School District To Intervene In University Lawsuit

— The Fayetteville School Board on Thursday agreed to intervene in a lawsuit between the University of Arkansas and Washington County to protect the financial interest of the School District.

And, in further action, the board hired attorney Jack Butt, a former board member, to represent the district in the lawsuit.

Both votes were unanimous.

Asked by board member Bryn Bagwell what the cost to the district might be, Butt said it was difficult to estimate but said it could somewhere between $20,000 and $75,000 but the final cost depends on several other factors.

Butt’s fee is billed at $250 an hour but he said there will be many instances when others in his law firm will be doing the work at a lesser hourly figure.

A big question mark is the impact of a similar lawsuit now pending before the Arkansas Supreme Court involving the University of Arkansas for Medical Sciences and the Pulaski County assessor. The issues are the same as the local lawsuit, Butt said.

The University of Arkansas appealed to the Circuit Court following two administrative level hearings, claming the university is immune from property tax or they are exempt from tax on specific properties County Assessor Jeff Williams said are taxable, according to the lawsuit.

Lisa Morstad, chief financial officer for the district, said the district could lose about $165,000 if the university prevails in its lawsuit. That equates to about three full-time classroom teachers, she said.

The district is the largest recipient of property taxes and has the largest stake in the outcome, she said while outlining the recommendation the district intervene.

Further, the university is also asking the court to refund about $243,000 in taxes paid in 2010 and 2011, Morstad said. A majority of that money also would be lost, she said.

The district receives 80 percent of the tax dollars collected from property owners in the district.

“The University of Arkansas and the Fayetteville School District have had a positive relationship for many decades,” Morstad said in her statement. “This request to intervene is simply a disagreement on this particular issue. We appreciate our relationship with the university and the county and will work together for many years to come.”

Bagwell said the relationship between the district and the university should be noted but the district also has a relationship with its residents in fiscal matters.

Butt said intervention means the district can participate in the lawsuit to protect its rights or interest.

“The legal issues don’t change whether the School District is in or out,” he said.

The Washington County Equalization Board and County Judge Marilyn Edwards, in separate hearings, upheld Williams’ decision last year to deny tax exemptions on 45 real estate parcels and businesses operating within university buildings. Some of those businesses are in the newly opened Garland Center where a Clinique cosmetics counter is in the Razorback bookstore; others are in the Arkansas Union or in other buildings around the campus.

Some of the real estate at issues are green spaces and rental properties occupied by students and non-students who rent houses from the university.

Williams has said the situation creates a disadvantage for competing businesses surrounding the campus who must pay property taxes which on-campus businesses don’t.

At A Glance

Homeless Vigil

Fayetteville High School Student Council members, including president Davis Trice, said Thursday the group fell short of its $10,000 goal to help homeless students in the district. The council members, who slept outside in cardboard boxes to raise awareness about homelessness, raised $8,500 during the annual vigil in November. The School Board presented the group with a certificate honoring the effort.

Source: Staff Report

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