The Joplin Globe, Joplin, MO

November 26, 2012

Transportation Development District (TDD) statement


news@joplinglobe.com

—  As a means of providing information concerning the issues surrounding the TDD we would like to provide the following chronology of events that have led us to where we are today:

 The TDD was formed in 2011 through efforts of the City of Neosho and in particular, City Attorney Steve Hays. The TDD paid Mr. Hays $30,925.21 directly for his legal work in preparing and filing legal documents necessary for its formation. The TDD also paid the City of Neosho $64,925.37 for its engineering and planning work for formation of the TDD before the TDD came into existence. These expenses were approved and paid after the TDD was fanned in 2011.

 The board of directors of the TDD was elected in April 2011 after the formation of the TDD and was charged with planning, financing, and executing the plan for improvements that would provide for traffic congestion relief and safety improvements within the district accompanied by economic development benefits for the community. The board developed the plan and obtained a $2,400,000 contribution commitment (not a loan) from the Missouri Department of Transportation (MoDOT) under its cost-share program representing over 40 percent of the $6,900,000 project total.

 The TDD began negotiations with the City of Neosho for a cooperative agreement for maintenance of the new roads within the TDD as required by both MoDOT and the lender for the financing of the improvements. Ultimately those negotiations concluded with an agreement signed by both parties detailing the improvements to be made and responsibilities of each of the parties concerning maintenance of those roads among other details.

 The TDD cost-share agreement with MoDOT calls for MoDOT to perform all the engineering, bidding, and oversight of the construction of the new roads. MoDOT performed much of this work and approved a bid from a contractor for the first of the projects to be completed, a new traffic signal at Kodiak Road and Highway 60, originally scheduled to be completed by the end of 2012.

 The City of Neosho, a few months ago, discovered a flaw in their original filing with the court for the formation of the TDD. 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 that the TDD be abolished in spite of it having been declared valid on at least three previous occasions and numerous parties including the TDD board, MoDOT, and the TDD's lending institution having taken actions in reliance on this.

 The TDD board, in response to the suit, retained legal counsel to defend the validity of the district and keep the projects in place with MoDOT including the cost-share contribution of $2.4 million. TDD legal counsel developed several strong legal arguments consistent with a Missouri Supreme Court decision that we believe supports the TDD continuing as a legal entity in spite of the flaws associated with the City of Neosho's original actions to form the District.

 On August 28, 2012, the Court ordered among other things that the TDD and the City of Neosho work together to solve the problem. The TDD board has complied with the Court's order and has offered to cooperate with the City of Neosho in formation of a Community Improvement District (CID) which would replace the existing TDD and would include existing projects previously agreed to and add projects the City wishes to have included. The new CID would be governed by a board appointed entirely by the City of Neosho.

 The TDD board felt progress was being made in these negotiations with City officials so that both the TDD and City of Neosho officials could jointly recommend this solution to the Court as we had been instructed to do. However, 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. One of the requirements of the cost-share agreement with MoDOT and with the TDD's lender is that a valid cooperative agreement exists between the City of Neosho and the TDD to address issues including future maintenance work on the road improvements. The TDD Board is concerned that this unilateral action by the City Council could cause substantial harm to the TDD as well as result in the loss of the $2.4 million cost-share funds from MoDOT. Further, in our opinion, it raises questions about whether the City Council is negotiating in good faith to resolve the issues as directed by the court.

 These events have resulted in the TDD board scrambling to provide assurances to MoDOT and our lender that if the Court rules that the TDD may continue, we will be able to ensure that the City abides by the legal agreements it previously entered into with the TDD.

 The TDD board members believe that there is a very strong legal basis supporting the continuance of the existing TDD which will allow the parties to work together to take all necessary actions to complete the planned road improvements. The Court hearing on this issue is scheduled for November 30th.

 TDD Board

 Frank Adams

 Jeff Maxwell

 Steve Roark

 Gene Schwartz

 Ray Stipp