NEOSHO, Mo. —
Mayor Richard Davidson said an imminent taxpayer lawsuit against a transportation development district in another jurisdiction has complicated the city’s situation.
After a closed-door session at Tuesday’s Neosho City Council meeting, Davidson released information that the city had been notified of the imminent lawsuit, expected to be filed in the next few weeks.
The information came as the council was considering if it would appeal the November circuit court decision allowing the Neosho Transportation Development District to continue. The city had challenged the formation of the TDD, based on a flaw in the state law related to the districts.
A half-cent sales tax is being collected in the district, a retail area along U.S. Highway 60. That is expected to pay a $4.5 million share of nearly $7 million worth of transportation projects. The Missouri Department of Transportation would pay the remaining $2.4 million.
“It’s muddied the water and made the decision on the appeal less of a concern,” Davidson said Wednesday, referring to the other lawsuit.
He declined to identify the jurisdiction in which the lawsuit is to be filed or to name the attorney who notified the city attorney of the lawsuit.
“We’re now very likely going to be named a defendant in the lawsuit,” Davidson said.
He said the taxpayer lawsuit in the other jurisdiction is likely to challenge the TDD there based on the same flaw that the city of Neosho had cited. He said the city may be asked to defend the formation of the TDD, even though it took the opposite position in the local court challenge.
“This is the worst-case scenario that we were trying to prevent,” Davidson said.
Davidson said the compromise the city presented to the TDD, restructuring it as a community improvement district, would have solved the problem.
He said City Attorney Steven Hays is researching the situation.
“I don’t think we have a good understanding yet of what this taxpayer lawsuit could encompass,” Davidson said.
The city hasn’t yet made a decision on its appeal, with only a few weeks remaining before the deadline.
Ray Stipp, chairman of the TDD board, said Wednesday that he hopes the City Council will decide against appealing the court ruling and will allow the TDD projects to move forward. He said he didn’t know how a lawsuit against a TDD in another jurisdiction might affect the local projects.
The TDD board has retained the Kansas City law firm Gilmore and Bell to explore the possibility of taking legal action against Hays and the law firm the city hired to help with its TDD challenge. The action would involve trying to recover the TDD’s costs.
THE NEOSHO TDD BOARD ELECTION, which had been scheduled for today, will be rescheduled because of an incorrect election date published in a legal advertisement. The agenda for a TDD board meeting scheduled for today states that the board will consider a new election date of 3 p.m. Thursday, April 30, at the Neosho Area Chamber of Commerce office.