Dardenne Prairie budget sessions prompt interest in tax recovery proposal

Like nearly every family, organization and governmental jurisdiction these days, everyone is trying to do more with less and thinking outside the box is encouraged.

With looming projected revenues looking flat in 2010, a proposal from a constituent has Dardenne Prairie Mayor Pam Fogarty and the Board of Aldermen all ears.

Patrick Nasi, of Development Dynamics, suggested City Hall contract with his company to search for opportunities to recover tax revenue that may have been inadvertently paid to other jurisdictions.

A prime example would be when a personal property sales tax payment is made at the Department of Motor Vehicles (DMV) the sales tax is credited to the wrong jurisdiction. It isn’t an unusual occurrence because each jurisdiction is assigned a code. A clerk at the DMV fills in the address of the taxpayer and the code is automatically assigned according to the individual’s address.

While a number of residents actually live within the Dardenne Prairie city limits, because they post office gives them an O’Fallon address, the computer automatically designates that sales tax payment to the city of O’Fallon when it is actually due to the city of Dardenne Prairie, Nasi said.

He said that same scenario could extend to some real property taxes.

Fogarty has begun to wonder if that couldn’t occur with telecommunications companies as well.

 “There are a surprising number of people who actually live in Dardenne Prairie but because of the post office they have an O’Fallon address,” Fogarty said.

To the question of how much he thought could be recovered, Nasi said. “We just won’t know until we get into it.”

Nasi presented his proposal as a win/win for the city. “If we don’t recover any revenue, we don’t get paid,” he said, suggesting Development Dynamics only be compensated a percentage of what is actually recovered.

That percentage rate is what will need to be negotiated.

But, the idea was inspired by the city of Weldon Spring who, Nasi said conducted a tax recovery audit in 2008.

“They recovered almost $30,000,” Nasi said, which got the board’s attention after having reviewed a dreary projection of revenue and expenses for 2010.

According to Weldon Spring City Administrator Michael Padella, Nasi’s estimation of recovered tax revenue is accurate.

“We started a program similar to what Patrick Nasi is proposing – not exactly the same – at the end of 2007 and collected the revenue in November of 2008 of about $30,000.”

While he would like to take the credit for having had the innovative idea in the first place, Padella said it was actually a repeat of an audit Weldon Spring City Hall conducted at the behest of former City Administrator Jack Strick.

“Jack had one done in 2002 and that worked out well,” Padella said. Following Strick’s example, Weldon Spring began working with area DMVs, coordinating through the Missouri Department of Revenue.

Because it had been about five years since the last audit, Padella said the city “saw a pretty good windfall – it spanned multiple years.”

Padella said since that success, other jurisdictions have contacted Weldon Spring City Hall to find out more about the tax recovery program.

“It’s a lot of work; it does take additional resources,” Padella said. “But, in times of tight budgets, you’ve got to get creative.”

Should the Dardenne Prairie Board of Aldermen elect to proceed with a contract with Development Dynamics, an ordinance will have to be passed giving the mayor the authority to negotiate the details – likely to come up as early as January.