Re Taxes ID: 49325

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Steve -

I touched base with our consultant who helped us with the Chapter 353 tax abatement and the Chapter 100 sales tax exemption. Their original estimate had the savings as high as $200,000. They offered to do a review, but I really don't want to pay them for this service. Their comments are listed below.

Could we do a deeper dive to see what is going on, both for the contractors and subcontractors? This would include looking at the Chapter 100 sales tax law to make sure the contractor fulfilled their responsibility.

Maximizing these savings has become a critical issue due to do the cost of the Route 9 improvements, including the new turn lanes in front of the building. As you may recall, the city plans on applying the Chapter 100 savings as part of the match against a 50/50 $400,000 MODOT grant. We were hoping to cover close to half of the match with the Chapter 100 savings. On top of the match, we are responsible for the engineering costs, which came in much higher than expected - $185,000. Instead of a city commitment of about $300,000, we are now facing about $500,000 if our net savings from the Chapter 100 is only about $85,000 (savings minus Chapter 100 costs). Hopefully the city will move forward with the project, but I did receive some pushback from my Finance Committee on Monday evening due to the project cost.

I would appreciate your assistance. Please let me know where we stand with reviewing the Chapter 100 savings by the construction folks.



Baker Tilly comments on sales tax savings.

I've spent a few minutes reviewing the documents you sent. The construction cost list seems incomplete. The estimated construction cost was about $7.5M. About 50-60% should have been taxable to yield around $200K in benefit. The bill of materials you provided comes in significantly less than the $7.5M total construction cost. I suspect that some of the subcontractors bid the project net of tax and used exemption certificates to avoid the sales tax.

We would want to review copies of all the project receipts and bids. Then compile a statement of costs breaking out the taxable and non-taxable transactions. Then we could arrive at an actual sales tax exemption benefit.

From: Steve Foutch
Sent: Wednesday, April 29, 2020 2:12 PM
To: Joe Parente
Subject: FW: TAXES

Attached is the GC's tally on all the MO taxes saved for the Chapter 100 Bond. I don't know what you and Todd thought it would add up to originally, but I get $108,475 by this analysis. I guess we need your approval to push this back to the Bond trustee to finish the process? We will have to submit to the bank on the next draw.


Steve Foutch

Foutch Brothers, LLC

HyVee Arena

1800 Genessee #406

Kansas City, MO 64102


From: Lisa B
Sent: Wednesday, April 29, 2020 1:52 PM
To: Steve Foutch
Subject: TAXES

SEE ATTACHED, let me know if there is anything you need

Your time is greatly appreciated,

Lisa Battagliola

Construction Administrator

107 Main Street

Parkville, MO 64152


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