Note: There was a slight change in this report after it was filed with the Clay County Clerk. The 2004 financial statement was not found until the day this report was filed, June 21, 2005. (Dated stamped document)
The May 9, 2005 Clay County Auditor's Report raised a number of red flags concerning the legal and financial circumstances of the Birmingham Drainage District (BDD), a public corporation, which expired December 22, 1963 . The final legal action available to the supervisors serving on December 22, 1963 was to pay the legal debts, liquidate the assets of the district, and distribute the proceeds to the taxpayers, as Kansas City had exclusive jurisdiction over levees and drainage within the City Limits.
Since that time, no one has had the authority to accept tax money or to spend tax money in the name of the district. Yet, at the end of 2003, records show the BDD had $1,319,307.57 cash in hand. It pick up another $564,132.72 in 2004. It also spent $872,498.00 on a Missouri River levee breach no one seems to know about. There is also $850,000.00 reserved to replace a pump. Not only that, but what would a $10,461.59 survey of Shoal Creek have to do with a Missouri River levee? Could this have been for the Shoal Creek Valley development near Liberty?
According to the Auditors report, in the past two (2) years, Clay County has given $733,854.43 to this organization in public tax money. Financial records indicate another $375,930.00 was collected in rent payments, for a total of $1,109,784.43 income for an organization that can not legally exist in Kansas City. The prior three (3) year income was $939,825.00. The five (5) year total was over $2,012.241.00.
Not only that, but since 1990, attorney Robert W. McKinley has claimed to be president of the BDD. Between 1993 and 2004, legal fees and maintenance salary for one person was over half million dollars. In 1995, LDS Church's non-profit corporation, Property Reserve, Inc, was even paid over $28,000.00 in legal fees for filing suit to get the taxes raised on everyone else, based on "levee improvements" made on its commercial property development. It was approved. The records indicate some of the "improvements" are just now being made.
The total legal and maintenance salary outlay for the last 4 years was $268,645.75. McKinley's law firm has been paid out of public tax money: 1) $40,065.64 in 2001 for filing a petition to extend the life of the district and hiring a lobbyist; 2), $30,063.77 in 2002 to supervise the lobbyist and get the law changed so a LDS Church corporate representatives could serve as a district supervisor; 3) $64,534.82 for filing a 33 year old invalid court decree to get the district's public charter reinstated; and, 4) $56,238.73 for getting the court to complete the 2001 action and extend the life of the dead BDD, for a total of $180,902.56.
A local farmer, Dan Sissom, (Mormon Church property Farm Manager) whose family sold its farm's public assess rights has been paid as the Overseer of the drainage district and maintenance supervisor. He was paid: 1) $33,369.38 in 2001; 2) $34,460.00 in 2002; 3) $34,467.14 in 2003; and 4) $31,685.00 in 2004, for his part time BDD work, for a total of $133,981.52.
So, how could this possibly happen?
The county is required to collect taxes based on RSMO 242.460.2 ------- this "drainage tax book" shall be your warrant and authority for making such demand and collection. But, someone has to certify that the taxes are due. The Auditor did not identify the person who certified the document as president of the BDD, but he did offer a clue. He also noted the potential problem facing the county.
The Auditor noted that there is a Constitutional prohibition which prevents forming a drainage district within the City limits of Kansas City on a petition by land owners. There is also a 1923 Supreme Court Ruling to that affect. The Supreme Court pointed out that city dwellers would not have the necessary one (1) acre of land needed to have a vote in the business of the district. (on file in Clay County Clerk's Office.)
As long time attorneys for the BDD, Wherrett & Turpin were well aware of this point when they convinced a judge to issue an order in 1970 reorganizing the district. However, the court would not order a certified copy of the Court Order be sent to the Secretary of State within the 60 day limit allowed by law.
The Auditor also noted "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 complete court record is in the Clay County Clerk's Office BDD file.)
Fortunately, there is a paper trail to follow which answers some of the questions. However, it does not answer the question of why Wherrett & Turpin, with the knowledge that the BDD could not exist within the Kansas City limits, continued to represent the major land owners operating as the BDD after it cease to exist in 1963. Nor does it explain why they continued to accept the taxes remitted to the office of Wherrett & Turpin by Clay County.
This was brought to a head in 1969 when the City of Kansas City attempted to condemn land along the levee for its Birmingham Sewage Treatment plant and hazardous sewage sludge disposal site. Both Congress and EPA state that exposure to any of the pollutants (Organic and inorganic chemicals as well as disease causing pathogens) in sludge through the air, water or food chain will/could cause death, disease, cancer as well as physical and/or mental problems. That's hazardous!
Kansas City had to either expose the facts and officially take over the district or help the BDD appear as though it had legal standing, a job for Wherrett & Turpin. Wherrett & Turpin would not have filed a petition to extend the life of the BDD, or filed a petition to reorganize the BDD in 1970, without the approval of Kansas City attorneys and/or the encouragement of Kansas City officials. Had Kansas City not approved these actions, it would have filed objections, based on its Constitutional responsibilities, just as it did in the 1923 actions.
The situation was complicated in 1978, when the Church of Jesus Christ of Latter-day Saints bought approximately 80% of the land within the original BDD boundary. In a legal levee district that would have given the Church corporation representatives 80% of the votes and total control.
In this case they would have found a number of problems, foremost would have been the clouded property titles, because there was no records to establish the boundary between the land purchased and the land condemned for the levee in 1916. Records indicate the Church may not have realized the BDD was dead or could not exist within the City limits of Kansas City until about 1989 when Kansas City put pressure on Property Reserve Inc, to help it close down the public levee roadway crossings on the Levee. McKinley was installed as the president of the BDD.
Now it would appear, the taxpayers are paying a drainage tax (runoff tax) directly to Kansas City and Clay County is collecting a heavy drainage district tax for the dead BDD. The County is sending the money to a Kansas City law firm representing Church corporations.. Not only that, but between 1993 and 1998, Clay County mislabeled the tax statements claiming the taxes were for "levee" taxes, "Birmingham Levee District" taxes, and even "Birmingham" taxes.
Not only is there a cloud on the county officials who are now taking tax money and given it to the dead BDD dominated by Church officials, there is a serious cloud on the property titles of land along the levee. Structures have even been erected on the BDD property originally condemned for the levee right of way.
Not much could be done about the structures on the levee right-of-way since the BDD was dead and the Platt of the BDD and levee right of way were not filed in the Recorders Office in 1916 as required by law, nor were they filed in 1970, when the court implied it was reorganizing the BDD.
242.040. 4. A copy of said findings and decree, together with a plat of the district, shall also be filed in the office of the county recorder in each of the counties having lands and other property in said district, where the same shall become a permanent record, and each such recorder shall receive a fee of one dollar for filing and preserving the same.
It appears the County Recorder could not find these documents for the Auditor. However, it was the Auditor's opinion that since there had been several court actions involving the Birmingham Drainage District, it must have some legal standing:
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
According to the Auditor: 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
Actually, it appears there was no objections filed in the case, because no taxpayer was aware of the court hearing . The Case Number file, CV101-125557 CC, revealed that the petition was filed three years earlier on April 12, 2001, by attorney Robert W. McKinley of Lathrop and Gage, as attorney for the BDD. The financial statements on file reveal Mr. McKinley's firm appears to have charged $40,065.64 for filing the petition for a group of Supervisors (mostly Church of Jesus Christ of Latter- day Saints corporate representatives) who could not have legally served, if the BDD had a public corporate charter authorized by the court or State. See Attorney General's Opinion 39-2002 -- Corporate representatives are not eligible to serve on a drainage district Board of supervisors.
It is clear from the financial reports that Norbert A. Kemp, as an Official of the LDS Church's Investment Properties Division and alleged member of the dead BDD board of supervisors, is running the show. This is confirmed by the 1994 financial report where BDD paid travel expense from Utah for Kemp to attend a meeting with Station Casinos. The meeting was productive. Station Casino started out with a $60,000.00 payment to BDD in 1997 and $220.000.00 in 1998. Ameristar purchased Station Casino and currently kicks in $140,000.00 each year to BDD as rent -- on top of the Maintenance Tax?
Still, in 2000, Robert McKinley identified himself as president of the BDD, with five additional board members, Norbert Kemp (Property Reserve, Inc), Fred J. Wernicke (Grainger), Henry Kester (Kronos), Arsene Vandendaele (farmer) and, Dan Sissom (farmer-Property Reserve, Inc, farmer manager-BDD Overseer-BDD levee maintenance supervisor). Public financial statements are not available for 1999, 2000, but there is no indication that Sissom has ever been paid as a member of the Board of Supervisors. However, to appear to be legal, two members had to live within the district.
To vote or serve on a board of supervisors, the member must own at least (1) acre of land in the district. Under RSMO242.150, the law limits a live and active district to a board of five supervisors. According to the 2002 financial statement, only five people were paid as board of supervisors: 1) Norbert Kemp; 2) Arsene Vandendalle: 3) Henry Kester; 4) Kirk Armstrong; and 5) Victor Sorensen. Norbert Kemp appears to be the highest ranking Church official. In 2004, he was paid fees of $2,830.0 while the other 4 members only received $2,980.00 between them
Home Work Norbert A. Kemp 3817 South 2215 East 10 East South Temple Street Property Reserve, Inc. Salt Lake City, UT 84109 Salt Lake City, UT 84133 (Investment Properties (801) 278-3665 (801) 240-5874 (suite 400) Division, LDS Church)
Under RSMO242.390 a live district with a public charter is required to hire an attorney under contract to take care of the legal requirements of the district and advise the supervisors. It does not authorize the attorney to act as the sixth member of the board of supervisors, as president or sign legal contracts as president of the district as Mr. McKinley has done.
Robert W. McKinley 843 West 56th Street 2345 Grand Blvd, Suite 2800 Lathrop & Gage, L.C. Kansas City, Mo 64113 Kansas City, Mo 64108 Tel. (816) 361-9723 Tel. (816) 460-5636
The Auditor noted that tax checks for 2004 and 2005 were sent to McKinley's address. 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.
It is difficult to find any public information on a live public drainage or levee district corporation, much less a dead one. The state does not require live district corporations to have an office address or even an agent, or file annual reports as required.
Finding #3 raises a big red flag. According to financial statements, the official address of record in the County Clerk's Office is: Birmingham Drainage District, 106 N. Main, Liberty, Mo. 64068. That is the address of Wherrett & Turpin. William J. Turpin filed the 1970 petition to reorganize the district seven years after the charter expired and almost a year after Alan Wherrett tried to get the district charter extended -- seven years after the charter expired. It was Alan Wherrett who notified the Corps of Engineers on 21 July 1950 that he was aware of the 1923 Supreme Court ruling that Kansas City had exclusive jurisdiction over levees and drainage within the city limits. Which of course is why Wherrett, as attorney for BDD, allowed the district charter to expire in 1963 after Kansas City incorporated the area in January 1962..
The firm of Wherrett & Turpin continued to charge legal fees, office rent and a salary for the Secretary/Treasurer from 1963 until 1993 when Robert W. McKinley assumed control of the BDD records. From 1994 through 1997, McKinley's firm, Swanson & Midgley, charged $300.00 a year to store the records. In a 1998 court, McKinley claimed he had no BDD records, which appears to be true since he has not been able to produce a 1970 certified copy of the court decree purporting to reorganize the BDD. Nor was there any storage charges for the records after 1997.
Lathrop & Gage is the current firm of ROBERT W. MCKINLEY, agent of record for , NORTHLAND PARK, INC. (1980, survivor of BENEFICIAL DEVELOPMENT COMPANY and ZIONS SECURITIES CORPORATION (1996) which controls Northland Park, & Shoal Creek Valley in Kansas City.. According to the Supreme Court of Hawaii, Zions Securities is also the authorized agent for PROPERTY RESERVE, INC..
McKinley also includes the BDD in his resume as "A lecturer and contributing author to the Missouri Bar Assn. Federal Practice Seminar and the Kansas City Bar Assn. Federal Practice Seminar, (and) he has served as president, Birmingham Drainage District; president, Carriage Club and a member of the executive committee of the Clay County Economic Development Corp.
Yet, payments in McKinley's name only appear in 3 financial statements, 1989 ($1,500.00 for legal work on Sissom's Island property), 1993 ($55.90), and 1995 ($134.38) ($32.45). The records do not indicate any payment as a member of the board of supervisors.
McKinley is attorney of record for: 1) the Birmingham Drainage District petition to extend life of dead district CV101-002557 (2001-04); Property Reserve Inc vs Clarence Davis, in CV198-00681 (1998); 3) Property Reserve Inc Vs Kansas City, in CV198-008458 (1998-99); 4) was served a summons as President of the Birmingham Drainage District in Kansas City vs James Bynum, in CV198-006085 (1998-99); and, 5) listed as president of the BDD in Miller vs Birmingham Drainage District CV192-006478 (1992-93).
McKinley also signed legal documents as president of the Birmingham drainage District: 1) (Book 1967, page 495) on 26 March 1990; 2) (Book 2001, page 49) on 15 October 1990; and 3) 26 October 1990, which also indicated he was the attorney for Property Reserve Inc and Investment Properties Division of the LDS Church. McKinley's signature was notarized by Deborah K. Riekhof, alleged Secretary/Treasurer of the Birmingham Drainage District and employee of McKinley's firm Swanson & Midgley.
The purpose of the three documents prepared by the City of Kansas City and signed by McKinley appeared belatedly to: 1) authorize a levee roadway crossing for the City on NE 28th St; 2) authorize the City to erect fences and gates on the BDD property, and 3) allow Property Reserve, Inc to close North Arlington Street south of 28th street ten (10) days after the document was signed. Together, these documents signed by Mr. McKinley would have effectively landlocked six (6) landowners between the levee and the Missouri River.
The third document depended on Ray Sissom, past president of the BDD, giving up the public access rights into a small tract of property he owned south of Property Reserves property, at the end of the paved section of North Arlington, were a gate had been installed, paid for by several landowners to prevent dumping.. His son, Dan Sissom, was the overseer for the levee and maintenance man and farm manager for Property Reserve, so it may have seemed worth signing away his access rights. In spite of the fact the document was never signed by all parties, the gate was promptly moved to the north side of Property Reserves' property. Property Reserve didn't actually try to block access on the roadway until 1999.
We also have to consider that as president of the BDD in 1951, Sissom would have known of the 1923 Supreme Court ruling that the BDD could not exist after Kansas City took over the area in 1962. Alan Wherrett (Wherrett & Turpin) who documented the court ruling was the BDD attorney and a BDD supervisor. Ann Turpin was the Secretary (BDD Resolution, 12 February 1951). He would have also known public access crossing rights were Ordered by the 1916 Court (Book 48, pages 247-248) and the Corps of Engineers built roadway crossing where they were needed by landowners in 1951.
Yet, McKinley persisted in trying to close the levee roadway crossings: 1) first in Miller vs Birmingham Drainage District CV192-006478 (1992-93) on the west end of the levee; 2) then in Kansas City vs James Bynum, in CV198-006085 (1998-99) for NE 28th Street; and 3) in a letter claiming the foregoing case allowed the BDD to close the roadway crossing on North Arlington. Since 1978, the Church of Jesus Christ of Latter-day Saints (LDS) has operated in Clay County under several different names: 1) Beneficial Development Co; 2) Investment Properties Division of the LDS Church; 3) Deseret Title Holding Corporation; 4) non-profit Property Reserve, Inc.; 5) Northland Park Development; 6) Zions Securities. Corp; and 7) Birmingham Drainage District.. More recent projects involves a 1,700-acre, master-planned community called Shoal Creek Valley in Kansas City, Mo. by Zions Securities, which includes a golf course, along with custom homes and apartments.
In 1978, Beneficial Development Co. was instrumental in purchasing 4324.5 acres of the 5,390 acres in the BDD area of Kansas City under the Deseret Title Holding Company banner, currently dba as the non-profit Property Reserve Inc, 2,200 acres being assigned to Zions Securities for industrial development.
In a 1981 filed legal document, Deseret Title Holding claimed to have sold the BDD, who it claimed, operated an agricultural levee, the right to take care of its drainage problems outside the boundaries of the district. ( Book 1432, pages 342-343). This appears to be the "levee improvement" used to raise the taxes in the 1995 suit by Property Reserve, Inc.
It was not an agricultural. The levee was built in 1916: "To make Birmingham safe from floods and promote industry, business men and property owners have organized a drainage board and $350,000 will be spent to dike the district, which includes all the town." "A levee eleven miles long will circle the city from the bluffs on one side along the river to the bluffs on the other side.""The dike will be built according to government specifications."(Kansas City Post) The dike, or levee, was rebuilt by the government in 1951 as a part of the federal levee system -- with the BDD as legal sponsor. The sponsorship expired in 1963.
In 1982, the City of Kansas City appeared to be deeply involved in covering up the fact that this was a part of the federal levee system operated by the dead BDD. In a November 18, 1982, Kansas City inter-departmental memo to K.E. Burkhead, chief, Engineering Services, Robert Melton said he was having a problem negotiating the purchase of Robert Minter's land and didn't think it could be acquired, "If it still remained policy not to condemn in this area,"
Northland Park is the 2,200 acre modern industrial park of which approximately 500 acres has been developed. Northland Park is located in a Kansas City Enterprise Zone. The drainage maintenance tax rate paid on the 500 acres of developed land in Northland Park would normally have been the same low rate per acre as paid by the Church Corporations and every other tax payer, if there was no reassessment to justify a higher tax. In a filed 1983 legal document Northland Park claims to have sold the BDD the easement rights to take care of its drainage facilities and if BDD could not fulfill the obligation in the future for some reason, the rights reverted to Northland Park (Book 1495, pages 155-156)
The Auditor's report raised a major red flag concerning the high level of maintenance tax remitted to the attorney in the report: 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.
Why would the dead BDD need to collect over 10 times the amount it did in 1992, particularly, when even at the end of 1992, it had almost 10 times the amount of cash on hand it needed for annual operational expenses, after the annual expenses had been paid? At the end of 2003 cash on hand was only 4 times the operating expenses, but it had $1,319,303.57 on hand.
As of December 31, 1992, BDD had $416,149.40 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $32,630.43 in maintenance taxes to BDD of the $70,843.27 in total receipts. Total expenses for the year was $45,998.06 including legal expense of $492.50 paid to McKinley's firm Swanson & Midgley as well as legal expenses of $1,504.45 paid to the firm of Wherrett and Turpin. Dan Sissom's BDD income was $3,863.80.
In 1992-1993 the BDD attempted to closed down a public levee roadway crossing to private property on the west end of the levee. It was Ordered to be built by the court in 1916 and built by the Corps of Engineers in 1951. Miller vs Birmingham Drainage District (CV192-006478)
As of December 31, 1993, BDD had $417,863.16 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $33,655.85 in maintenance taxes to BDD of the $99,527.38 in total receipts. Total expenses for the year was $97,813.62 including legal expenses of $9,928.50 paid to McKinley's firm Swanson & Midgley as well as legal expenses of $675.00 paid to Wherrett & Turpin. Dan Sissom's BDD income was $5,825.00. Mr. Wherrett died that year and the BDD sent flowers.
As of December 31, 1994, BDD had $461,003.96 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $65,885.88 in maintenance taxes to BDD of the $114.557.51 in total receipts. Total expenses for the year was $71,416.71 including legal expenses of $4,408.08 paid to McKinley's firm of Swanson & Midgley. Dan Sissom's BDD income was $9,992.80
On June 12, 1995, Property Reserve, Inc, AKA Deseret Title Holding Corp, a non-profit corporation, through McKinley's firm, Swanson & Midgley, filed a petition (CV195-003357 CC) as the majority landowner for reassessment of benefits in the BDD. The court status report for the petition only list the names of Thomas F. Hadley, James L. Riddle and Daniel Sissom, etal. Hadley and Riddle (Village of Birmingham directors) may have been included because the levee was built to protect the city of Birmingham. It is clear they thought the people of the Village of Birmingham would pay less maintenance tax if the large corporate clients of Property Reserve, Inc, paid more. That was not going to happen.. Sissom of course worked for Property Reserve, Inc, and was Overseer and maintenance man for the BDD.
On June 16, 1995, the court ordered publication of notice of petition and Order for mailed notice of petition all as per Order filed. The taxpayers would have had an opportunity to respond to a mailed notice and objections would have been filed. Unfortunately, the court vacated that Order on August 30, 1995.
On September 15,1995, the Court Ordered the appointment of three commissioners to reassess the benefits of land within the district.
On September 15, 1995, the Court also Ordered the appointment of an attorney to represent persons who may be entitled to benefit of Soldiers and Sailor's Civil Relief Act of the United States, and for appointment of Guardian Ad Litem to represent unknown persons, infants, and incompetent persons. Who were not going to be notified.
As of December 31, 1995, BDD had $528,461.97 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $35,755.17 in maintenance taxes to BDD of the $156,645.27 in total receipts. Total expenses for the year was $89,187.26 including legal expenses of $9,724.51 paid to McKinley's firm of Swanson & Midgley. Dan Sissom's BDD income was $23,783.50.
On January 25,1996, the Commissioners petitioned the Court (which was approved) to hire an appraiser at a cost of $1,500.00. The cost was to be paid for by the petitioners. However, the $1,500.00 payment appears to have been paid by the BDD rather than the petitioner and is reflected in the BDD financial records for 1996. The need for the appraiser was to place a value on the agricultural land, mostly owned by Property Reserve. This value was to be compared with the fair market value of residential and commercial property.
As of December 31, 1996, BDD had $533,706.51 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $36,288.31 in maintenance taxes to BDD of the $614,569.51 in total receipts. Total expenses for the year was $80,863.00 including legal expenses of $2,913.41 paid to McKinley's firm of Swanson & Midgley. Dan Sissom's BDD income was $42,981.00.
On September 23, 1997, the Court issued an Order accepting the Commissions report on reassessing the benefits of the district. The Court also Ordered that the commissioners be paid: 1) Gary K. Patton $4,192.50; 2) Cynthia L. Reams $6,978.75; and 3) Jerald L. Hill $4,160.55. Again, the commissioners were paid by the BDD rather than Property Reserve and is reflected in the 1997 financial statement.
On October 2, 1997, the petitioners filed a Motion For Relief From Judgment. There was a very curious statement in the Motion: "Current development within the District is not forced to pay their fair share. Rather, they are allowed to avoid the tax liability for their development." The motion was made to allow raising taxes on new residential and commercial buildings annually as they were built.
According to the document, "With the approval of the Commissioners fees, reassessment of the Birmingham Drainage District will cost the petitioners and the District in excess of $20,000.00. Actually, non-profit Property Reserve, Inc, as the petitioner, who controlled the BDD, paid itself $28,892.25 out of the BDD maintenance funds for legal work. Before legal fees, the cost to the taxpayers for this court action by Property Reserve was $45,723.75. The only entity who benefited from this action was Property Reserve.
On October 22, 1997, Property Reserve, Inc, got the judgment it wanted. The court established a value for agricultural land based on soil class. The soil classes ranged from Class 1 with a value of $1,800.00 per acre to Class 8 at a value of $100.00 per acre. Thats not a bad deal when you consider the City off Kansas City paid $6,213.00 per acre for some of the same land in 1973. The benefits assessed: 1) to agricultural property was 50% of the assessed value; 2) to commercial property was 90% of assessed value; 3) to residential property was 70% of assessed value; and 4) to governmental, quasi-governmental, railroad and utility property was 60% of assessed value.
As of December 31, 1997, BDD had $773,536.85 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $24,582.24 in maintenance taxes to BDD of the $355,777.06 in total receipts. Total expenses for the year was $115,946.72 including legal expenses of $8,646.48 paid to McKinley's firm of Swanson & Midgley. Plus, the $44,223.75 paid to Property Reserve Inc, and the Commissioners as legal expenses. Dan Sissom's BDD income was $23,715.00.
As of December 31, 1998, BDD had $563,911.86 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $37,739.17 in maintenance taxes to BDD of the $428,697.99 in total receipts. Total expenses for the year was $638,322.98 including legal expenses of $11,664.45 paid to McKinley's firm of Swanson & Midgley. Dan Sissom's BDD income was $25,845.00.
In 1999, McKinley was served a summons as President of the Birmingham Drainage District by Kansas City in Kansas City vs James Bynum, in CV198-006085 (1998-99). The BDD attorney defended the BDD right to allow the City of Kansas City to put a gate across NE 28th street on easements the BDD had purchase in June, 1958 (Book 611, pages 6 & 7) to assure a landowner (Robert Minter) public roadway access to his property on the south side of the levee. According to the 1963 financial statement, one of the last official acts of the BDD was to upgrade the Minter Crossing on NE 28th Street and the Minter-Luhnow crossing on North Arlington Street.
In June of 1999, the Secretary of State issued a Certificate of Corporate Abstract that the Birmingham Drainage District was inactive as the charter expired December 22, 1963. The Secretary of State also issued a Certificate of Fact that the Birmingham Levee District had never been registered as a Missouri Corporation.
Reserved for 1999 Financial Information.
In a February 2000 letter, McKinley listed BDD Overseer and maintenance man, Dan Sissom, as a member of the board of supervisors. Members are elected for five year terms, but the financial records indicate Sissom has never been paid as supervisor. But he dis need to show, two people lived in the district.
Reserved for 2000 Financial Information.
BDD failed to file financial statements for 1999, 2000 and 2001 with the County Clerk's office. The Clay County Clerk's request for the financial information was ignored. However, cash on hand had increased by $665,367.48 in the 3 year period to $1,179,279.34.
In 2001, McKinley filed the Birmingham Drainage District petition to extend the life of the dead district CV101-002557. That deed appears to have cost the taxpayers $40,065.06 in legal fees..
As of December 31, 2001, BDD had $1,179,279.34 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $110,663.85 in maintenance taxes to BDD of the $348,052.06 in total receipts. Total expenses for the year was $141,977.45 including legal expenses of $40,065.64 paid to McKinley's firm of Swanson & Midgley. Dan Sissom's BDD income was $33,369.38. Terry Schlemier & Assoc was paid $3,750.00 for lobbying efforts to get state law changed so Property Reserve representatives could serve as supervisors..
The lobbying paid off on January 16, 2002 The first reading of S99SB. To allow an authorized representative of a corporation that owns property in a drainage district to be elected to the board of supervisors in a drainage district. One of the legislators was skeptical and requested an Attorney General's opinion.
May 22, 2002, Attorney General's Opinion 39-2002, There is no provision that an authorized representative of a corporation that owns property in a drainage district may be elected to the board of supervisors of a drainage district under Section 242.150.
The House Committee passed the Bill as HB 1085. The bill also allows the secretary and treasurer of the board to be residents of an adjoining county.
Testifying for the bill were Representative Mays (50); and Birmingham Drainage District.
On 06/27/02, The bill, as 0941, which Allows owners of business property to appoint representative in matters involving drainage districts, was signed by the governor.
This was a case of a dead drainage district, with a board composed of representatives of business property that could not legally serve in that position, testifying for a Bill that would allow the representatives to serve on a board in a legal district. This appears to be a special law for the BDD, an Ex post facto law prohibited by Missouri Constitution's Section 13. That no ex post facto law, nor law impairing the obligation of contracts, or retrospective in its operation, or making any irrevocable grant of special privileges or immunities, can be enacted.
As of December 31, 2002, BDD had $1,520,683.09 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $109,723.21 in maintenance taxes to BDD of the $341,385.75 in total receipts. Total expenses for the year was $251,678.30 including legal expenses of $30,063.77 paid to McKinley's firm of Lathrop & Gage. Dan Sissom's BDD income was $34,460.00 Terry Schlemier & Assoc was paid $9,000.00 for lobbying to get the law changed in favor of the LDS Church..
In March of 2003, Mr. McKinley picked up a certified copy of the invalid 1970 Court order allegedly reorganizing the BDD and filed it with the Secretary of State on April 1, 2003. That was worth $64,534.82. General rules on corporate filing indicate a corporation can not exist until the appropriate papers are files. Specific drainage district rules state the Court must send a certified copy of the Order to the Secretary of State within 60 days of the judgment.
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
As of December 31, 2003, BDD had $1,319,303.57 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $118,175.31 in maintenance taxes to BDD of the $339,384.81 in total receipts. Total expenses for the year was $289,086.03 including legal expenses of $64,534.82 paid to McKinley's firm of Lathrop & Gage. Dan Sissom's BDD income was $34,467.14.
On 12/17/2004, after a 3 year delay, a judgment was rendered by the Honorable James Welsh. A hearing was held 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. It was Granted.
RESERVED FOR 2004 FINANCIAL INFORMATION. AS OF 6-20-2005, THE FINANCIAL STATEMENT HAS NOT BEEN FILED IN THE COUNTY'S BDD FILE.
After this report was turned in to the County Clerk, the financial statement was found to be misfiled.
As of December 31, 2004, BDD had $973,777.22 on hand in cash for maintenance of the drainage facility and levee. Clay County had remitted $359,971.12 in maintenance taxes to BDD of the $564,132.72 in total receipts. Total expenses for the year was $909,659.07 including legal expenses of $56,238.73 paid to McKinley's firm of Lathrop & Gage to get the the life of the district extended.. Dan Sissom's BDD income was $31,685.00.
The 2005 financial state will include the $373,883.31 remitted on 2/28/2005 to the district.
After the Auditor started compiling material for his report, the BDD supervisors recognized that they had a problem and took steps to try to protect themselves from all liability using public tax money.
On the AGENDA for the March 15. 2005, LANDOWNERS MEETING, the BDD Board of Directors: "Resolved that the supervisors obtain and pay the premium of an insurance policy insuring the officers and directors from liability and to pay all legal cost, judgments and out of pocket expenses of the supervisors who are sued or threatened to be sued because of their acts as supervisors." "Which motion was unanimously adopted"
As I understand the legal theory, if a person is aware of wrong doing that could be illegal and does not report it to the authorities, that person then becomes an accessory to the crime.Does this apply to politicians? Does it apply to civil servants?
Wouldn't the Clay County Commissioners have a responsibility to act on this information to protect the county and its taxpayers?