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Judge changes ruling on Purdy sales tax issue

Monday, August 31, 2009

A ruling in the sales tax lawsuit against the city of Purdy has taken a significant change of course and is now heading toward a new hearing. Circuit Judge Robert Wiley has reversed his decision against the city.

Judge Wiley had issued an injunction on April 29 against the city for having two one-cent sales taxes for the same purpose with a final judgment against the city. The injunction stemmed from a lawsuit filed by Farmington attorney Tom Burcham, who is pursuing litigation around the state claiming stacked sales taxes are illegal, despite voter approval.

On Aug. 20, Judge Wiley issued a final ruling against the city.

According to Don Trotter, city attorney for Purdy, Judge Wiley issued his final judgment ruling before he received the city's rebuttal to Burcham's claims.

The city had hired the St. Louis law firm of Cunningham, Vogel and Rost as special legal counsel in the city's case. Trotter said the city's response, running close to 80 pages, was subsequently filed.

Judge Wiley reviewed the Purdy case as presented, and on Aug. 28, rescinded his final judgment in the case. Wiley subsequently lifted the original injunction.

"The court on its own motion set aside the final judgment, based on 'new case authority in the briefs just submitted.' That is extremely unusual," Trotter said.

Purdy's response was prepared with the assistance of co-counsel Dan Vogel from the St. Louis firm.

"Dan Vogel did a great job," Trotter added.

The case will now be heard again in court. Trotter said Burcham, who recently filed suits against the cities of Granby and Joplin based on Judge Wiley's ruling, has been asked to respond to the legal arguments cited in the Purdy rebuttal. Once Burcham's response has been submitted, the new hearing will be scheduled.

Trotter said the Purdy City Council was very encouraged by Judge Wiley's latest decision. Trotter remained confident that the legal foundation developed with the assistance of the St. Louis law firm would prevail.

Burcham has applied to the 39th Judicial Circuit to be repaid for legal fees for his time spent on the case.

In light of the lawsuit, the Purdy City Council dramatically restructured its budget for the fiscal year that began on July 1. Three-quarters of funding for the duties of the city clerk were shifted from the general fund onto the water and sewer funds.

The new budget also instituted a 3 percent increase for the cost of water over the 3,000 base amount. The base sewer rate was increased by $1, plus the cost of every subsequent 1,000 gallons was increased by an additional 75 cents.

If the city prevails in the lawsuit, the squeeze caused by the loss of half the city's sales tax income would reduce the pressure to make up the difference with utility rates.

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