Muskogee foundation won't pay the city's $29 million court judgment, but approves $10 million in help

MUSKOGEE, Okla. (Oct. 28) — The City of Muskogee Foundation has refused to pay off $29.25 million in court judgments against the city, leaving local leaders to work out how taxpayers will cover the debt.

At a standing-room-only meeting Monday, the foundation's board voted 10-3 against Mayor Ryan Lowe's request for a grant to cover the full amount, Muskogee Local News reported, citing the Muskogee Phoenix. The judgments come from three cases over properties the city condemned and demolished years ago, in which a judge found the owners had not been properly paid, KJRH and News On 6 reported.

On a separate item, the board approved $2 million a year for five years, $10 million in all. The foundation said the money goes to eligible expenses through the city's industrial development fund, freeing up franchise fee revenue the city can put toward its obligations.

Lowe, who sits on the foundation board, said afterward he was "baffled" and "angry," KJRH reported. Board members who voted no cited legal risk and the foundation's long-term finances, according to Muskogee Local News. The foundation has about $170 million invested, News On 6 reported. Executive Director Kari Blakley said in a statement that the grant addresses an immediate need while preserving the foundation's ability to support Muskogee for generations.

City Manager Kendal Francis said interest on the judgments is growing by more than $7,000 a day, Muskogee Local News reported, citing News On 6. He plans to give the council options that could include a property tax increase or a sales tax increase, which would need voter approval at an election next year.

The uncertainty has already spread. Muskogee Public Schools paused plans for a possible bond issue while it waits to see how the city handles the debt, KJRH reported. The city is expected to take up the question again in early November.