7.3.18-WEB-Solid Waste1.jpg

Lee H. Dunlap/Staff

Ozark Mountain Solid Waste District lawyer John Verkamp said he anticipates more motions to dismiss county tax collectors from lawsuits across the district.

Carroll County Prosecuting Attorney Robert T. Rogers has filed a motion to dismiss a lawsuit filed against Carroll County Collector Kay Phillips regarding the $18 fee collected to pay back bondholders after the NABORS landfill debacle and other such motions are anticipated.

Fayetteville lawyers Matt Bishop and Wendy Howerton have filed lawsuits on behalf of taxpayers in the six counties included in the Ozark Mountain Solid Waste District — Baxter, Boone, Carroll, Marion, Newton and Searcy.

Although Phillips wasn’t named in the initial Carroll County version of the lawsuit, an amended complaint was filed a few days later naming her as a defendant.

The respective county tax collectors had already been named as defendants in the initial filings, records show.

At a recent solid waste board district meeting, district lawyer John Verkamp told board members he anticipates similar motions to be filed in the other lawsuits as well.

The board of what is now the Ozark Mountain Solid Waste District decided in 2005 to buy the RLH landfill in northern Baxter County.

The district sold about $12.3 million in bonds to finance the purchase. The Northwest Arkansas Economic Development District managed the landfill at first, but the board split ways with that agency in 2009.

There were environmental problems with the landfill at the time of purchase and some money from those bonds was supposed to be used to rectify those problems. ADEQ rejected several plans the district proposed, so those problems were never fixed.

The district had to raise tipping fees charged to haulers when they dumped trash to keep revenue flowing. As those fees rose, some of the six counties stopped using it altogether, which resulted in a loss of revenue.

Eventually in 2012, the board voted to default on the bond sold to finance the purchase. Bank of the Ozarks, trustee for the bond holders, sued the district and a receiver was named to collect money to repay bond holders, which resulted in the annual $18 fee on people’s property taxes.

In addition, ADEQ took over the landfill in 2014 in order to permanently close it. Special language in an ADEQ appropriations bill, sponsored by then-state Sen. Johnny Key that year, allowed ADEQ to use money from the Post Closure Trust Fund to close the landfill, but also allowed the agency to seek remuneration from residents in all six counties.

Bond holders sued in Pulaski County Circuit Court to force the residents of the six counties to reimburse bond holders. The suit was successful and a receiver was appointed to develop a plan to reimburse the bond holders.

The court accepted the receiver’s report and recommendation to have the $18 fee collected on real property taxes. That collection commenced this year.

In the six lawsuits, the $18 fee is called unconstitutional.

“The $18.00 charge herein is not for the Defendants’ exercise of its police powers,” the suits say. “Rather, it goes almost entirely to creditors. Paying creditors is not a function of the Defendants’ exercise of police powers, for as the Receiver noted, the Defendant Ozark is not operational. Moreover, paying creditors is never an exercise of police powers.

“Further, the $18.00 confers no benefit on those taxpayers bearing it, because the entity charging it provides no services to said taxpayers; rather, it is a fee designed solely to benefit ADEQ, which already has the funds it needs to clean up, and the investors in the bonds who chose to take the risk of investing.”

The suits ask the court to bar defendants from collecting the fee and to refund any fees already paid.

In the motion to dismiss against Phillips, Rogers argues that Phillips wasn’t properly served with notice of the suit because County Judge Sam Barr received notification.

He also alleges that the suits should be filed in Pulaski County Circuit Court where the original action was filed by bond holders.

In addition, Rogers argues that ADEQ, the receiver and the trustee for the bond holders should all be named as defendants in the lawsuits because new court action could harm them in the long run.

In a response to Rogers’ motion, Bishop argues that the law doesn’t support enjoining the ADEQ, receiver or bond holder trustee. He maintains that Carroll County is the proper venue to keep Carroll County tax payers from having to foot the bill for Rogers and Phillips to travel to Little Rock for court proceedings and so tax payers can observe court proceedings if they wish.

(1) comment


This whole thing stinks. The Bank of the Ozarks and their greedy investors made a bad decision, now they want the little people to bail them out. Please boycott Bank of the Ozarks and make your opinion count.

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.