Danville School District has come to an agreement with Wausau Paper for a payment plan to reimburse the company what it had overpaid in property taxes in 2014, ’15 and ’16 — for a total of $424,600.

Superintendent Tammy McDonald told the board during its working session Monday night that the district still owes $334,712.49 in overpaid property taxes to Wausau. The district had already refunded the 2014 taxes in full for the amount of $137,094.65.

The company’s attorneys agreed to allow the school district make six equal payments over three years to repay the balance, she said. Payments will be about $55,785, and due on Jan. 15 and July 15. The debt will be repaid in full in July 2022, McDonald said.

The school district was required by law to refund the overpaid taxes because Wausau had wrongly classified its inventory as tangible property and paid taxes on it. Because the inventory turns over quickly — about every six months — it’s not considered taxable property.

Board Chair Steve Becker said Wausau didn’t discover the mistake and demand to be paid back. “It was approved in Frankfort. We had no choice, no say, no anything.”

Board member Lori Finke said Mercer County School District had to repay what Wausau had paid to it, too. She said Kentucky is only one of eight states that has property taxes on inventories, but the confusion came because Wausau’s inventory turns over so quickly that the state doesn’t count it as inventory.

Finke kiddingly asked McDonald, “Could you talk them into a nice charitable donation for a nonprofit” or offer to name something in honor of Wausau?

“We actually asked them about that and they didn’t get that worked out,” McDonald replied.

Once the school district receives the memorandum of understanding, “and has it in writing, this is it. When we get this paid back, we’re good.”

Becker said he appreciated McDonald negotiating the terms over three years. “It could have been much worse. They could have demanded everything up front.”