The Joplin Globe, Joplin, MO

November 26, 2012

Neosho TDD, city lawyers continue effort for resolution

By Roger McKinney

NEOSHO, Mo. — The Neosho Transportation Development District board in a statement has questioned whether the Neosho City Council is negotiating in good faith as lawyers for the two continue efforts to find a resolution to their differences.

The TDD board remains open to a city-controlled Community Improvement District, according to the statement released over the weekend.

Mayor Richard Davidson on Monday said the city is looking at the statement as an opening. Attorneys for the TDD board and the city are in talks in an effort to reach a solution before Friday.

To that end, the Neosho City Council will conduct a special meeting tonight.

A court hearing is scheduled Friday on the city’s legal challenge to the TDD. It alleges that the TDD was formed under the wrong state statute.

The TDD was formally established in 2011, though it was being developed more than a year before that. The TDD statement notes that City Attorney Steve Hays did much of the legal work related to the TDD’s formation. Hays was reimbursed for his work by the TDD after it was established.

Davidson said on that point that Hays was working as a private attorney, and not at the direction of the City Council. He said attorneys for the Missouri Department of Transportation reviewed the documents without realizing the flaws they included.

The TDD in January began collecting a half-cent sales tax within its boundaries. The TDD board has identified nearly $7 million in transportation projects along a retail area of U.S. Highway 60. The TDD would pay $4.5 million of the cost through its sales tax revenue, while MoDOT has pledged $2.4 million toward the projects.

The TDD statement made clear that the board hasn’t been pleased with some city actions.

“The city of Neosho, a few months ago, discovered a flaw in their original filing with the court for the formation of the TDD,” the statement reads in part. “Rather than communicating this finding to the TDD board and jointly working for a legal solution, the city through the city attorney filed a lawsuit with the court requesting the TDD be abolished in spite of its having been declared valid on at least three previous occasions.”

The TDD board also was troubled when the City Council rescinded its cooperative agreement with the TDD board, just as the board thought negotiations were progressing.

“Without prior notification to the TDD, the City Council recently rescinded both its original letter of support for the TDD and, importantly, the authority for execution of the cooperative agreement signed earlier this year by the mayor,” the statement reads, noting that the agreement is a requirement of the cost-share agreement with MoDOT.

“It raises questions about whether the City Council is negotiating in good faith to resolve the issues as directed by the court,” the statement says.

Steve Roark, the most recently elected member of the TDD board, said the board is open to allowing a city-controlled Community Improvement District to replace the TDD, if the city allows the TDD to continue until the CID is established.

“We have to leave the TDD in place” for now, Roark said Friday. “If we destroy the TDD, we destroy the agreement with MoDOT.” He said that would result in the loss of the state money for the projects.

Roark repeated the TDD board’s position that the flaw in the formation of the TDD isn’t fatal, at least for a limited time.

“We want to get those projects done out there that everyone agrees need to be done,” Roark said.

Davidson on Monday said the TDD board so far has demanded that a CID include all of the projects included in the TDD plan, when even the TDD board can’t ensure that the necessary funding will be available for all of its projects.

“All of the projects add to the safety of the area,” Roark said. “MoDOT isn’t going to do one part of the project. They’ve committed to the whole thing.”

Davidson said the city will include all of the projects if it is possible, considering the sales tax revenues.

“It’s not possible to say we will accept it, hands down,” Davidson said. “It’s not quite that simple.”

Davidson and Roark both said they are optimistic about a resolution.

“I think it’s really going to be too bad if we walk into court on Friday and have the judge fix it,” Roark said. “I think we would still love to have some reconciliation. This really doesn’t make Neosho look good.”

TDD view

THE STATEMENT NOTES that the Transportation Development District board, the Missouri Department of Transportation and the TDD’s lender have relied on the validity of the TDD in their agreements. The statement says the TDD can be allowed to continue as a legal entity, despite the flaws in its formation.