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Category Archives: Missouri economy

Damming the Osage


Damming the Osage: The Conflicted Story of Lake of the Ozarks and Truman Reservoir by Leland and Crystal Payton.
Published by Lens & Pen Press, 4067 Franklin, Springfield MO 65807, $25 postpaid.
See http://www.dammingtheosage.com

dto-cover-720Leland and Crystal Payton, prolific authors of books with lots of photographs about the history and culture of the Ozarks and about American culture generally, have tackled the history of human use and transformation of the Osage River. Their focus is on the political and financial machinations which resulted in the construction of Bagnell Dam and Truman Dam and their impoundments in the along the northwestern boundary of the Missouri Ozarks. Their original photographs and reproductions of graphics from newspapers, maps, magazines and advertising materials, provide a collage of images of the area before and after its transformation, as well as the images created by promoters of how it might look.

The book covers the history of the residents of Osage basin, from prehistory to the present. From its origin in eastern Kansas to Bonnots Mill, the Osage flows through prairies along the northern Ozarks border into the Missouri River, at a point seven miles east of Jefferson City. Many and diverse primary sources, such as the writings of explorers and newspaper accounts, as well as the work of archaeologists, historians and other social scientists, make the book a rich trove.

The theme of book is consistent with my own take on the history of the development of North America over the past five centuries, which is that development has been driven by the opportunities created by government investment for private investors seeking wealth through the subdivision of real estate and exploitation of natural resources. George Washington was a land surveyor, as was Thomas Jefferson’s father Peter. The Washingtons, the Jeffersons and other promoters–working hand in hand with the government–used every public and private resource they could muster to carve up the Appalachian frontier and beyond into reservations, territories and states for private and public gain. Eventually, the whole country became subdivided. In the case of the valley of the Osage River, the land was divided into lake lots and condo units and multi-purpose reservoirs.

Bagnell Dam and Lake of the Ozarks

The Paytons identify Ralph Street, an “obscure Kansas City lawyer,” and Walter Craven, a mortgage banker also from Kansas City, as the fathers of Lake of the Ozarks. Street and Craven wangled a construction permit from the Federal Power Commission for the Bagnell Dam in 1924 and began acquiring options to buy land. The FPC and the Missouri Public Service Commission awarded permanent licenses for the project in 1926 to Craven, who transferred the licenses to Union Electric in 1929, after Craven failed to obtain construction financing.

Unlike other popular accounts of dam-building in the Ozarks, the Paytons pay careful attention to what existed at various times before the construction destroyed towns (Linn Creek) and roads that connected towns, cutting off neighbors from one another. The occupation by Osage Indians is described, as well as the vain attempts to modify the river to enhance navigation in the steamboat era. Later, the valley was the pathway of railroads, many of them unsuccessful. Some sites, such a Monegaw Springs in St. Clair County and Ha Ha Tonka in Camden County, were beautiful places that captured the dreams of real estate salesmen and promoters of tourism.Caplinger Mills

Once Bagnell Dam was completed in 1931, a particular flavor of tourist development was created around Lake of the Ozarks, remnants of which may be seen along the old parts of Missouri Highway 7 and US Highway 54 that have been bypassed by newer roads. The Paytons give us color and black-and-white reproductions of tourist pottery, wood carvings, fieldstone cabins, and garish billboards, as well as the intense condo development that came in the past two decades.

Truman Dam and Truman Lake

Though the Corps of Engineers had opposed the construction of dams, including Bagnell Dam, by private companies, the Corps did not have a clear legislative mandate to build dams for flood control, hydropower, and irrigation, though it had always been engaged in construction and maintenance of levees and drainage of wetlands. In 1926, Congress asked the Corps to study 180 rivers and their tributaries to examine the feasibility of federal construction of reservoirs. The Corps’ report on the Osage basin, delivered in 1933, proposed dams on Pomme de Terre, the Osage River above Osceola, and the Grand River just north of its confluence with the Osage. In 1944, FDR approved the Pick-Sloan Plan for development of the Missouri River basin, and the dams on the upper Osage were among the 107 dams authorized.

Pointing out that “Civic organizations in Warsaw, Clinton and Osceola were convinced that a dam, any dam, anywhere on the Osage would guarantee prosperity,” the Paytons designate Haysler A. Poague, a judge in Clinton, as the “stepfather” of the Truman Dam. Poague became an advocate of one large dam at Kaysinger Bluff near Warsaw, rather than the two smaller dams proposed by the Corps in 1933.

A massive flood in 1951 convinced Congress and the public that spending money to put people to work and to control and store water was worth doing; the Paytons do not point out that the most severe drought in recorded history followed the 1951 flooding, which surely added to the public support for a water project. However, funding of the project was delayed other priorities—the Vietnam War and the War on Poverty, according to the Paytons—but the land acquisition and construction began in the mid-1960s. In 1972, just as work was beginning on the dam, the Environmental Defense Fund, the Missouri chapter of the Wildlife Society, and several other organizations and citizens, including Leland Payton, filed suit in federal court seeking to stop the construction of the project.

The National Environmental Policy Act of 1969 (NEPA) required federally funded projects to be preceded by meaningful environmental impact statements, giving environmentalists a tool to challenge the adequacy of the investigation of ecological impacts of projects. In the case of the Truman Dam, the opponents were concerned about the fate of the paddlefish, among other issues, and could also point out that the cost-benefit analysis provided by the Corps strained to show net economic benefits.

The final third of Damming the Osage depicts the political and legal wrangling over whether Truman Dam and its impoundment would be completed.
Missouri’s congressional delegation led by Senator Stuart Symington, members of the state legislature, and virtually all local officials, as well as chambers of commerce, supported the project, even though biologists and many farmers opposed it.

While the town of Clinton seems to have held its own, most of the Truman Lake area has continued to decline. Missourians have had to cope with the negatives. The Missouri Department of Conservation learned to raise paddlefish in hatcheries, so that they would not be extirpated in the Osage basin. Engineering oversights resulted in fish kills below Truman Dam and massive erosion below Stockton Dam on the Sac River, a major tributary of the Osage, which required additional land acquisition and bank stabilization.

During the same era, the Corps of Engineers’ will and ability to marshal support for dam projects seems to have ended. The Endangered Species Act of 1973 provided environmentalists with stronger arguments. After tremendous fights, Congress deauthorized dam projects on the Meramec River in Missouri and the Buffalo River in Arkansas, as elected officials listened to a broader swath of their constituents and began to question the wisdom of destroying the last few free-flowing rivers.

The Paytons have captured the spirit of the times the book covered. The text is thorough and the images are vivid. While Leland Payton was clearly opposed to the construction of Truman Dam, the positions of the proponents are fairly explained. Damming the Osage is an essential chronicle of how dams and reservoirs gain momentum and get built, even though they make sense perhaps for only a minority.Truman Dam

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Workers’ comp reform requires judges to decide whether an injury was caused by work, not just while at work


Near the end of a workday, Jason Pope’s supervisor asked him to move a motorcycle to a showroom on an upper level of the dealership where Jason worked.  He moved the bike to the upper showroom, then tripped walking down the stairs in the dealer’s building. In the fall, he fractured his ankle, which required surgery. He was off work for nine weeks and needed physical therapy over seven months.

Jason filed a workers’ compensation claim, which was denied because Jason failed to prove to the workers’ comp judge that his injury arose (1) out of his employment and (2) in the course of his employment. Under Missouri workers’ compensation law prior to 2005, an employee injured while on the job was not obligated to prove these two factors. Under the old law, workers’ compensation was administered under “no-fault”  system, in which the employer was usually liable unless the employer could show that the injury was not real or was not related to employment.

After the denial of Jason’s claim, he appealed to the Missouri Labor and Industrial Commission, which is a special court that hears appeals of decisions of administrative law judges in Missouri’s workers’ compensation system. The Labor and Industrial Commission reversed the administrative law judge’s decision, ruling the injury to be covered by workers’ comp. The employer then appealed to the Western District of the Missouri Court of Appeals, which issued its affirming opinion in  Pope v. Gateway to the West.

The 2005 changes to Missouri’s workers’ comp statutes took away the presumption in favor of coverage of employee injury claims. Part of the target of the “reform” was to prevent employers from paying for injuries that may have happened at work but which were not caused by the job. For instance, when an employee was walking across a parking lot and a “pop” occurred in his knee, the injury might not be covered by workers’ compensation, since it occurred in a normal life activity–walking–not as the result of a hazard or risk associated with the job.

In another situation arising after 2005, an employee was injured in a fall as she made coffee in a breakroom at work. Her medical records indicated that the employee’s shoes caused her to fall; the court held that the employee failed to prove that her injury was caused by a risk related to her employment.

The Western District framed the issue this way:

we consider whether Pope was injured because he was at work as opposed to becoming injured merely while he was at work.

The court sifted the facts that Jason presented, noting that Jason was following instructions from his supervisor to move motorcycles into the upper showroom. When he fell, he was on his way to check with his supervisor to make sure that he was done for the day. He couldn’t reach the supervisor without walking down stairs. His boots didn’t cause him to fall. His own physiology did not cause his injury. The court concluded that these facts  (and some others)

reasonably support a finding that Pope’s injury was causally connected to his work activity, i. e., a risk related to his employment as opposed to a risk to which he was equally exposed in his normal, non-employment life.

 

Before the 2005 amendments to the workers’ compensation statutes, the cause of Jason Pope’s injury would not have been an issue. The employer’s insurance company would have paid the same claim that it would have ended up paying, sooner though and without two appeals.

Policy should not be made on the basis of an isolated anecdote, such as this true story about Jason Pope.  As the number of similar cases accumulates, the workers’ comp insurance industry will be in a position to determine whether the 2005 reforms save money for employers and are of a general benefit to the economy. For now, there can be no question that the burden of the reforms falls on injured employees, some of them unable to work, and health care providers which are awaiting payment.

 

 

 

 

 

 

 

 

 

Skills gap leaves Missouri manufacturing jobs unfilled


Manufacturing in the United States and the export of manufactured products from the United States is growing. If jobs could be filled, production and exports could rise. Nobody is opposed to products being manufactured in the US for domestic use and for export.

According to an article in St. Louis Today, citing a study by the Manufacturing Institute, with results confirmed by St. Louis area businesses, thousands of manufacturing jobs are going unfilled because of lack of qualified applicants. And technical colleges have additional capacity to provide the needed training.

After World War II, manufacturers of shoes, clothing, furniture and other products moved into the small towns and cities of the Ozarks, taking advantage of a surplus of mostly non-union, low-skilled workers. Manufacturers later arranged for their products to be made in Mexico and elsewhere in Latin American, then in Asia, seeking lower labor costs and less environmental and worker-safety regulation. Most towns in the Ozarks have vacant manufacturing facilities, even though transportation systems and location with respect to markets have never been better.

Universities and colleges are everywhere, offering all kinds of courses in residence programs and at satellite campuses, with opportunities for online education for students of all ages.

Where are the students who want to learn practical mathematics and how to operate computer-controlled design and manufacturing equipment? Some of them are in the military services. Others are working in unskilled jobs, never having become aware of their own potential to learn and earn. Others are in the gray-collar world of retail and services, where hours are long and wages and benefits skimpy.

While the St. Louis Today article blames the shortage of trainees for modern manufacturing jobs on the widespread acceptance of the value of a college education–as though the college credential had value even without skills to go with it–I’d place part of the lack of interest in manufacturing on the bad experience with manufacturing in the Ozarks. In the 50s, 60s, 70s and 80s, the manufacturing workers in the Ozarks experienced low wages and benefits, workplace injuries, frequent layoffs, and union-busting, ending with their abandonment (I am not forgetting that these low-wage jobs were better than no jobs and sometimes were the best jobs ever available in some communities for many people).

Manufacturers locating plants in the Ozarks asked poor communities for subsidies in the form of property tax abatement and general-obligation bond issues to for construction of facilities. Some plants polluted streams or left toxic wastes.

The manufacturing of today is much different. It’s cleaner and safer. Workers with training and skills can earn as much or more than many people who have college degrees and obtain as much or more job security. Here’s hoping that Missouri’s technical schools will be seen as the gateways to the good life, rather than an undesirable alternative to college.

Will Northwest Arkansas ramp up?


Successful businesses spawn–and depend on–other businesses. The scale of Walmart’s success has changed the face of Northwest Arkansas and spilled over to some extent in to adjacent areas. What next?

Matt Fifer and Grace Calloway sketch out a scenario of an astounding escalation in creation of opportunities for building on Walmart’s success: The Boom Ahead–Why Northwest Arkansas Could be the Next Silicon Valley.

Matt’s own career exemplifies what he’s writing about. I met Matt about five years ago, when he asked me to assist him with a small real estate deal in the Table Rock Lake area. He told me that he grew up in Stone County, Missouri, and had graduated from Reeds Spring high school. He worked for Walmart several years after college and rose through the ranks. He left Walmart not long before I met him and started a business called 8th & Walton, which teaches how to do business with Walmart. That business has grown steadily.

As this essay points out, if you can do business with Walmart as a vendor or service provider, you probably have the ability to do business with other large companies. Because so many companies located in Northwest Arkansas have honed their skills in product development and marketing by learning to do business with Walmart, the next stage may be for venture capitalists to move in and provide the funding that will allow many new efforts to succeed.

Branson seeks advice on how to revitalize Highway 76; will designers study the market?


For a decade, the first mile or two of State Highway 76 west of US 65 in Branson has languished. In this section of the Strip, most of the construction of restaurants, motels and retail strip centers took place 30 t0 40 years ago, under the economic conditions and design sensibilities of the time. For most of a year, the City of Branson’s leadership has been working toward a vision for the revitalization of this portion of the Strip.

The City has followed the usual path of soliciting proposals from firms with expertise in land-use planning, incorporating the disciplines of engineering, architecture and design. The City is nearing the point of awarding a contract for producing a plan with design standards that will to some extent dictate the look of this part of the Strip, much of which was heavily damaged by the February 29, 2012 tornado.

Design standards have another effect, which is to set constraints on the returns on investment in land and building. Real estate appraiser Skip Preble takes a critical look at how land-use planners often neglect to evaluate real estate markets when they formulate design standards in “How Marketing Could Boost Land Development,” published on the New Geography web magazine.

Can land-use planners can be expected to examine real estate market data and translate what they learn into practical design standards? How would a governmental body, in adopting regulations incorporating the new design standards, know whether they will work well with the realities of future real estate markets?

 

St. Louis firm handles $662 collection case in West Plains, loses there and again on appeal. Why?


As we all know by now, you can often follow the money to the answer. Sometimes the trail is faint.

A one-car accident in Howell County, which sits on Missouri’s border with Arkansas about halfway across southern Missouri, resulted in a 911 call and the summoning of the Brandsville Fire Protection District (FPD) and the Missouri Highway Patrol and an ambulance. FPD personnel arrived at the scene and assisted with first aid and loading Jerry and Nina Phillips into ambulances.

FPD personnel remained at the scene for a couple of hours, providing traffic control while the wrecker loaded the Phillips’ car.

The FPD sued the Phillipses for an unpaid bill of $662. The bill was issued under the FPD’s ordinance allowing it to charge non-residents of the FPD for services. These charges are authorized by Missouri statute. When the bill wasn’t paid Read the rest of this entry

Missouri governor signs HB1103, giving courts power to order maintenance of “private roads”


The Missouri General Assembly enacted HB 1103 in the past 2012 regular session, which explicitly grants circuit court judges the authority to impose financial responsibility for maintenance of certain “private roads” onto parcels of real estate that benefit from these roads. Governor Nixon signed the bill into law on July 12, 2012.

There are many problems with rural roads in Missouri. Simple questions–such as determining who owns the road, whether it is a subject to property taxes, who has the right to use it, and who is obligated to pay for its maintenance–are often impossible to answer.

HB 1103′s provisions regarding private road maintenance change section 228.368 RSMo and add three new sections to Chapter 228 of the Revised Statutes of Missouri. This legislation is an attempt to solve the problem of nobody stepping forward to pay for road maintenance in situations in which no provision was made when the road was created. But its definition of “private road” greatly limits its applicability.

According to the new section 228.341, a “private road” means “any private road established under this chapter or any easement of access, regardless of who created, which provides a means of ingress and egress by motor vehicle for any owner or owners of residences from such homes to a public road. A public road does not include any road owned by the United States or any agency or instrumentality thereof, or the state of Missouri, or any county, municipality, political subdivision, special district, instrumentality, or agency of the state of Missouri.” Got that?

Read the rest of this entry

Getting a Missouri collector’s deed after a tax sale just became harder

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On July 3, 2012, the Missouri Supreme Court released two opinions that clarify the procedure by which purchasers of tax certificates at the annual August sales may obtain deeds to the tax-delinquent property. Both cases illuminate section 140.405 of the Revised Statutes of Missouri with respect to the content and timing of notices (“redemption notices”) required to be sent to the delinquent taxpayer (and others, such as lienholders) so that the tax sale purchaser can obtain a deed to the property for which the purchaser has paid the delinquent taxes and received a “certificate of purchase” which I refer to here as a tax certificate. These new decisions apply to first-year sales and second-year sales, not third-year sales, which have different redemption rules.

Redemption notices must be sent at least 90 days before August anniversary of sale

Harpagon MO, LLC v. Bosch overrules Read the rest of this entry

Court forces Missouri church to pay its attorney

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There’s nothing less spiritual than a bill from a lawyer, except a judgment against the church in favor of a lawyer who sued a church for an unpaid fee.

Lawyers and courts are worldly by their very nature. While churches and courts want to do what is right, they have different standards for determining rightness. The Missouri Court of Appeal’s decision in Teasdale & Associates v. Richmond Heights Church of God in Christ demonstrates just how differently courts and a church Read the rest of this entry

Subdivision developer gets nailed for assessments and has no special developer rights


Missouri Western District Court of Appeals just affirmed a trial court’s judgment in a way that will resound with homeowners’ association (HOA) boards across the state, many of which are struggling to raise sufficient revenues to take care of streets and amenities, even though many of the developer-owned lands that benefit from the streets are apparently exempt from assessments.

Lenders that have foreclosed on developers may find that this opinion undermines the lenders’ ability to claim to enjoy the developer’s exemption from assessments on lender-owned land. Parties purchasing land from lenders, hoping to have the status of the former developer, may find themselves heavily in debt to the HOA, perhaps blaming the lenders who sold them the land.

In Woodglen Estates Association v. Dulaney, Dulaney obtained 17 parcels of land from the FDIC. This land had once been owned the original developer Braeman, then passed through the hands of a few different parties, before ending up with the FDIC, which had taken the parcels of land from a failed bank.

The Woodglen Estates Association hired an auditor to review its finances. The auditor discovered that land owned by Dulaney had not been assessed for several years. The association then sued Dulaney, and Dulaney asserted two defenses:

  • As successor to the original developer, Dulaney should be exempt from assessments on land it owned.
  • Much of the land that Dulaney owned in Woodglen was in “parcels,” not having been subdivided into “units,” so that it should not be assessed.

The appellate court looked at the line of Missouri case law that holds that the special rights and privileges of a developer, typically reserved in the declaration of covenants for the subdivision, do not automatically pass with ownership of the developer’s real estate. These rights, called “developer rights,” “declarant rights” or “development rights,” may be assigned, but a party claiming to hold these rights has to be able to prove to have acquired them by assignment. Dulaney had no proof of assignment of declarant rights.

To make matters worse for Dulaney, the Woodglen declaration did not contain an exemption for the developer’s real estate–which is a common feature of declarations–and the appellate court noted that developers do not receive an automatic exemption. Under current Missouri law, other than in condominiums, a developer may lawfully reserve an exemption from assessment for its own real estate. The original developer simply failed to create the exemption when filing the declaration and made the mistake of including land in the declaration that was not ready to be developed.

Dulaney argued that its “parcels” were not subject to assessment, since only “units” and “unit owners’ could be assessed. The appellate court noted that some of the declaration’s provisions were ambiguous when addressing the respective rights of owners of units and parcels, but the assessment provisions were clear:  “each owner shall be obligated to pay to the Board such sum as shall have been established….,” without distinguishing between owners of units and parcels. The legal description attached to the declaration had included Dulaney’s parcel, placing this land under the provision of the declaration.

For lenders, the lesson is that any loan documents for a development loan should include a security interest in the declarant rights, and any documents showing the recovery of the developer’s real estate should include a specific assignment of the declarant rights. When the lender sells the former developer’s property, the conveyances to the purchaser should include the assignment of declarant rights. These issues are covered in more detail in this essay.

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