By: Tammy Curtis, Managing Editor
The much anticipated second hearing on a potential settlement agreement for residents of the Ozark Acres Sub-urban Improvement District ended without an approval by Circuit Judge Rob Ratton on Jan. 27. Several took the stand in the nearly two hour hearing but, due to several motions having been filed with the court in objection to the settlement, a judgment was not finalized. Due to Ratton’s agreement based on Proof of Legal Publication within this news-paper of the hearing, that property owners with the District had not been given the state mandated 30 days notice prior to the hearing being held. The notice was published on Jan.4, making the hearing date of Jan. 27 not passed the 30 day notification requirement for property owners. Ratton granted an Order to Reconsider, allowing Joseph and Heidi Hall, to intervene. The couple filed a counter suit in the case and have objected to the settlement on the grounds that an il-legal exaction, if illegal, should remain illegal, therefore taxes should not be collected on exhausted assessments of benefits for an additional five years, as the original settlement seeks to do. The illegal exaction lawsuit was filed on Sept. 7, 2022 by Ozark Acres resident Debra Lumley against Ozark Acres Road and Street, Recreational, Fire and Ambulance Service, combined known as Improvement District One. Heidi Hall, joined the Jan. 27 hearing via Zoom Hall immediately posed an objection to the hearing due to the date when court first convened. She stated that the judge was fully briefed that the no-tice had not given taxpayers of the district the required time to respond, therefore a judgment could not be made in the case. Hall was given an opportunity ask questions of Lumley. Among the questions were if she was aware if the com-missioners had sought any state or government funding for the SID maintenance, Lumley said she was told there were no options for funding for the SID. Lumley’s attorney Tim Hutchinson’s argument was that Lumley’s filing suit is essentially saving everyone who would still be paying assessments into perpetuity. He reasoned that at least the settlement would be stopping the collection of the taxes after five years via Lumley’s proposed settlement. Lumley took the stand and testified that the proposed settlement was within the best interest of all taxpayers in the District. Joseph and Heidi Hall have also filed a Writ of Mandamus. This is an or-der requesting a court to an inferior government official ordering the government official to properly fulfill their official duties or correct an abuse of discretion. In this case, to prevent the named parties from illegally exacting taxes through further levies after the assessment of benefits have been exhausted. The case further states “to prevent the misappropriation of public funds and for the recovery of an illegal funds exaction, wrongly paid to public officials for law enforcement services and to compel various government officials to perform an act or omit to do an act where such performance or omission is enjoined by law. ”Lumley admitted on the stand she was aware there is a legal statutory process for doing assessments so the SID could continue collecting assessments. This would allow the board of commissioners to have the assessor reassess property in the district since there have been improvements made since the last assessment. Ozark Acres would fall under this as they have constructed of a levy since the last assessment .Hall quoted state statutes in Code § 14-92-228, Ark. Code§ 14-92-229, Ark. Code§14-92-231 and Ark. Code§ 14-92-239 “the amount of the total levies shall not exceed the assessed benefits and interest thereon.” As another part of her objection to settlement. Hall also asked Lumley on the stand if she had contacted tax payers and she indicated only about100.Hall cited, among many reasons, she believes the settlement offer is illegal is because the SID Commissioners have failed to seek state and federal funding as for roads and streets, recreational areas, or fire and ambulance service for the Sub-urban Improvement District as outlined in state law (Ark. Code§ 14-92-236(b)(2) )be-fore seeking the settlement. The court granted taxpayers of the district until Feb.4 (the actual 30 days since publication of the hearing)to file any objections to the settlement to be heard be-fore the court. One resident indicated her objection would be filed Jan. 30, others are expected to do the same. What the original settlement sought.
• Agree that the District has, through the years, levied an amount against the original Assessed Benefits that has resulted in the exhaustion of said Assessed Benefits. However, an immediate cessation of annual levies against the Assessed Benefits could cause significant harm to the class of taxpayers represented in this action. Specifically, class members would be without funds for continued road maintenance, fire protection, and maintenance and operations of District amenities.
•. As such, the parties agree that the levy on the Assessed Benefits shall be permitted through the year2028 (five years). Thereafter, the District is permanently enjoined from levying or collecting any amount against the Assessed Benefits.
• For the years of 2023 through 2028, the District is not permitted to levy an amount greater than eight percent of the Assessed Benefits for any lot located with-in the District. For select lots whose borders do not abutany public road, the annual levy shall not exceed six per-cent. DISTRICT OPERATIONSDURING THE SUNSET PE-RIOD
• Between the years of2023 through 2028, the District agrees to post any and all job openings on a job posting website such asIndeed.com or ziprecruiter.com. Further, the District shall post all job openings at the Ozark Acres Clubhouse.
•. District Commissioners shall appoint a Budget Committee made up of 3-5District residents who shall make recommendations to the Commissioners related to the prioritizing of expenses.
• District Commissioners shall immediately terminate the contract with the Sharp County Sheriff’s office which will result in a savings of approximately $18,000 a year.
• For properties that carry a delinquent assessment of benefits, the District shall, upon purchase by a new owner, waive the delinquency, but shall, going forward, collect the annual assessment of benefit for that property through the year 2028.
• The District shall, within90 days of this Court’s final approval of this settlement agreement make available for review and inspection by District property owners a listing of all properties, as-sets, equipment, materials, and inventory owned by the District excepting only delinquent properties being held by the District and items that are less than $500 in value.
• In order to ensure compliance with this Settlement Agreement through at least the first year, the District’s next election of Directors shall be moved to the second Tuesday of November beginning in 2023 with sub-sequent elections continuing thereafter on the same second Tuesday of November until subsequently modified by action of the Board or until dissolution of the District.
• Any newly elected commissioner shall be required to participate in training or classes offered by the Arkansas Municipal League where-at information regarding the Arkansas Freedom of Information Act and competitive bidding requirements for public contracts are dis-cussed.
• The District shall set aside thirty-thousand dollars ($30,000) of the current reserves for the purpose of engaging any necessary professionals (e.g. attorneys, accountants, signature gatherers and others) to assist with any costs or expenses that will assist efforts toward the incorporation or annexing of Ozark Acres, as determined by the Board of Commissioners.
ENHANCEMENT AWARD AND ATTORNEYFEES
• The District will pay the class representative, Debra Peterson Lumley,$2,500 which represents the amount of out-of-pocket expenses she has incurred as part of this litigation.
• The District shall pay Plaintiff’s attorney’s fees totaling $25,000 which represents the estimated amount of hourly charges Plaintiff’s coin paragraph 14and 15 shall be paid within fourteen (14) days of the Court’s granting final approval of this settlement agreement.
• Plaintiffs’ counsel agrees to cover all costs associated with this action from the attorney fees received herein.
• Upon this Court’s final approval, the Plaintiff will file with this Court a Motion to Dismiss this case with prejudice. Hall prepared a counter offer and posted it for the public to see on the Ozark Acres Facebook Page, but it was taken down shortly thereafter. She sent the counteroffer to the attorneys on Jan.30 and said she feels it best suits the needs of all SID residents. What Hall’s counter offer seeks.
• 2023 assessments of benefits are voided and re-funds given of all payments after Sept. 7, 2022 without necessity to file an application for refund.
• Property owners shall be consulted on the voluntary or involuntary nature of payment. Those without knowledge the assessment of benefits was exhausted prior to their payments may apply for a refund.
• No more assessments of benefits without hiring a district assessor at a salariedrate to do a legal reassessment following the statutory process.
• Property owners wishing to continue assessments have the option to make voluntary donations to the SID.
• Property owners wishing to create an HOA/POA may purchase from the SID property owned by the SID limited to the lakes, Marina, clubhouse and parks, then create a master deed and start their own HOA/POA among the property owners contributing to the purchase or buying in latter.
• The Sid agrees to sell the lake, Marina, clubhouse and parks to property owners association members for$10,000.00 and the property owners opting into the POA waive refunds with the caveat the POA is set up in ac-cordance with the horizontalproperty owner act.
• The SID ends business with American Land Company and sells delinquent property with first right to redeem to foreclosed owners and then offered at a discount to adjacent property owners in exchange for waiver of refunds before offering to the general public at a state land commissioner sale.
• The SID contract with the sheriff ends with a re-quested maximum refund under the statute of limitations to justify Mr Hutchinson’s $25,000.00 fee.
• No funds for annexation or becoming a town absent the collection of the signatures of a minimum of 200eligible voters in the district on a petition. After collecting the signatures of a minimum200 eligible voters the SID may distribute $30,000.00when necessary to complete the legal process.
• The SID will not seek to dissolve until after formal denial of state and federal funding for the roads after properly completing the application process to receive such funding and by unanimous vote by all commissioners who must be duly elected or properly appointed and not fail to file their oath of office within 30 days.
• SID will comply with FOIA requests immediately and without limits.• SID may sponsor 5 community members for up to5 years to join the Municipal league as preparation to become a town but it shall not change requirements for commissioners. Halls second suit, the Writ of Mandamus- has not yet had a ruling rendered on the case. Hall will be making a motion to consolidate the two cases. This news agency will provide updates as they are filed with the courts.