Closer to a resolution? Solid waste district won’t appeal rulings on $18 fee

Tuesday, July 7, 2020

By Scott Loftis

Taxpayers hoping to see the end of the controversial $18 fee being collected in six north Arkansas counties got some good news last week, although there are still some issues to be addressed.

At a meeting on Monday, June 29, in Harrison, the Ozark Mountain Solid Waste District’s board of directors voted unanimously not to participate in any appeals of circuit court rulings — issued in five of the six affected counties — declaring the fee illegal.

The following day, the Arkansas Department of Environmental Quality (ADEQ) said in a court document that it would not claim an interest in the approximately $2.34 million already collected through the fee.

The fee, which is being collected in Carroll, Baxter, Boone, Marion, Newton and Searcy counties, is intended to repay 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 assessment, which could continue for 30 years or more, also is intended to repay ADEQ for up to $16.5 million in costs related to closing and cleaning up the landfill.

The solid waste district included all six counties before Carroll County withdrew to form its own solid waste district earlier this year.

The $18 fee is being collected under an order from Pulaski County Circuit Judge Tim Fox, who presided over a case in which Bank of the Ozarks (now Bank OZK), acting as a trustee for the bondholders, sued the solid waste district. Fox’s order followed the recommendation of Geoffrey Treece, a Little Rock attorney whom the judge appointed to serve as a receiver for the solid waste district.

Fayetteville attorneys Matt Bishop and Wendy Howerton filed a class-action lawsuit on behalf of Berryville resident Paul Summers in Carroll County Circuit Court in May 2018. They later filed similar lawsuits in the other five counties. The lawsuits seek to have collection of the fee halted and for property owners who have already paid the fee to be reimbursed. Bishop and Howerton filed an amended complaint in Carroll County in July 2019.

Defendants in the local case are the solid waste district and Carroll County tax collector Kay Phillips.

On March 6, Carroll County Circuit Judge Scott Jackson ruled that the $18 fee is “an improper tax.” He ordered Phillips to continue collecting the fee and Treece to hold the money that is collected until any appeals are adjudicated.

In a June status report submitted to Fox in the Pulaski County case, however, Treece recommends that the bondholders receive $2 million and the solid waste district receive the remainder of the funds already collected.

In response, Bishop and Howerton filed writs of garnishment in Carroll County Circuit Court, seeking to garnish the solid waste district’s accounts with Bank OZK and Equity Bank. They also filed a motion for a finding of contempt against Treece on Tuesday, June 23.

That prompted Bank OZK to file a petition in Pulaski County two days later on Thursday, June 25. In that petition, Bank OZK asks Fox to order that the funds already collected be deposited into the registry of the Pulaski County Circuit so that Fox can determine how the money should be distributed.

Fox issued an order granting that petition on Friday, June 26. The order directs all parties who claim an interest in the money to submit those claims to the court within 30 days.

The solid waste district’s decision not to appeal the lower court rulings and ADEQ’s decision not to claim an interest in the money already collected could signal a pending victory for the taxpayers, although Bank OZK could pick up the appeal. Also still to be settled is what will happen with the money already collected and how, if Fox orders it returned to the taxpayers, that will be achieved. The motions for contempt filed against Treece also are still pending.

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