COURTS: JUDGE SAYS CITY LAW INVALID

A circuit court ruling issued Wednesday repealed a Cape Girardeau ordinance because it was too vague in explaining why the city needed to expand and extend collection of a motel and restaurant tax or how the money would be used.

Circuit Judge Robert C. Stillwell of Fredericktown, Mo., based his decision on an "honest title" clause in the city's charter and the state constitution. It is a legal requirement that the title of city ordinances clearly express the subject matter of those ordinances.

The ruling voids collection of the expanded motel-restaurant tax and puts nearly $1 million in annual city tax revenues in limbo.

Businessman Jim Drury filed the lawsuit last year on behalf of his MidAmerica Hotels Corp. Drury contends the city has illegally collected the motel and restaurant tax since 1998 and has paid his taxes under protest since.

He argued the city misled voters when officials said that both a tax measure and a bond issue had to pass for a River Campus project at Southeast Missouri State University to proceed. Voters approved the tax measure, which continued a 3 percent tax on gross motel and hotel receipts and a 1 percent tax on restaurant receipts, but rejected a measure that would allow the city to issue bonds.

The money was to be used for the city's $8.9 million portion of the $36 million project.

When voters rejected the bond issue, the university found a state agency to issue the bonds.

Cape Girardeau Mayor Al Spradling III said Stillwell found the "most nitpicky" item in the lawsuit and ruled on it.

Walter S. Drusch, Drury's attorney, concurred that the judge's ruling amounts to a victory on a technicality.

"But the plans for an atom bomb are a technicality, too," Drusch said, "and it can blow up in your face."

The title's wording is not important, Drusch said, adding: "It is essential in order to have a valid ordinance."

Stillwell ruled in favor of the city on six of the seven counts in the lawsuit and sided with Drury on one count.

The judge postponed enforcement of his ruling until an appeals process is finalized. The city can collect the taxes but has to put the money into an escrow account. The money, nearly $40,000 a month, would have funded remodeling improvements to City Hall and the Convention and Visitors Bureau offices.

City Manager Michael Miller said the city will look at its options, but an appeal is likely. Spradling expects the city to appeal within the 40-day time frame set by the judge.

Drusch said his client will not appeal any part of the judge's ruling. If the city appeals, he expects the Missouri Court of Appeals in St. Louis to hear the case. If Stillwell's order is upheld, the attorney said he expects another election will be necessary.

Staff writer Sam Blackwell contributed to this report.