Lawyer: Officials to blame for $18 charge

Tuesday, January 15, 2019

By Scott Loftis

Residents who are unhappy about an $18 assessment added to property tax bills in six north Arkansas counties should seek satisfaction “at the ballot box, not in a lawsuit,” according to an attorney representing a court-appointed receiver who recommended the assessment.

Paul Summers of Berryville is the plaintiff in a class-action lawsuit challenging the $18 assessment. Fayetteville attorneys Matt Bishop and Wendy Howerton filed the suit on Summers’ behalf last May in Carroll County Circuit Court. They have since filed similar complaints in each of the other five counties where the $18 assessment has been imposed.

Defendants in the Carroll County case are the Ozark Mountain Solid Waste District and county tax collector Kay Phillips.

Little Rock attorney Mary-Tipton Thalheimer on Jan. 11 filed a response to a motion for summary judgment in favor of the plaintiffs in the local suit. Thalheimer has filed a cross-motion seeking summary judgment in favor of the defendants, and her response to the plaintiff’s motion included a brief in support of her own motion for summary judgment.

Thalheimer represents Little Rock attorney Geoffrey Treece, who was appointed by a Pulaski County circuit judge to act as a receiver for the solid waste district.

Bishop and Howerton have argued that Treece has no standing to intervene on behalf of the solid waste district in the local case. Carroll County Circuit Judge Scott Jackson has not yet ruled on that issue. A hearing on the plaintiff’s motion for summary judgment is scheduled for Feb. 6.


The $18 assessment is included on the 2018 tax statements for property owners in Carroll, Baxter, Boone, Marion, Newton and Searcy counties — the six counties that composed the Ozark Mountain Solid Waste District. Pulaski County Circuit Judge Tim Fox issued an order imposing the fee on April 21, 2017, following the recommendation of Treece, an attorney with the Little Rock firm of Quattlebaum, Grooms and Tull.

Treece recommended that the fee be imposed to recoup bondholders who purchased $12,340,000 in bonds issued by the solid waste district in October 2005 to finance the purchase of the North Arkansas Board of Regional Sanitation (NABORS) Landfill in Baxter County. The $18 assessment, which is likely to continue for 30 years or more, also is intended to repay up to $16.5 million that the Arkansas Department of Environmental Quality (ADEQ) is expected to spend cleaning up the site of the landfill.

The solid waste district defaulted on its bond payments in 2012 and closed the landfill that same year. ADEQ sued the solid waste district in 2013 in Baxter County Circuit Court and was granted an order of summary judgment to take possession of bank accounts and certificates of deposit held by the solid waste district. The order also said that ADEQ was entitled to pursue additional money related to the cleanup and closure of the landfill.

In January 2014, the solid waste district filed a voluntary petition for Chapter 9 bankruptcy. Bank of the Ozarks (now Bank OZK) acting as a trustee for the bondholders, filed a motion asking the court to dismiss the bankruptcy petition and U.S. Bankruptcy Judge Ben Barry granted the motion in an order issued Aug. 4, 2014. Bank of the Ozarks filed a complaint in Pulaski County Circuit Court in December 2014, seeking Treece’s appointment as the receiver for the solid waste district. The court entered a consent order appointing Treece as the receiver in May 2015. Among his court-ordered duties were to evaluate the solid waste district’s operations and make recommendations to the court regarding alternatives for the solid waste district to generate additional income and revenue that could then be used to repay the bonds. Treece filed his report and recommendations with the court in November 2016.

Attorneys for Bank of the Ozarks, ADEQ and the solid waste district raised no objections to Treece’s recommendations, and Fox issued his order establishing the $18 service fee on April 21, 2017.

Summers’ lawsuit alleges that the $18 annual fee constitutes a tax on property owners in the six counties and is an “illegal exaction,” that it violates the separation of powers clause in the Arkansas Constitution, that the solid waste district does not have the authority to impose a fee without providing services and that the fee is excessive.

The suit asks the court to enjoin the solid waste district from assessing or collecting the $18 fee and to refund fees already paid by taxpayers, to enjoin the solid waste district from collecting a $2 per ton “tipping fee” and to refund tipping fees already paid by taxpayers as well as award attorneys’ fees and other relief at the court’s discretion.

New filing

In the Jan. 11 filing, Thalheimer argues that Summers’ lawsuit amounts to a “collateral attack” on the Pulaski County ruling — essentially, attacking the judgment through a method other than a direct appeal.

Thalheimer notes that the solid waste district’s 12-member board of directors is composed of the county judges from each of the six counties and mayors of cities included in the district. The board did not object to Treece’s recommendation that the $18 assessment be imposed, she writes.

“(T)he Board of Directors represented the interests of the Plaintiff and all other taxpayers located within the District in the Receiver Case,” Thalheimer writes. “The District had the opportunity to object to the Report or appeal the Order. No party, including the District, filed a notice of appeal or a motion to set aside the Order. If the taxpayers disagree with the District’s agreement to the imposition of the $18 service fee, their remedy lies at the ballot box, not in a lawsuit requesting that one Circuit Court overrule and enjoin the order of another Circuit Court.”

Thalheimer also argues that the $18 assessment is not a tax, but a service fee authorized by state law. She cites a section of the Arkansas state code that authorizes a solid waste district to “fix, charge and collect fees or charges” under a variety of conditions. She writes that the service fee is fair and reasonable, citing the 2018 ADEQ appropriations bill. Special language included in that bill authorizes ADEQ to “institute a civil action” against a solid waste district to recover agency funds spent on cleanup or closure of a landfill.

Like Treece, Thalheimer is an attorney with Quattlebaum, Grooms and Tull

Hearing date

A hearing on the plaintiff’s motion for summary judgment is scheduled for 1 p.m. Wednesday, Dec. 6, at the Carroll County Eastern District Courthouse in Berryville.

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