City councilman struggling to pay property taxes on business - KCTV5

City councilman struggling to pay property taxes on business

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OSAWATOMIE, KS (KCTV) -

A city councilman up for re-election is struggling to pay property taxes on his business.

"We're working our butts off to make this thing successful," Mike Moon said of Moon's Market, the Osawatomie grocery store he co-owns with his wife. "There's a difference between a refusal to pay and an inability to pay."

Moon explained his situation after a tipster contacted KCTV5 about the tax delinquency. Miami County records show the Osawatomie, KS, business owes more than $32,000 in back property taxes and fees. That figure includes 2011 and the first half of 2012. The second half of 2012 is not due until May.

Moon acknowledged that the local and county governments count on that money, but he said he cannot pay it immediately without a detriment to the community he serves. He said a single week's delivery to the grocery store costs tens of thousands of dollars.

"If somehow you made that current," he said of the delinquent taxes, "then you are not going to pay for something else, which might be your next grocery delivery, which might mean that you're out of stock on half your milk and half your meat and what's that going to do for your business?"

A nearby business owner was sympathetic.

"I'm surprised he isn't broke," said Doug Huffman, owner of Doug's Auto Body. "People don't understand what it takes to run a business."

Moon said his store is dealing with the same struggles that many other small town stores are. With few jobs in town, people move or commute to work. Along that commute, they have access to chain stores with lower prices. The problem was aggravated in Osawatomie, he said, when the 2007 flood wiped out homes and sent more people packing.

However, Osawatomie is not the only town where his company owns a grocery store. He opened a store in Humboldt, KS, in 2005 and another in LaCygne, KS, in October.

Moon said those enterprises took no money away from the Osawatomie location nor would he have been any more able to pay his Miami County taxes without them. He said he saw an opportunity in each case to buy a store at a bargain price, with no-money-down financing, that could be more profitable per square foot than the Osawatomie location.

"And if that store became profitable," Moon explained, "it would make our company stronger, making this store stronger for my family and my staff and my community."

He said it's too soon to remark on the success of the LaCygne store but said the Humboldt store has done well. He's current on his taxes there, in Allen County.

"It's profitable but not flush," he said, explaining why he's not been able to use proceeds from that operation to get current on his taxes in Osawatomie.

The story Moon tells involves many setbacks.

He went in on the Osawatomie store with its previous owner in 1992. In 1997, he put a million dollars into expanding the space. Six weeks after that expansion began, Walmart announced they were expanding the nearby Paola location into a Supercenter to include groceries.

"The growth we expected didn't materialize," he said.

The 2007 flood was the next setback.

Things were beginning to look up in 2012. Moon said his January - March sales numbers were up 1 percent from the previous year. In April, a bridge that provided access to town closed for repairs. His figures for that date through August, when the bridge re-opened, were down 8 percent.

He even tried to catch up on the first of two 2011 tax bills this past June, he said, but the check was returned. The taxes are billed in half-year increments, one due in December, the other in May. Once the full year is delinquent, he learned, you can't pay for half the year; you have to pay in full.

"This store is struggling," Moon said. "It has been for years."

He said his struggle should not reflect poorly on his ability to serve on the city council. If anything, he said, it shows his commitment to keeping an essential part of any town, a bonafide grocery store with fresh food.

"I've got a commitment here," Moon said. "I've got my home here. I've got my family here."

Moon does not yet have a clear timetable for getting current on his business' taxes but said he is already exploring financing options.

There are no state or city laws that prevent someone delinquent on taxes from running for or holding office. Moon filed for re-election on Tuesday. His current term expires in April.

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