King, Ballinger differ on origins of $18 landfill fee

Wednesday, May 9, 2018

At a meeting of a state legislative committee last week at the Berryville Community Center, State Sen. Bryan King and State Rep. Bob Ballinger presented conflicting legal opinions on the mechanism that allowed a Pulaski County Circuit Court judge to impose an $18 service fee on property owners in Carroll and five other Northwest Arkansas counties.

The fee is included in 2018 property tax bills in Carroll, Baxter, Boone, Marion, Newton and Searcy counties. It is intended to repay bondholders whose investments financed the purchase of the now-defunct North Arkansas Board of Regional Sanitation landfill in Baxter County and to reimburse the Arkansas Department of Environmental Quality for the costs of cleaning up and closing the landfill.

The Ozark Mountain Solid Waste District issued the bonds in 2005 to purchase the landfill but later defaulted on the payments and unsuccessfully sought federal bankruptcy protection. Bank of the Ozarks, acting as trustee for the bondholders, sued the solid waste district and Pulaski County Circuit Judge Tim Fox issued an order imposing the fee on April 21, 2017, following the recommendation of court-appointed receiver Geoffrey Treece, an attorney with the Little Rock firm of Quattlebaum, Grooms and Tull.

King contends that special language included in the 2014 ADEQ appropriations bill set the stage for the imposition of the service fee, which has enraged residents in the six counties comprised by the solid waste district.

Then-state Sen. Johnny Key of Mountain Home sponsored an amendment to the appropriations bill that would allow the ADEQ to use money from its post-closure fund to clean up and close the landfill. A section of the amendment states that “(The Arkansas Department of Environmental Quality also may:) Institute a civil action against the regional solid waste management district and all of the entities composing the regional solid waste management district to seek the recovery of any funds expended from the Landfill Post-Closure Trust Fund under subdivision (b)(1) of this section, unless satisfactory repayment arrangements are reached and agreed upon by the department with the district and the bondholders.”

At the May 3 meeting of the Joint Interim Committee on Energy, King said the section addressing bondholders was added by state Sen. Jeremy Hutchinson, a Republican from Little Rock.

“That’s very concerning when you start talking about inserting language on the repayment of bondholders in an ADEQ appropriations bill,” King said.

King, who chaired the meeting, called the situation “an insider job,” and called for an independent investigation of the situation.

King said he invited Key to speak at Thursday night’s meeting.

“I gave him the respect and the opportunity to come speak and explain it, and he respectfully declined,” King said.

King said he had also emailed Hutchinson to ask for an explanation of the section of the special-language amendment that mentioned bondholders, but had not received a response.

“I don’t understand how these players can be a part, at least trying, to affect all of us and put us in this situation but now will not come and answer questions in front of the committee and the people,” King said.

Ballinger said initially that the court action that led to the imposition of the $18 fee was filed before the 2014 ADEQ appropriations bill was passed, but was corrected by an audience member. The bill was passed in March 2014 and the lawsuit was filed nine months later, in December 2014.

“The civil action that ultimately stuck us with the $18 fee predates this legislation being filed, right?” Ballinger said. “What I’m saying is, this special language didn’t provide the mechanism for filing the lawsuit, because the lawsuit had already been filed prior to that date.”

“This legislation did pre-date the lawsuit,” King said.

“But it didn’t provide the mechanism for suing them,” Ballinger answered.

Later, King reiterated his call for an independent probe into the issue.

“I think the case is being made, No. 1 is there needs to be an independent investigation in this,” he said. “The second thing is, Sen. Hutchinson … it is inexcusable to address bondholder repayment in ADEQ appropriations. It is inexcusable, folks. And it’s inexcusable that he won’t provide answers.”

Rep. Kim Hendren, a Republican from Gravette, suggested that the committee hold a joint public meeting with the House State Agencies Committee, chaired by Ballinger, and invite “anybody whose name has come up,” to speak and answer questions about the issue.

“If you’re talking about me, I think I’m entitled to respond,” Hendren said. “More than that, I think I’m obligated to respond if I’m going to take your $40,000 a year pay and your $145 a day per diem.”

“We’ve had a lot of public meetings up here and that’s why I think maybe having an independent look into this can get us the information,” King said.

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