Jackson wins court battle with county

This time, it's more than an opinion. It's an order.

A circuit court judge has awarded Jackson a huge legal victory over Cape Girardeau County, ordering the county to pay $471,904 for road and bridge funds that the county should have been setting aside since the county obtained first-class status in 1997.

It appears that the county will appeal the ruling to a higher court. County officials will hold a closed session at 11 a.m. today to decide a course of action.

"Well, I'm almost certain we'll appeal that decision," Presiding Commissioner Joe Gambill said. "We felt we had the constitutional right to that money and a statute couldn't take that away. That's why they have higher courts."

The writ of mandamus issued by Associated Circuit Judge Byron Luber of Caruthersville, Mo., was made available to the public Wednesday morning at the circuit clerk's office in Cape Girardeau.

The ruling marked the second legal victory in the city of Jackson's pursuit to receive 25 percent of the road and bridge tax money the county collects from city residents, as laid out in Section 137.556 of the Missouri statutes.

In January 2003, state Attorney General Jay Nixon weighed in on the issue, siding with Jackson. The county commission disputed Nixon's opinion -- sought jointly by the county and the city -- and refused to set aside the funds. Based on research by county Prosecuting Attorney Morley Swingle, the county initially argued that the statute only applied to special taxes that require voter approval. The county didn't believe an account designated for roads and bridges fit the definition of "special."

However, in a court hearing June 29, lawyer William McCullah from Forsyth, Mo., didn't use that argument when representing the county before Judge Luber. Instead, McCullah based the county's case on the legal history of the statute. He asserted that the road and bridge provision only applied to additional taxes not set forth in the state's original constitution.

Given that the constitution gave counties the authority to levy road and bridge taxes many years before Section 137.556 was adopted, McCullah said the section was only applicable if the county adopted an additional road and bridge tax.

Luber didn't agree.

In his eight-page order, Luber states "The court finds that these duties are clearly established by statute," and "The respondents have failed and refused to perform their statutory duties.

"The logical conclusion in this case is that the people established the power to tax in the constitution and the legislature established an enabling statute for the constitutional provision. The taxes collected in the city for the Road and Bridge Fund are divided between the county and the city, as cities have roads and bridges too."

The court order requires that Treasurer Bill Reynolds, cited in the suit along with commissioners Gerald Jones, Larry Bock and Joe Gambill, must create a special road and bridge fund no later than Sept. 15.

Reynolds has all along maintained that, because of the statutes that relate to his job, he couldn't set up the fund and designate money without the commission's approval. In court, he testified he would set up the account if the commission told him to do so.

The $471,904 judgment was a major blow to the county, especially considering an offer it turned down in late May.

The county made an offer to settle out of court. The offer was to begin paying the 25 percent of the road and bridge funds if the city would forgive any back payments.

According to Jackson's closed-meeting records that became available under the Sunshine Law once the pending litigation was resolved, shows that the board of aldermen unanimously voted down that offer.

The board then proposed a counter offer that the county would pay all future road and bridge tax money to the city and that the county pay all back taxes including the 2002 tax year, the year Jackson was made aware of the statute by the Missouri Municipal League.

That would have been a settlement of about $282,000.

Gambill said one of the issues that will likely be challenged is the statute of limitations law, which would only allow Jackson to collect up to five years of payments.

Apparently, Luber agreed with the city's argument that the statute of limitations applies from the time that the money can be collected. That can't happen until the city asks for the funds. The city didn't ask for the funds until 2002.

Jackson officials were thrilled with the ruling.

"I don't know how to respond to it," Jackson Mayor Paul Sander said. "We felt from the start we were on the right side of the law. We felt we owed it to the citizens of Jackson to pursue the money the city was due. I wish it wouldn't have had to come to this, but I'm happy the judge thought we were correct."

Sander said that negotiations with the county are still possible to avoid going through the appeals process.

"We remain open to a settlement," Sander said. "But the ball's in their court now. An offer needs to come from them, not from us."

The ruling would apply to all incorporated towns in the county that are not part of the Cape Special Road District. The special road district includes all of Cape Girardeau and a large portion of land surrounding the city.

This particular case has drawn interest from around the state, particularly in Callaway County, a fairly new first-class county. Callaway County began giving funds to the city of Fulton on the condition that the county be reimbursed if Cape Girardeau County won a court victory.

bmiller@semissourian.com

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