Circuit judges in Baxter, Carroll, Marion, Newton and Searcy County lawsuits have all struck down the writs of garnishment that plaintiffs filed against the Ozark Mountain Solid Waste District in a lawsuit regarding the $18 fee charged to property owners.
The fee is part of the receivership which was granted to devise a plan for repaying bondholders who invested money in what became the NABORS landfill fiasco. A fraction of proceeds from the fee would also go to the solid waste district to help defray costs of maintaining the landfill in northern Baxter County.
Fayetteville lawyers Matt Bishop and Wendy Howerton filed lawsuits challenging the fee as a tax or illegal exaction in all six counties in the district. Circuit judges in five of the counties agreed it was a tax, thus unconstitutional. The final case in Boone County is pending.
Money collected from the $18 fee in 2018 and 2019 has been transmitted to Bank OZK as trustee for the bondholders and held in an account until all the cases have been resolved.
After that money was transferred into the registry of the Pulaski County Circuit Court, where the receivership and first lawsuit originated, Bishop and Howerton filed for writs of garnishment against the solid waste district, which froze the district’s bank account.
That meant the district had no funds with which to pay bills and operate. District lawyer John Verkamp filed motions to quash the writs of garnishment. A hearing was held Thursday, July 23, before Circuit Judge David Laser, who was appointed to hear the cases in Baxter, Marion and Newton counties.
At that hearing, Verkamp told Laser that the plaintiffs requested a declaratory judgement that the fee was unconstitutional, not a monetary judgement. They got what they asked for, but it doesn’t qualify for a garnishment.
The district has no money to pay the tire recycling company that picks up used tires and all those tires were piling up in communities across the district, becoming a health hazard.
Laser asked Bishop why he filed for garnishment of district money to collect money for taxpayers as opposed to revenue from the $18 fee only.
Bishop said the law doesn’t support that. In a garnishment, the source of the money isn’t an issue to the plaintiff except in certain circumstances. He said the district has shown no interest in getting any money from the $18 fee, and that the district’s financial statements show a six-figure income each year.
Verkamp said much of that money is from Arkansas Department of Environmental Quality grants for recycling. Some of that grant money can only legally be spent on electronic waste and used tires.
But Bishop said the money in the Pulaski County registry could be transferred to the bondholders. If that happens, there will be no way the plaintiffs can collect the money illegally exacted from them.
Laser asked Bishop if he was concerned that the solid waste district wasn’t able to operate.
Bishop said his concern was for the taxpayers who paid an unconstitutional tax. He said this was no different than any other garnishment case.
Laser disagreed and ruled in favor of the motion to quash the garnishments However, he also said he would rule in favor of Bishop’s motion to modify the judgement to enter a monetary sum owed to taxpayers.
Verkamp argued that if a monetary judgement is issued, the plaintiffs could then file for another garnishment. But Laser said the judgement would only apply to money collected from the $18 fee, not the district’s bank account.
Judges in Carroll and Searcy counties agreed with Laser’s ruling and their orders quashing garnishments were filed Thursday.
In an email, Verkamp asked solid waste district board chairman Fred Woehl to contact Equity Bank on Thursday to take control of the district’s bank account again.
Woehl said Friday that the district once again has control of the account at Equity Bank.
He said he sent a payment to Champlin Tire Recycling and they were scheduled to pick up tires again starting next week.