FARMINGTON — A multimillion dollar golf course surrounded by homes worth an estimated average of $200,000 is at the center of disputes over a faulty community sewer system, environmental regulations, property rights and money.
Either a land grab is underway to take real estate from Valley View Golf LLC, or the golf course’s owner is trying to make a profit from homeowners who need a working wastewater treatment facility, attorneys say.
Millions of dollars are at stake as attorneys fight over whether two ponds located on the golf course’s property are part of the golf course or part of the permitted system for operating the community sewer, which serves nearly 500 homes. The system, which was run by the Washington County Property Owners Improvement District No. 5, was designed to work in tandem with the golf course, according to court documents.
But in January, the system stopped operating after the state environmental permit expired. By March, the Arkansas Department of Environmental Quality found overflows.
Joe Stewart, who owns the golf course and who lives in Valley View, was the improvement district’s chairman until he resigned this spring. The agreement for the subdivision to use the golf course ponds was “breached when the district failed to make the required payments,” Donald B. Kendall, who represents Stewart, said in an email.
In April, a nonprofit group took charge of the system and has asked the county to appoint new board members for the district.
Meanwhile, attorneys said a new proposal presented by Stewart’s attorneys would allow treated effluent back into the two storage ponds located on the golf course. The state permitting process, currently stalled, could proceed if that happened, court records show.
The deal would cost homeowners another $30 to $40 per month on top of the roughly $40 per month they pay now for sewer service, said Jerry Kopke.
Kopke is the Arkansas state coordinator of the nonprofit organization Communities Unlimited, which the court put in charge of the wastewater treatment facility.
Stewart, acting as the improvement district chairman, made an agreement for the district to pay his golf course to take the district’s wastewater and use it to water the course, according to court records. That contract was reached in 2004 when Stewart bought the property, records show.
Kopke called the agreement “self-dealing” on Stewart’s part.
No agreement has been reached on the latest proposal, Kendall said. John Peiserich, an environmental attorney representing the golf course, said Kopke’s attorney hasn’t responded to their proposal.
“We’ve tried to cooperate and help them along, and they can’t seem to move forward,” Peiserich said.
Kopke said Communities Unlimited is investigating other options, including pursuing a state permit to discharge into a nearby creek that leads into the Illinois River or to connect to sewer in Farmington, about 5 miles away. Both options are expected to be expensive, Kopke said. He had no cost estimates but said it would cost millions to connect to the Farmington system.
FINES AND LEGISLATION
The fight over Valley View’s community sewer system has spilled out of the court and into county and city government.
The Washington County Quorum Court reinstated an ordinance in April that requires the county to have financial oversight of community sewer systems. Renee Biby, county public utilities coordinator and grants director, said the ordinance isn’t specifically because of Valley View, but the subdivision is an example of what can go wrong when there is no financial oversight.
The county might have used its financial oversight to force the district over Valley View to set aside money for maintenance, Kopke said.
Valley View golf took over the system in 2005, and homeowners paid about $45 per month for sewer per home, Biby said. The number of homes has grown over the years, so it’s unclear how many homes existed each year, she said in email. Officials and documents say the fees recently have totaled roughly $200,000 per year.
Kopke has questioned the district’s finances under Stewart.
“There’s no accounting to where that money went,” he said.
Stewart’s attorneys said the facility was never profitable and always was supported by the golf course. Stewart hired an engineer and discussed a plan with the state environmental agency before Kopke took over, they said.
The state Legislative Audit division is auditing the district’s books and plans to release a finding Sept. 15.
The district faces a separate lawsuit filed in August 2015 by Environmental Quality, which includes more fines, records show. The district faces $420,000 in penalties. That case is set to go to trial Sept. 26 and 27.
Homeowners have said they worry those fines will eventually go to them, but Kopke said that’s unlikely. The state agency would not answer questions about the fines, citing ongoing litigation.
Separately, the state has $38,000 in fines levied against Valley View Golf connected to watering its course from the ponds on its property this past June, agency records show.
Stewart’s attorneys said the ponds are part of the golf course, not part of the wastewater treatment facility, so a permit is not needed to operate an irrigation system. The state agency wanted proof the ponds are not part of the system, according to its violation notice.
MONEY AND ENVIRONMENT
Homeowners continue to worry over health concerns related to the sewer system and property values, they said.
The golf course’s club house, on roughly 18 acres, is worth about $2 million, county property records show. Considering all the property — roughly 200 acres split between Prairie Grove and Farmington — that value is at least $4 million, Peiserich said.
The ongoing sewer issue has stalled development around the golf course but hasn’t slowed sales of existing homes, said Kathy Braly, executive broker at Legend Realty in Farmington.
About 10 homes, ranging from $149,900 to $357,000, were listed for sale in Valley View as of last week. That number is not unusual for a subdivision the size of Valley View, Braly said.
Not everything is about property and money, said Ashley Kapella, a homeowner. The state environmental agency has noted infractions related to the system for years, according to a 2014 administrative order from Environmental Quality.
Kapella recently complained to the state agency, records show. She said she also called the Arkansas Department of Health. Kapella lives near hole 15 on the golf course, and when the course waters with its sprayers, some of that effluent comes into her yard, she said.
“Our kids can’t play in the yard,” she said.
Peiserich said recent state-approved water tests showed effluent from the two ponds on the golf course meet or exceed state standards and is safe. Environmental agency spokeswoman Kelly Robinson would not confirm whether the water now meets state standards.
The golf course began watering with the ponds again this past June, setting off another chain of complaints, agency records show.
County Attorney Steve Zega said the county wants the ponds cleaned. Waste likely settled into the bottom of the ponds and could come back when the ponds turn over, he said.
Peiserich said the water was processed effluent. Stewart is not responsible for remediation, his attorneys said.
“It’s been disinfected. It’s been through all of the process,” Peiserich said. “The system was operating and running when the water was transferred into the golf course pond. They just act like it was taken over in a bucket and dumped in there.”
LOOKING FOR A SOLUTION
It could take a year or more for Valley View’s system to restart, Kopke said.
The entire system must be re-permitted by the state, he said. Neither the golf course nor Communities Unlimited have a permit.
The subdivision’s wastewater treatment facility is worth up to $5 million but is in poor shape, Kopke said. The doors to the emergency generators were rusted shut when he took over, he said.
The nonprofit group approved itself for a $100,000 loan to work on the facility. Once the system is turned on, the wastewater will go through a treatment process that includes ultraviolet filtration, he said.
For now, it pumps filtered wastewater from three subdivisions into a nearby lagoon — about 2 million tons so far, Kopke said. The wastewater is taken to Prairie Grove for treatment, he said.
Emptying the lagoon costs Communities Unlimited about $79,000 each time, court records show. It has been emptied twice this year and a third time is planned, Kopke said.
Homes served
The community sewer system serves about 490 homes in three subdivisions: Valley View Estates, Meadowsweet and Walnut Grove Acres subdivisions.
Source: Staff report
Fast fact
Washington County approved the Washington County Property Owners Improvement District No. 5, which became a public utility that oversaw the community sewer system for the Valley View subdivision, around 1998.