Bank OZK must remit more than $400,000 to the registry of the Carroll County Circuit Court or be fined $500 a day starting Wednesday, Aug. 16, Circuit Judge Scott Jackson ruled at the conclusion of a contentious hearing Tuesday afternoon in Eureka Springs.
The money — $433,987.10 — was collected from Carroll County property owners through an $18 annual assessment imposed by the Ozark Mountain Solid Waste District and included on real estate tax bills for every parcel of property in the county in 2018 and 2019.
The fee was intended to repay bondholders who bought more than $12 million in bonds issued by the solid waste district in 2005 to finance the purchase of a now-defunct landfill in Baxter County. Revenue generated through the fee, which had been expected to continue for 30 years or more, also was intended to repay the Arkansas Department of Environmental Quality for a portion of the costs of cleaning up the discarded landfill.
Fayetteville attorneys Matt Bishop and Wendy Howerton filed successful class-action lawsuits in each of the six counties where the fee was imposed.
Jackson ruled in April 2020 that the $18 fee was actually an illegal tax. That ruling was not appealed and the fee is no longer being collected.
While a portion of the money collected through the $18 assessment has been returned to taxpayers, a total of more than $2 million collected in the six-county region is being held by Bank OZK, trustee for the bondholders.
At the conclusion of a May 23 hearing, Jackson ordered Bank OZK to remit the money collected in Carroll County to the local court registry. Instead, Bank OZK filed a motion to stay enforcement of Jackson’s ruling pending appeal and posted a supersedeas bond that its attorney argued would protect the taxpayers’ interests until the appeal is adjudicated.
During Tuesday’s hearing, Bishop told Jackson that Bank OZK has repeatedly ignored the judge’s orders.
“You’ve told them for four years that the money should come to this court,” said Bishop, who had filed a petition asking Jackson to find Bank OZK in contempt for failing to remit the funds to the court registry.
“This bank has shown this court nothing but contempt,” Bishop said later in Tuesday’s hearing. “… They have disrespected this court for four years.”
After hearing arguments from Bishop and from Lance Miller, representing Bank OZK, Jackson issued his ruling.
“The previous orders of this court have determined the ownership of this money,” Jackson said, announcing his decision to deny Miller’s motion to stay the enforcement of his previous ruling. “… There is contempt of the previous orders of this court.”
Jackson then announced that he would impose a fine of $500 for each day the money at issue is not remitted to the court registry, prompting Miller to ask when that element of Jackson’s ruling would take effect. Jackson indicated that clock would start Wednesday, Aug. 16.
