Early this spring, front lawns in Hallsville, a community of around 2,000 people northeast of Columbia, were adorned with handcrafted purple and gold Yes on Prop 2 signs.
In order to pay for a new primary school, more parking for the expanding high school, and more school security, the Hallsville School District requested a $6.5 million bond issue. Additionally, the district began pre-construction and design work after the initiative was approved by nearly 75% of voters on April 8.
However, the project was put on hold on the afternoon of June 6 after Superintendent Tyler Walker discovered that the district had failed to provide adequate public notice prior to the election. As a result, their bond counsel, Gilmore & Bell, was unable to submit the bond issue to the Missouri State Auditor’s Office for certification.
Walker told The Independent that although the school district and the youngsters we teach are regrettably being penalized, this was not their fault.
Although Hallsville is the only school district to publicly admit problems with its bond package, up to ten political subdivisions may be compelled to invalidate the April election results.
In an email sent to the auditor’s office on June 3, Mark Grimm, an attorney with Gilmore & Bell, stated that eight to ten of his firm’s clients might have to reintroduce voter-approved bonds to the ballot because they seem to have violated the state law that outlines the requirements for public notice in the lead-up to an election.
Local newspapers must publish notice of a bond issue twice: first two weeks before the election and again one week after it. Notice was sent out three and two weeks prior to the election in each case, according to Grimm.
It’s unclear exactly which bond metrics are at risk. The auditor’s office, which is required to attest that local bond measures adhere to state law, was not given a list, and the business was unable to comment on specifics of its clients.
Auditor Scott Fitzpatrick stated that the state legislation is unambiguous in an interview with The Independent. Fitzpatrick stated that disqualifying a legislation that was approved by the electorate was the last thing he wanted to do, but he is powerless to do so because to the strict and unbending standards for public notice.
“We cannot knowingly certify that the bonds comply with all the laws if we are aware of the deficiency,” he stated.
Shell Knob Republican Fitzpatrick admitted that similar problems with public notification have been overlooked over the years. Indeed, identical issues were found in the certification of a $8.5 million bond proposal for the Centralia R-VI School District, which is Hallsville’s northeast neighbor.
Before submitting papers for certification, Fitzpatrick said the agency has traditionally relied on bond attorneys like Gilmore & Bell to make sure their clients are in accordance with state rules. Although his team makes sure that publications happen, we did not constantly monitor the publication dates as part of our procedure.
“Because this is a sporadic thing, there’s a level of trust that has historically been built into this process,” he said. It’s not like we have a group of individuals that spend their entire day reviewing these bonds and verifying all the laws.
Gilmore & Bell’s general attorney, Bill Burns, disagrees with the auditor’s stance. He thinks Fitzpatrick has sufficient latitude under Missouri law to certify bonds that voters have approved, even in the face of minor publication notice issues that have no bearing on the election’s outcome.
However, Fitzpatrick stated that the legal firm ought to have been alert for such difficulties following a dispute in February involving the Higbee Fire Protection District, another client of Gilmore & Bell, which led to the denial of certification for a bond measure due to comparable flaws.
He remarked, “I’m shocked that we’re dealing with this now.” Going forward, I anticipate that bond counsel will take the initiative and get in touch with the county clerk on these transactions to ensure that the publication dates are appropriate. However, I would have also assumed that after the February agreement.
Randolph County voters passed $1.6 million in bonds to assist the Higbee Fire Protection District during two elections last year. The remaining bonds had to be passed in November because the county clerk misprinted the total on the August ballot, even though it was only meant to require one election.
By February, the auditor’s office’s certification was the only requirement left for the bonds to be issued.
And that’s where things took a turn for the worst.
A copy of the sample ballot that was printed in the newspaper before the election was repeatedly requested by Fitzpatrick’s staff. Instead, the district’s lawyer, Erick Creach of Gilmore & Bell, supplied documents confirming that a sample ballot was published by the county clerk.
The sample ballot was never publicized as required by law, which is why Creach was unable to distribute a copy.
In a February 26 email that The Independent was able to receive through Missouri’s Sunshine Law, Erick wrote to Leslie Korte, chief counsel for the auditor’s office, “I called first thing this morning.” He acknowledged that, in spite of their earlier claims and the clerk’s certification, they had not actually published the notice as required. for every election. In essence, he wanted us to overlook that.
Korte noted that she told Creach that a bond that we know violates state law cannot be certified by the auditor.
She said, “I also addressed the secondary issue, which is Gilmore & Bell sending us documents certifying to facts that are not true and him providing us documents yesterday afternoon saying they are not.” I informed him that moving ahead, every bond package we receive from them will be closely examined, and our office will take more serious action if something similar occurs.
Creach responded later that day reiterating that sharing the affidavits wasn t an attempt to fool anyone but rather to keep your office updated as I was piecing together the information, which to your point should have been addressed prior to submission of the transcript in the first place.
Creach said that in order to make sure this doesn’t happen again, the firm will hold an internal call today to talk about best processes for submitting transcripts and reviewing paperwork.
In an interview this week, Fitzpatrick stated that Gilmore & Bell sort of meant to deceive us on that one, and since there was no publication, we were unable to certify those bonds.
Due to insufficient public notice, the auditor’s office declined to certify bonds for the Linn County Brookfield R-III School District in May.
Though the school district was not a Gilmore & Bell client, the firm took note and decided it would submit certain hypothetical fact situations to the auditor in the hopes of clarifying what could disqualify a bond measure, said Burns, the firm s general counsel.
Publication three and two weeks prior to the election was one of the hypotheticals that the firm provided. Under those conditions, the auditor’s office confirmed that it would not certify.
Grim replied that, for the political subdivisions we serve, we anticipate eight to ten bond elections in April. The election authority met with all publication criteria, with the exception that the publications barely missed the two-week/one-week limit.
One of those was Hallsville.
While we definitely agree that good public policy is to ensure compliance with election laws, Grimm wrote, failing to register bonds due to election law technicalities has the result of effectively annulling an election.
He requested the auditor s office consider certifying bonds regardless of the public notice issue, with the understanding that going forward, no such grace will be provided. And he noted the auditor s office had just certified a bond for one of the firm s other clients, Centralia, that had the exact same deficiencies.
Korte responded in a June 4 email that for Centralia, the auditor s office relied on the representation of bond counsel that the bonds complied with all state laws, including state law that dictates when those publications must take place.
Given the number of state laws that exist to cover the issuance of bonds, Korte wrote, it would not be surprising if over the years a bond was certified despite having an unknown or undisclosed legal defect.
That should never be taken as a tacit approval of any failure to comply with state law, she wrote. If anything, it should be used by bond counsel as a cautionary tale causing them to double down on their efforts to ensure they are monitoring their clients bonds and advising on how to issue bonds in full compliance.
Boone County Clerk Brianna Lennon, who oversees elections including publishing notices, told The Independent that her office intentionally chose to publish sample ballots three and two weeks before the election.
We have tried, especially this past time, to make sure that we have some (safeguard), she said. So if there is a mistake that s made in one of the weekly papers, we still have a grace period to be able to publish.
A changing newspaper industry has made it harder to publish sample ballots. After a local paper was bought by a large corporation, Lennon s office struggled to get edits made of notices and receive proofs prior to printing.
Lennon didn t think her notice strategy would run into statutory issues, since the heart of the law is to ensure voters are informed. Her office goes beyond the law s requirements and sends sample ballots in the mail to voters and posts them online in advance of all elections.
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Hallsville plans on resubmitting the bond issue for November s election, which Walker estimates will cost the district between $10,000 and $20,000. Until the issue is funded and approved by the state, no payment is due to Gilmore & Bell.
The cost of delaying construction isn t quantifiable, he said, and will cause significant planning issues for the district, with improvements critically needed.
The safety and education of our students is of utmost importance to all of us in Hallsville, he said.
Walker felt he had no reason to doubt the district s bond counsel, since Hallsville previously passed three bond issues with Gilmore & Bell s assistance, and he knew the firm s reputation as one of the best.
Districts rely on bond counsel because the process to pass a bond issue and finance a successful issue is a complicated one, he said. It requires the assistance of a bond counsel to navigate the legal and financial complexities that are involved in the process from start to finish.
Fitzpatrick said his office will begin requiring bond counsel to sign an affidavit when submitting paperwork for certification of a bond measure basically saying that, to the best of their knowledge, all laws have been complied with.
State lawmakers have also reached out to him, Fitzpatrick said, with interest in changing the public notice law when the legislature reconvenes in January. Burns said his firm agrees that the law needs to be adjusted.
The main thing I think that really needs to be changed is becoming more lenient with the date of the publication, Fitzpatrick said, adding: There s a lot of kind of antiquated aspects of it.
