Muskogee faces $29.25M judgment, weighing options on taxpayer impact

The City of Muskogee is paying the piper for some awful management decisions nearly twenty years ago. The City is about to be on the hook for over $29,000,000 in judgments on three lawsuits over derelict properties that were condemned and demolished by the city in 2007.

Apparently, multiple mayors and city councils have punted on wrapping these particular cases up, to the point that what was probably "damages" well under a million dollars have now turned into over twenty nine million dollars that Muskogee taxpayers are now somehow going to have to pay. I wonder how much of that sum is interest – and legal fees. 

The impact to Muskogee taxpayers, and property owners in particular, could be extreme. Among the options some have floated include a temporary 25% property tax hike.

Here's a letter explaining the situation from the man with the most unenviable job in town right now, City Manager Kendal Francis:

City Manager Kendal Francis Addresses $29.25 Million in Longstanding Legal Judgments and Potential Taxpayer Impact

September 1, 2026

Dear Citizens of Muskogee,

I want to speak directly with you about a difficult financial issue facing our community. Three inverse condemnation cases against the City of Muskogee, dating back nearly twenty years, have now resulted in judgments totaling $29.25 million, plus any applicable interest.

The history is complicated, but the potential impact on our citizens is very real. You deserve to understand what these cases are, how we reached this point, and what your City Council and City Management are doing about it.

What is inverse condemnation?  The Oklahoma Constitution provides that private property cannot be taken or damaged for public use without just compensation. Inverse condemnation occurs when a property owner claims that government has already taken or damaged property without providing the compensation required by law.

The three cases now facing the City, England v. City of Muskogee, Taff v. City of Muskogee, and Lacey v. City of Muskogee, arose from City actions involving properties that were condemned and demolished under the City's nuisance abatement procedures approximately two decades ago.

The lawsuits were filed in 2007. England filed in January, followed by Lacey and Taff later that year.

How did we get here nearly twenty years later? These cases remained unresolved through multiple City Councils, managers, attorneys, and judges. Over those years, City leaders relied upon the advice of legal counsel in determining how the cases should be defended and handled. Many of the individuals involved when these events originally occurred are no longer associated with the City, and some are no longer living.

The cases began moving toward trial again in 2024 and 2025. Settlement discussions continued into 2026, and on August 24, 2026, the City Council approved agreements resolving the three cases.

The resulting judgments are $6.5 million in Taff, $8.5 million in England, and $14.25 million in Lacey, for a combined principal amount of $29.25 million.

These cases were not created by the current City Council or administration. However, they are now our responsibility to address, and we believe continuing to pass them on to another Council, another administration, or another generation of taxpayers is not an acceptable solution.

What does this mean for taxpayers?  Under Oklahoma law, municipalities have a Sinking Fund that is used to pay certain legally required obligations, including bonds and court judgments. The Oklahoma Constitution and state statutes establish a process for determining the amount necessary to satisfy these obligations and levying property taxes to fund them.

We have been in contact with the Muskogee County Assessor's Office to better understand what this could mean for property owners. If these judgments and interest were fully placed on the Sinking Fund, the increase in property tax millage would be substantial. Based on the information provided to us, the impact would equate to approximately $450 per year in additional property taxes for every $100,000 of property valuation.

It is also important to understand that this would not be an immediate or permanent tax increase. A decision on whether to place these judgments on the Sinking Fund would not need to be made until June 2027. If that ultimately becomes necessary, the resulting increase in property taxes would begin in October 2027 and would remain on the tax rolls for three years. After that three-year period, the additional millage associated with these judgments would come off the tax rolls. This gives the City additional time to thoroughly explore every reasonable alternative to reduce or avoid the impact on Muskogee property owners.

I recognize what that means to a household budget. For many families, $450 represents groceries, utility bills, medicine, school expenses, or other necessities. For residents on fixed incomes, the impact could be even more difficult.

That is why the City Council is exploring every conceivable lawful option to pay these judgments while avoiding, or at least minimizing, the amount that must be placed on the Sinking Fund and passed directly to property owners.

We are examining available City resources, financing alternatives, potential partnerships, payment structures, and other legally permissible options. There is no simple solution to a $29.25 million obligation, and every option comes with consequences. But before asking Muskogee property owners to shoulder this burden, we believe we have a responsibility to exhaust every reasonable alternative.

Where do we go from here? We cannot change decisions that were made nearly twenty years ago, and assigning blame today will not pay these judgments.

What we can do is take responsibility for the problem that is now in front of us.  The City Council and administration will continue working through the available options carefully and transparently. As decisions are made, we will share that information with you because you deserve to understand not only what we are doing, but why we are doing it.

This is a serious challenge for our community, and I will not minimize its potential impact. At the same time, I believe our responsibility is clear: protect our taxpayers as much as possible, meet the City's legal obligations, and bring these nearly twenty-year-old cases to a close.

That is the work now before us, and that is what we intend to do.

Sincerely,

Kendal Francis
City Manager

It's a rotten situation all the way around. How it ever got to this point really astounds me.