CLAY COUNTY AUDITOR'S REPORT ON

                                                                     DEAD

                                               BIRMINGHAM DRAINAGE DISTRICT
I will publish it Wednesday  5/11/5.


Vic Hurlbert, CPA

Clay County Auditor

[email protected]

816-792-7639



                                                                                                                   May 9, 2005
To the County Collector
Clay County, Missouri

We have audited the Clay County Collector’s office as it pertains to maintenance tax bills for
the Birmingham Drainage District (BDD) for the years 2004 and 2005.  The collection of the
Birmingham Drainage District maintenance tax is the responsibility of the Clay County
Collector.  Our responsibility is to express an opinion on the maintenance tax bills for the
Birmingham Drainage District (BDD) for the years 2004 and 2005.

We conducted our audit in accordance with standards generally accepted in the United States
of America and the standards issued by the Comptroller General of the United States.  Those
standards require that we plan and perform the audit to obtain reasonable assurance whether
maintenance tax bills for the Birmingham Drainage District (BDD) for the years 2004 and 2005
are free of material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures on the maintenance tax bills.  An audit also includes
assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the maintenance tax bills referred to above present fairly, in all material
respects, the amounts collected by the Clay County Collector for the Birmingham Drainage
District for the years 2004 and 2005 in conformity with accounting principles generally
accepted in the United States of America.

County Auditor Statute

In conducting the audit of the maintenance tax bills of the Birmingham Drainage District
collected by the Clay County Collector, we used the below statute as a foundation to be able to
do the audit.

    Duties (second class and certain first class counties).
    55.160. The auditor of each county of the first class not having a charter form of government and of each county of
    the second class shall keep an inventory of all county property under the control and management of the various
    officers and departments and shall annually take an inventory of such property at an original value of two hundred fifty
    dollars or more showing the amount, location and estimated value thereof. He shall keep accounts of all
    appropriations and expenditures made by the county commission, and no warrant shall be drawn or obligation
    incurred without his certification that an unencumbered balance, sufficient to pay the same, remain in the
    appropriate account or in the anticipated revenue fund against which such warrant or obligation is to be charged. He
    shall audit the accounts of all officers of the county annually or upon their retirement from office. The auditor shall
    audit, examine and adjust all accounts, demands, and claims of every kind and character presented for payment
    against the county, and shall in his discretion approve to the county commission of the county all lawful, true, just and
    legal accounts, demands and claims of every kind and character payable out of the county revenue or out of any
    county funds before the same shall be allowed and a warrant issued therefore by the commission. Whenever the
    auditor thinks it necessary to the proper examination of any account, demand or claim, he may examine the parties,
    witnesses, and others on oath or affirmation touching any matter or circumstance in the examination of such account,
    demand or claim before he allows same. The auditor shall not be personally liable for any cost for any proceeding
    instituted against him in his official capacity. The auditor shall keep a correct account between the county and all
    county and township officers, and shall examine all records and settlements made by them for and with the county
    commission or with each other, and the auditor shall, whenever he desires, have access to all books, county records or
    papers kept by any county or township officer or road overseer. The auditor shall, during the first four days of each
    month, strike a balance in the case of each county and township officer, showing the amount of money collected by
    each, the amount of money due from each to the county, and the amount of money due from any source whatever to
    such office, and the auditor shall include in such balance any fees that have been returned to the county commission
    or to the auditor as unpaid and which since having been returned have been collected.
    (L. 1945 p. 1406 § 13881a, A.L. 1973 H.B. 678, A.L. 1995 H.B. 559)

Background
Missouri Revised statute 242.020 reads as follows, 1. The owners of a majority of the acreage
in any contiguous body of swamp, wet or overflowed lands, or lands subject to overflow, situate
in one or more counties in this state, may form a drainage district for the purpose of having
such lands and other property reclaimed and protected from the effects of water, for sanitary
or agricultural purposes, or when the same may be conducive to the public health,
convenience or welfare, or of public utility or benefit, by drainage or otherwise, and for that
purpose they may make and sign articles of association, in which shall be stated: The name of
the district, and the number of years the same is to continue; the boundary lines of the
proposed drainage district; the names of the owners of lands or other property in said district,
together with a description of the lands and other property owned by each; when the name of
the owner of any of said lands or other property is unknown, this fact shall be set out in said
articles; said articles shall further state that the owners of real estate and other property within
said district whose names are subscribed to said articles are willing to and do obligate
themselves to pay the tax or taxes which may be assessed against their respective lands or
other property to pay the expense of organizing and of making and maintaining the
improvements that may be necessary to effect the reclamation of said lands and other
property, so formed into a drainage district, and to drain and to protect the same from the
effects of water, and said articles of association shall contain a prayer, praying that the lands
and other property described therein be declared a drainage district under the provisions of
sections 242.010 to 242.690.

2. After said articles of association and petition have been so signed the same shall be filed in
the office of the circuit clerk of the county in which such lands and other property are situate;
or, if such lands and other property be composed of tracts or parcels situate in two or more
different counties then in the office of the clerk of the circuit court of the county in which there
are situate more of said lands and other property than in any other county.

(RSMo 1939 § 12324)
Prior revisions: 1929 § 10743; 1919 § 4378; 1909 § 5496
(1953) Where articles of association did not describe easement owned by corporation and named its owner and notice
described only servient land through which easement ran, assessment of benefits against easement held improper. Farmers
Drainage Dist. v. Sinclair Refining Co. (Mo.), 255 S.W.2d 745.
Property Tax Levies versus Maintenance Tax

State law requires the Missouri State Auditor to annually review and certify ad valorem taxes to
each county who monitors and lists all ad valorem taxes for all districts in that county.  The
County Clerk in each county in Missouri receives all ad valorem (property tax) levy information
from taxing districts in the county.  The Clerk prepares a report and sends the report of taxing
districts with their levies to the State Auditor.

The Birmingham Drainage District is funded through a maintenance tax, and thus, in our
opinion, is not required to have their tax certified by the State Auditor

Audit Procedures and Findings

The Clay County Auditor made several inquiries and reviewed data from the below sources of
information.

County Collector’s office,
Clay County Circuit Clerk,
Reviewed data supplied by a taxpayer and
Requested information from the State Auditor.

Clay County Auditor Findings

The following represents findings noted in the audit.

Clay County Collectors office

Finding #1 - It is our opinion that the Collector must comply with Missouri Revised
Statute 242.490 - Levy of maintenance tax--procedure.

242.490. 1. To maintain and preserve the ditches, drains, levees or other improvements made
pursuant to sections 242.010 to 242.690 and to strengthen, repair and restore the same,
when needed, and for the purpose of defraying the current expenses of the district, the board
of supervisors may, upon the completion of such improvements and on or before the first day
of September in each year thereafter, levy a tax upon each tract or parcel of land and upon
corporate property within the district to be known as a "
maintenance tax". The maintenance tax
shall be apportioned upon the basis of the net assessments of benefits accruing for original
construction or subsequently adjusted reassessments, shall not exceed twenty percent thereof
in any one year and shall be certified to the collector of the revenue of each county in which
lands of the district are situated in the same book in like manner and at the same time as the
annual installment tax is certified, but in a separate column, under the heading "maintenance
tax".

2. The
collector shall demand and collect the maintenance tax and make return thereof and
shall receive the same compensation therefore and be liable for the same penalties for failure
or neglect so to do as is provided in this section for the annual installment tax, except that after
all annual installments of the total tax have become due, and thereafter it is only desired and
necessary to levy and collect such maintenance tax, the board of supervisors of such drainage
districts may, by resolution, provide that in the tax books containing the maintenance tax, it
shall be sufficient if the several governmental lots, forty-acre tracts or other subdivisions of
land as they appear in the decree of the circuit court organizing the district, be conveniently
combined and described together, if contiguous, according to each ownership, and the names
of the owners thereof as they may appear in the deed records, may be used in such tax book,
and the certificate thereof, as provided by section 242.460 may conform thereto. The amount
of the maintenance tax levied against such combined tracts shall be the same as the
aggregate of the tax if levied against each separate tract and errors in the combined
descriptions of such lands or in the names of the owners thereof, or in the amount of such
maintenance tax as they appear in such book, shall not affect the validity of such tax or the lien
thereof, and any such errors may at any time be corrected by resolution of the board of
supervisors of such drainage district.
(RSMo 1939 § 12370, A.L. 1990 S.B. 777)
Prior revisions: 1929 § 10789; 1919 § 4419
(1958) Appeal from action to recover maintenance taxes levied by drainage district and impose a lien on realty of defendant
did not involve construction of revenue laws nor title to realty within the meaning of this section. Fort Osage Drainage District
of Jackson County v. Foley (Mo.), 312 S.W.2d 144.

Finding #2 - We noted that the collector remitted $359,971.12 to the Birmingham
Drainage District, on check number 4861 on February 20. 2004 and, on check number
6331, the collector sent $373,883.31 on 2/28/2005 to the district.  These remittances
were based on collections made by the Collector of the Maintenance tax plus
interest.

Finding #3 - We noted that both of the above checks were made out to Birmingham
Drainage District and were sent to the law firm of Lathrop & Gage, 2345 Grand
Avenue, Suite 2400, Kansas City, MO 64108.

Finding #4 - In our opinion, the Clay County Collector must comply with Missouri
Revised Statute 55.190
.

Collector to make daily report to auditor (second class and certain first class
counties).

55.190. The county collector of revenue of each county of the first class not having a charter
form of government and of each county of the second class shall make a daily report to the
auditor of receipts and balance in his hands, and where deposited, and shall deliver to the
auditor each day a deposit slip showing the day's deposit. The collector shall, upon receiving
taxes, give duplicate numbered tax receipts, which the taxpayer shall take to the auditor to be
countersigned by him, one of which the auditor shall retain, and charge the amount thereof to
the collector. The collector shall also make a daily report to the auditor of all other sums of
money collected by him from any source whatsoever, and in such report shall state from whom
collected, and on what account, which sums shall be charged by the auditor to the collector.
The collector shall, upon turning money over to the county treasurer, take duplicate receipts
therefore and file same immediately with the county auditor.
(RSMo 1939 § 13871, A.L. 1973 H.B. 678)
Prior revisions: 1929 § 12208; 1919 § 9606; 1909 § 3827
Finding # 5 - In our opinion, we believe that Clay County Collector must comply with Missouri Revised Statute 52.275 as
shown below.

Drainage and levee tax commissions.
52.275. The county and township collectors for collecting taxes for drainage and levee districts
shall collect on behalf of the county and pay into the county general fund the following
amounts: in counties of the first class, except first class counties with a charter form of
government, one percent on current taxes; in counties of the second class having less than
one hundred thousand inhabitants and in counties of the third class, one and one-half percent
of the amount he collects on current taxes; in counties of the third class where the collector is
required by law to maintain a branch office, two and one-fourth percent of the amount he
collects on current taxes; in counties of the fourth class, two percent of the amount he collects
on current taxes; and in counties of the second class having less than one hundred thousand
inhabitants and in all counties of the third and fourth classes, two percent of the amount he
collects on delinquent drainage and levee taxes.
(RSMo 1939 § 11106, A.L. 1955 p. 368, A.L. 1959 S.B. 62, A.L. 1961 p. 281, A.L. 1987 S.B. 65, et al., A.L. 1998 S.B. 597)
Prior revisions: 1929 § 9935; 1919 § 12927; 1909 § 11481

Clay County Circuit Clerk

To obtain a background understanding, we requested copies of documents from the Clay
County Circuit Clerk.  The documents we received included:

1    Reorganization document dated 11/18/1970 - The court decreed that the Birmingham
 Drainage District is reorganized as a public corporation of the State of Missouri for a term
 of 50 years.  

    Reorganized districts--articles of association.
    242.080. 1. Any drainage district heretofore organized and any district that is now in process of organization or any
    drainage district that may hereafter be organized under any previous or existing law of this state may organize under
    the provisions of sections 242.010 to 242.690, and after so organized shall be entitled to the benefits of all of the
    provisions of said sections and any or all laws amendatory hereof.

2     Articles of Association of Reorganized Drainage District (Birmingham Drainage District)
  filed 9/29/1970 - This document identified the name of the district, the length of existence
  (50 years), and the boundaries.  It was signed by the members of the district with identified
  parcels of land ownership by each person.

3    Case Number CV1012557CC - In the Matter of the extension of the corporate life of the
 Birmingham Drainage District - A judgment was rendered by the Honorable James Welsh.
 A hearing was held on 12/17/2004 on the petition of the supervisors of the Birmingham
 Drainage District for an extension of the corporate existence of the drainage district until
 2/16/2085.  The court overruled all objections to the extension of the corporate existence
 of the drainage district, and found that the corporate existence of the drainage district
 should be extended in order to meet existing obligations under a lease which expires
 2/26/2085.

    Extending time of corporate existence.
    242.130. 1. Whenever the board of supervisors of any district organized under sections 242.010 to 242.690 or any
    previous enactment of the general assembly of the state of Missouri providing for the organization of drainage districts
    by the circuit courts, finds that, in order to either raise funds to complete the plan for reclamation, pay for works
    already completed, pay bonds outstanding and interest thereon, or interest on the same, restore any works or construct
    new works or for any other cause, the time for which any such drainage district has been incorporated should be
    extended, such board shall call a meeting of landowners of the district in the same manner as is provided for in
    section 242.150; the notice shall state the time, place and purpose of such meeting, and that if the majority of acres
    represented at said meeting be cast in favor of such extension of the district's corporate existence a petition will be
    presented to the court organizing the district, asking for such extension of time.

    2. Such meeting shall be conducted in the same manner as is provided in section 242.150 for the election of
    supervisors, except that one member of the board of supervisors shall act as chairman of such meeting and the
    secretary of the board or his deputy shall act as clerk; and if a majority of the acreage represented at such meeting
    shall vote in favor of such extension the board of supervisors shall within forty-five days before the next term of the
    circuit court file a petition with the clerk of said court praying for the extension of the corporate existence of the
    district, and after the filing of such petition the same proceeding shall be had as is provided for in sections 242.030
    and 242.040 relating to articles of association and incorporation of the district.

    3. If such petition be granted by the court, within twenty days thereafter the circuit clerk shall transmit a copy of the
    decree to the secretary of the board of supervisors who shall transmit a copy of the same to the secretary of state and
    to the recorder of deeds of each county having land or other property in the district, who shall file and preserve the
    same in his office, and for such service he shall receive a fee of one dollar. In case the court should find that such
    extensions should not be allowed said petition shall be dismissed and the cost incurred in the case be paid by the
    district.
(RSMo 1939 § 12373)
Prior revisions: 1929 § 10792; 1919 § 4422

Finding #6 - It is our opinion that the Birmingham Drainage District appears to exist
based on Case Number CV1012557CC whereby the court overruled all objections to
the extension of the corporate existence of the drainage district, and found that the
corporate existence of the drainage district should be extended in order to meet
existing obligations under a lease which expires 2/26/2085

Data supplied by a taxpayer

The Clay County Auditor reviewed data supplied by a taxpayer.  Many points pertaining to
legal issues were included among the data and are beyond the scope of the review performed
by this office.  Among the issues this office is unable to answer include the following:

    1  A 1923 Supreme Court ruling which notes a state constitutional prohibition against a
    drainage district being formed within the city limits of Kansas City on a petition by
    landowners.  However, we note the area encompassed by the Birmingham Drainage
    District was not annexed by Kansas City until 1962, long after the District had been
    formed.

    2  A Howard County Circuit Court finding that a levee district which had gone out of
    existence due to the expiration of the specified term of corporate existence would be
    required to liquidate the district as a public corporation, pay its debts and return the rest
    of the money to the taxpayers. (Cause 214, Watts vs Gross, legal file item 27).  
    However, we note the Clay County Circuit Court has on several occasions recognized
    the legal and ongoing existence of the Birmingham Drainage District and the taxpayer
    was a party in at least one of these actions.


After reviewing the documents and emails provided by the taxpayer, we have concluded that if
the taxpayer has continuing concerns about the standing of the Birmingham Drainage District
that the taxpayer take up his concerns with a proper court of law to resolve those issues.  
Meanwhile, the Clay County Collector will continue to comply with those statutes that require
her to collect maintenance taxes for the Birmingham Drainage District until county officials are
informed by a court of law.

Clay County Auditor Request for data from the State Auditor

As part of this review, we requested certain information from the State Auditor.  Below are
questions asked of the State Auditor by the Clay County Auditor.

    1. Please provide me a list of drainage districts that the Missouri State Auditor certifies
    the tax rate or levy for each district.

    2. Please provide me the State Auditor opinion as to whether all drainage districts in
    Missouri should have their rates certified by the State Auditor.

A copy of the response from the State Auditor can be found in Attachment A to this audit
report.

As the reader will find, the State Auditor replied as follows:

“The State Auditor’s Office reviews and certifies ad valorem taxes.  Ad valorem taxes are
based on the value of the property taxed, not the benefit of service(s) provided.”

The State Auditor also provided a list of the drainage districts in the state that have authorized
an ad valorem tax and certified by the State Auditor.  Those districts included Morrision Levee
District and the Platte County Drainage Ditch District 1.

Finding #7 - It is our opinion that the State Auditor does not believe that the
maintenance tax collected by the Clay County Collector on behalf of the Birmingham
Drainage District requires certification from the State Auditor as do all other ad
valorem taxes (property taxes).2  May 6, 2005


[Letter from Claire C. McCaskill   (click here)
Missouri State Auditor

Auditor does not audit public Levee and drainage district corporations unless they
are charging ad valorem tax based on value of property taxed.]


Clay County Auditor Comments

The issue of the maintenance tax bills collected by the Clay County Collector on behalf of the
Birmingham Drainage District has been significantly investigated by a taxpayer. Because of the
taxpayer concerns, the Clay County Auditor performed this audit, In an effort to serve the
taxpayers, we reviewed many documents and came to conclusions. We believe that the
Collector is complying with her statutes. The taxpayer asserts that the Birmingham Drainage
District is "dead". The Clay County Auditor is unable to make that legal conclusion and hence,
awaits further court action.

The following pages represent a verbatim word response from the taxpayer concerned about
the audit.



Review of Clay County Audit Report
Birmingham Drainage District

From: James Bynum
    PO Box 682
    Smithville, Mo. 64089
    (816) 699-3975


Re: April 26, 2005 Audit Report to Clay County Collector
    Birmingham Drainage District

As I understand it, Clay County's current Birmingham Drainage District audit report to the Clay
County Collector only addresses the period 2004-2005.  However, it is a serious concern when
the audit report indicates the county is unsure if the district even exists. The audit report
states,
It is our opinion that the Birmingham Drainage District appears to exist based
on a 2004 court case.

As a Clay County taxpayer, I am concerned about the tax liability burden the officials of Clay
County may have placed on the taxpayers county wide by failing to verify legal authority to
collect monies for, and pay out to, a dead drainage district which ceased to exist in 1963. The
audit report states that Clay County paid out $731,855.43 in 2004 and 2005 to unknown
persons claiming to operate the dead district within the city limits of Kansas City. According to
references in the audit report there has been no legal authority to collect or pay out district
maintenance taxes  since December 22, 1963 when the district ceased to exist as a legal
corporate entity.

The audit report does note the fact that:
"A 1923 Supreme Court ruling which notes a
state constitutional prohibition against a drainage district being formed within the
city limits of Kansas City on a petition by landowners."

It would also appear that the audit report factual compiler missed the July 21, 1950 letter in the
Birmingham Drainage District file from the Birmingham Drainage Distinct attorney (Alan
Wherritt) to Corps of Engineer showing the District knew it would not be able to extend its
charter if or when Kansas City extended its city limits:
    "In re: East Bottoms Drainage & Levee District Meriweather et al, vs Kansas City 259         
    S.W., page 89."
    "In the proceedings to get a plan of reclamation the City of Kansas City protested
    that it alone had exclusive power to build levees and construct drains within the city
    limits and that therefore the prayer of the petition  should not be granted. The trial judge
    made that finding in accordance with the contentions of Kansas City, Missouri and
    dismissed the petition to form a district. The Supreme Court of Missouri in passing on the
    matter said that it was their opinion that Kansas City had exclusive jurisdiction over
    levees and drainage within the City Limits, --


                                                                                                                     
 Page  2 of 6

The audit report does note Clay County is aware that Kansas City extended the city limits to
encompass the District at least a year before the District ceased to exist in December 1963.

However, we note the area encompassed by the Birmingham Drainage District was
not annexed by Kansas City until 1962, long after the District had been formed

The audit report compiler failed to note the fact that as late as 2002, the Secretary of State
carried the Birmingham Drainage District on its records as a dead corporation. This document
is in the County's files on the district.

                    2002, July 11
            Secretary of State - Abstract of Corporate Record
            Charter Number                     D00000049   State of Incorporation Missouri
            Name of Corporation              Birmingham Drainage District
            Date Incorporated                   Dec. 22, 1913
           
 Status                                     Inactive - Charter expired on Dec. 22, 1963





The audit report does note the Articles of Association to reorganize the drainage district within
the city limits of Kansas City on a petition of landowners seven years after the district ceased
to exist in spite of the fact the principles had documented the
state constitutional
prohibition against a drainage district being formed within the city limits of Kansas
City on a petition by landowners."


    Articles of Association of Reorganized Drainage District (Birmingham Drainage
    District) filed 9/29/1970 - This document identified the name of the district, the
    length of existence (50 years), and the boundaries.  It was signed by the
    members of the district with identified parcels of land ownership by each
    person.

Furthermore, the audit report does note: A Howard County Circuit Court finding that a
levee district which had gone out of existence due to the expiration of the specified
term of corporate existence would be required to liquidate the district as a public
corporation, pay its debts and return the rest of the money to the taxpayers. (Cause
214, Watts vs Gross, legal file item 27).

The audit report compiler failed to note the Kansas City Court of Appeals ruling on the term of
life for a corporation in the same case and in the same file:

In Watts v. Gross, the Kansas City Court of Appeals ruled that when the specified term of life of
a district authorized by the court ended, "such district ceased to exist" "and after such date
action of those who continue functions of the district was without statutory authority." As a
result, "the land owners within the district were in the same situation as if there had never been
a drainage

                                                                                                                    
Page 3 of 6

district and they could not organize a new district by attempting to comply with the
reorganization statutes
then in existence." Furthermore, the court states, "As a
consequence, the holdings of meeting of property owners within the district, the
election of officers, the levying and collection of levee district taxes and the
expenditure of monies derived therefrom was without legal authority."
Cited as 468 S.
W. 2d. 223.

Furthermore, the audit report appears to be based on incomplete information supplied by the
Circuit Clerk's Office and a complete disregard by the court for the
"state constitutional
prohibition against a drainage district being formed within the city limits of Kansas
City on a petition by landowners,"
as well as the federal legal requirement "to liquidate
the district as a public corporation, pay its debts and return the rest of the money to
the taxpayers."
:

    Reorganization document dated 11/18/1970 - The court decreed that the Birmingham
    Drainage District is reorganized as a public corporation of the State of Missouri for a
    term of 50 years.  

    Reorganized districts--articles of association.
    242.080. 1. Any drainage district heretofore organized and any district that is now in process of organization
    or any drainage district that may hereafter be organized under any previous or existing law of this state may
    organize under the provisions of sections 242.010 to 242.690, and after so organized shall be entitled to the
    benefits of all of the provisions of said sections and any or all laws

It would appear that the Circuit Clerk failed to inform the compiler of the failure of the court to
follow Missouri statutes, which states that only an existing drainage district may be
reorganized. The Birmingham Drainage District  had been dead for seven years.
                           
               242.120. When an existing drainage district has been reorganized
                   under sections 242.010 to 242.690 the board of supervisors will not
                   be required to follow such steps or requirements of sections 242.010
                    to 242.690 as are inconsistent with or rendered unnecessary, by the
                   work that has already been done in the district; -----

Furthermore, the Circuit Clerk failed to inform the compiler that  the clerk failed to send the
court decree to the Secretary of State within the 60 day time limit required by  state law to
create a legal corporation, since this would cause the court to directly violate the  
state
constitutional prohibition against a drainage district being formed within the city
limits of Kansas City on a petition by landowners."


               242.040.3. Within sixty days after the said district has been declared a
                   corporation by the court, the clerk thereof shall transmit to the secretary
                   of state a certified copy of the findings and decree of the court incorporating
                   said district, and the same shall be filed in the office of the secretary of state
                   in the same manner as articles of incorporation are now required to be filed
                   under the general law concerning corporations.


                                                                                                                            Page 4 of 6
Moreover, it would appear that the Circuit Clerk failed to inform the audit report compiler of the
1970 documents filed in court in an attempt to get the life of the Drainage District extended,
eight years after Kansas City incorporated the district and seven years after district charter
expired. The court would not and could not extend the life of the district at that time.
    
The report does brings out a surprising fact. Apparently, unknown to the majority of land
owners within the district, and the City of Kansas City, Missouri, a court extended the life of the
dead district for another 80 years.

Finding #6 - It is our opinion that the Birmingham Drainage District appears to exist
based on Case Number CV1012557CC whereby the court overruled all objections to
the extension of the corporate existence of the drainage district, and found that the
corporate existence of the drainage district should be extended in order to meet
existing obligations under a lease which expires 2/26/2085

    Case Number CV1012557CC - In the Matter of the extension of the corporate life of
    the Birmingham Drainage District - A judgment was rendered by the Honorable
    James Welsh.  A hearing was held on 12/17/2004 on the petition of the supervisors of
    the Birmingham Drainage District for an extension of the corporate existence of the
    drainage district until 2/16/2085.  The court overruled all objections to the extension of
    the corporate existence of the drainage district, and found that the corporate existence of
    the drainage district should be extended in order to meet existing obligations under a
    lease which expires 2/26/2085.

The audit report also makes reference to a court action in which this taxpayer was involved
Kansas City v. James Bynum et al. The audit report writer appears to be misinformed as to the
nature of the court action which only recognized that the Birmingham Drainage district was the
owner of record for the land taken in 1916 to build the levee.

    we note the Clay County Circuit Court has on several occasions recognized
    the legal and ongoing existence of the Birmingham Drainage District and the
    taxpayer was a party in at least one of these actions.



A second court action the audit report appears to refer to is a 1995 Circuit Court Order on
readjustment for assessment of benefits for the Birmingham Drainage District. That was a very
strange court action brought by individuals and corporations. It appears the lead petitioner
mentioned in the case to raise taxes didn't have the acre of land necessary to even vote in a
drainage district election.

    As I understand, two petitioners who didn't have enough land to vote in drainage district  
    elections were on the Board of Directors for the Village of  Birmingham, two petitioners  
    have claimed to be on the Board of Supervisors for the dead Birmingham Drainage
    District, plus two corporation petitioners have claimed to have representatives on the


                                                                                                                   Page 5 of 6

    dead district Board of Supervisors in spite of state statutes which prohibited such  
    corporate representatives from serving in that capacity.. (see Attorney General's  
    Opinion 39-2002)

It is even more interesting to find in the Summary of the Committee Version of the Bill
HB 1085 -- DRAINAGE DISTRICTS. The summary states the only witness before the committee was the
Birmingham Drainage District who testified to get the prohibition against corporate representatives on a
drainage district Board of Supervisors overturned in the legislature.

The documents in the county records confirm:

   
 1         a state constitutional prohibition against a drainage district being
               formed  within the city limits of Kansas City on a petition by landowners."

    2        The Birmingham Drainage District Charter expired on Dec. 22, 1963

    3        landowners could not organize a new district by attempting to comply
              with the reorganization statutes then in existence

    4        a federal requirement to liquidate the district as a public corporation,
              pay its debts and return the rest of the money to the taxpayers."
    
    5        the holdings of meeting of property owners within the district, the election
              of  officers, the levying and collection of levee district taxes and the
              expenditure of monies derived therefrom was without legal authority

    6        someone acting without legal authority has certified to the county
              collector the obligation to collect taxes and pay the taxes out of county
              funds to unknown person or persons.

The audit report also confirms the county must ensure there is legal obligation to collect taxes
and that the monies are only paid out for
all lawful, true, just and legal accounts, demands and
claims of  every kind and character.


Clay County Collectors office

Finding #1 - It is our opinion that the Collector must comply with Missouri Revised
Statute 242.490 - Levy of maintenance tax--procedure
       
    
            The maintenance tax shall be apportioned upon the basis of the net assessments
            of benefits accruing for original construction or subsequently adjusted
            reassessments, shall not exceed twenty percent thereof in any one year and
shall
            be certified to the collector of the revenue of each county in which lands of
            the district are situated in the same book in like manner and at the same
            time as the annual  

                                                                                                                    Page 6 of 6


            installment tax is certified, but in a separate column, under the
            heading  "maintenance tax".


Finding # 5 - In our opinion, we believe that Clay County Collector must comply with
Missouri Revised Statute 52.275 as shown below.

Drainage and levee tax commissions.

52.275. The county and township collectors for collecting taxes for drainage and levee districts
shall collect on behalf of the county and pay into the county general fund the following
amounts: in counties of the first class,---

County Auditor Statute

    He shall audit the accounts of all officers of the county annually or upon their retirement from office.
    The auditor shall audit, examine and adjust all accounts, demands, and claims of every kind and
    character presented for payment against the county, and shall in his discretion approve to the county
    commission of the county all lawful, true, just and legal accounts, demands and claims of every kind
    and character payable out of the county revenue or out of any county funds before the same shall be
    allowed and a warrant issued therefore by the commission.

In Summary

As I understand the audit report, the county intends to continue to collect taxes for a dead
drainage district under a false certification with: 1) a  state constitutional prohibition against it
operating in Kansas City;
2) a federal requirement to liquidate the district as a public
corporation, pay its debts and return the rest of the money to the taxpayers
; and 3)  
pay out the monies to some unknown person or persons without legal authority to spend it.

Meanwhile, the Clay County Collector will continue to comply with those statutes that
require her to collect maintenance taxes for the district until county officials are
informed by a court of law or a vote of the people to do away with the district.


Respectfully submitted,

Jim Bynum