DISPUTE OVER TAX SETTLED

A long-standing dispute between various Drury companies over the city's motel and restaurant tax was settled Wednesday at the Cape Girardeau City Council meeting.

At the meeting, the council disclosed that the companies that had contested the legality of the tax agreed to drop their lawsuit. They have done so in conjunction with the development of a $4 million project that will expand parks and recreation facilities in Shawnee Park and at the corner of Mt. Auburn Road and Kingshighway.

The plaintiffs in the lawsuit, which since late 1984 had paid their hotel and restaurant taxes under protest, include James and Robert Drury, Mid-America Hotels Corp., West Park Bowling Lanes, DWS Restaurants, and Burger Lane Restaurants.

After the meeting, City Manager J. Ronald Fischer said the lawsuit settlement was a "positive step" for Cape Girardeau.

"This means that we've got a recreation project that not only the city believes in, but that the people involved in the lawsuit think is a worthwhile project," Fischer said. "It's a major endorsement of this proposal."

The project includes construction of softball and soccer fields at Shawnee Park; acquisition of land at Mount Auburn and Kingshighway for development as a "general-use community park;" construction of a 32,000-square-foot, multi-use building on the site; and completion of a fitness trail through Arena Park and the new park site.

The project will be funded by bonding excess tourism funds, which are financed by the quarter-cent tax on motel and restaurant receipts.

Less than a year after the tax was approved in 1984, Mid-America Hotels and the other Drury companies began to pay their taxes under protest.

The Drury brothers filed several lawsuits against the city claiming the motel and restaurant tax violates the city's charter form of government. In 1985 the Drurys won their case in the Circuit Court in Cape Girardeau County, but the decision was overturned the following year by the Missouri Supreme Court.

Since then city officials and the businessmen involved in the dispute have continued to try to iron out their differences.

But it wasn't until the council approved the parks and recreation proposal that the Drurys and city agreed to end the dispute.

Fischer said the amount of taxes paid under protest totaled about $30,000 annually. To date, about $130,000 has been held in escrow, which translates into $300,000 in bonding capability to finance the parks and recreation project.

The city manager said that the only way the city could have financed the project was if the lawsuit was dropped and the funds released from escrow.

In a related matter Wednesday, the council approved a financing plan to generate $3.73 million for the project.

Local banks in Cape Girardeau agreed to share in the financing by purchasing "certificates of participation" at a lower rate of interest than the city would have paid on the open bond market.

Those banks participating in the transactions include Capital, Boatmen's, Mercantile, Commerce, First National, AmeriFirst and Southeast Missouri.

Part of the $4 million project will be funded through donations to the city's Parks Development Foundation. City officials initially expected to issue bonds for about $3.5 million.

But by securing local financing, an additional $230,000 will be generated by bonding the excess tourism funds.

The closing of the transactions is scheduled for mid-March, and city staff members now are soliciting proposals from architects and engineers for the project's design work.

In other business, the council refused to act on an extension of the city's landfill agreement with Lemons Landfill in Dexter after another landfill asked that the council bid out the contract.

Lemons Landfill had agreed to extend the city's contract, which expires in December, for another five years at higher "tipping fee" rates.

Doug Leslie, the city's public works director, recommended the council approve the extension, which he called "fair" in light of expected cost increases associated with new federal landfill regulations.

The city now pays $11.50 per ton of trash dumped at the Dexter landfill. Those rates would increase to $12.50 next year and an additional 50 cents per ton annually through 1998.

Although the $12.50 rate is lower than other area landfills, representatives of Continental Waste Industries of Three Oaks, Mich., asked that the council bid out the service.

Ted Yates, a local attorney representing Continental's landfill operation in Jackson County, Ill., said the company was under the impression that the contract would be up for bid at the end of the year.

But rather than agree to bid out the landfill contract, the council took no action on the issue.

Councilman Mary Wulfers said she thought the council was "thrown a curve ball" by Continental's request. "I have not decided which is best," she said. "I would feel comfortable perhaps bringing this up at our next meeting."

The council also tabled the request of the Colonial Cape Girardeau Foundation Task Force for money to study the costs of renovating St. Vincent's Seminary.