Ozark Mountain Solid Waste District Board members had money on their minds Monday, but they voted unanimously to not pursue the appeal of local circuit court decisions naming the $18 fee property owners are paying as unconstitutional.
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 debacle. 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.
After bondholders, through bond trustee Bank of the Ozarks, successfully sued the district to be repaid for the principle they invested, Pulaski County Circuit Judge Tim Fox appointed Little Rock lawyer Geoffrey Treece as receiver. Fox approved Treece’s report to the court that established the fee in the first place.
Circuit judges in Baxter, Carroll, Marion, Newton and Searcy counties ruled that the fee was actually a tax or illegal exaction, thus unconstitutional.
Treece, acting as receiver, filed a notice that those decisions would be appealed to the state Supreme Court to determine constitutionality of the fee.
Last Friday, Fox ordered that the $2,339,686.59 collected on 2017 and 2018 property taxes that had been maintained by the bond trustee, Bank OZK, in a special account be deposited in the registry of the court.
Earlier in the month, Treece had filed a motion to give bondholders $2 million of that amount, with the remainder paid to the solid waste district to meet post-closing monitoring and maintenance obligations at the landfill.
District lawyer John Verkamp on Monday gave board members an update on a hearing that was held June 22 in Little Rock.
First, Verkamp explained that the plaintiffs in the lawsuits against the district in the six counties had filed writs of garnishment against those counties to keep the money from disappearing before taxpayers could state a claim.
That resulted in the waste district’s bank accounts being frozen. Verkamp said he will file a motion to quash those writs so the district could conduct business, but he also said it would have to be approved by three different judges and could even necessitate a court hearing.
At the hearing last Monday, Verkamp said, Judge Fox spoke from the bench about the possibility of doing away with the $18 fee. But the only thing that was definite from that hearing is that the receiver was barred from taking any more action on the appeal before the Supreme Court, giving the other parties involved the option of picking up that process.
Those parties, Verkamp said, included the solid waste district, the Arkansas Department of Environmental Quality or the bond trustee.
Chris Carter, deputy prosecutor who is also representing the Marion County collector, said the bondholders were never joined as a party in the lawsuits. As such, the trustee has no standing to continue on with the appeal.
But Treece, attending the board meeting via internet, said there is some case law that could allow for the bond trustee to file a motion to intervene in the case and pick up the appeal process.
Board chairman Fred Woehl said the district has been out a considerable amount of money on the trial process and preparation for the appeal. He asked if there might be a scenario where that money would be given back to the district.
On the contrary, Verkamp said, if the trustee picks up the appeal and is successful, there is a chance that the district could be ordered to pay the trustee’s legal fees as well.
Carter suggested that the board might want to have Verkamp file a motion on behalf of the district for any money it might be due from previous fees. But Woehl said the board by voice vote earlier this month had opposed the $18 fee, so Verkamp wouldn’t be asked to file that motion.
Baxter County Judge Mickey Pendergrass made a motion that the solid waste district would not take up the appeal. The motion was seconded by Bull Shoals Mayor David Nixon.
Treece told board members they should considering moving forward with the appeal. He said a portion of the $18 fee also paid the district about $100,000 a year to maintain the landfill after it was closed.
If the appeal is successful and the $18 fee is ruled to be constitutional, the district could modify the amount of the fee to be less. ADEQ could back off of its original plan to collect about $16 million it paid to close the landfill, the amount of the fee would only have to cover paying off bondholders and a maintenance fee for the landfill.
Verkamp said that it would be an about face move for the district to suddenly support the $18 fee after the vote earlier this month.
Marion County Judge John Massey called for the question on Pendergrass’ motion to not support the appeal. The vote was unanimous in favor of the motion.