dec. 19. Their next board meeting will be Jan. 14.

In the meantime, the bills will still come due at the end of the year.