BENTONVILLE -- Benton County Judge Barry Moehring denied Cave Springs' request Monday to collect nearly $400,000 in property tax revenue.
Moehring said Monday he ruled in favor of the county officials who are withholding the money: Treasurer Deanna Ratcliffe, Collector Gloria Peterson and County Clerk Tena O'Brien.
"They never voted," Moehring said of Cave Springs' City Council's actions regarding the millage.
Cave Springs can appeal Moehring's decision to Benton County Circuit Court. The council will meet at 6:30 p.m. today at the American Legion, 168 Glenwood Ave., to consider appealing the decision, Mayor Travis Lee said.
"Surely the council will vote to do an appeal," Lee said. "I can't imagine why they wouldn't."
Councilman Larry Fletcher said he was disappointed in the ruling, but added he understands the arguments on both sides.
"We have to reassess our position on whether or not the council wants to appeal that decision," Fletcher said.
The ruling was another recent setback for the city. Benton County Prosecutor Nathan Smith announced last week he has asked the Arkansas State Police to investigate alleged financial wrongdoing in Cave Springs reported in a recent legislative audit.
O'Brien was contacted in March by someone who claimed Cave Springs hadn't adopted a millage for 2016, according to filings.
Cities and school districts must approve and then notify the county each year of the property tax millage they intend to levy. All the millages are in an ordinance adopted by the Quorum Court in November.
O'Brien found the document provided to her by Cave Springs was a copy of the city's 2015 millage resolution. The only difference between the 2015 resolution and the 2016 resolution submitted by the city was a handwritten resolution number.
The three county officials asked for the County Court to decide whether the city properly adopted the millage and the amount, to determine what they should do with revenue already collected and to dismiss them from any liability to the city. Moehring presides over county court in his role as county judge.
The county sent the city $10,907 in 2016 payments before the discrepancy was found. The county has held tax receipts pending the resolution of the case.
Justin Eichmann, city attorney, said in a hearing in County Court on Friday the millage would bring in an estimated $400,000, which is about one-quarter of the city's budget.
Eichmann argued minutes of City Council meetings detailed discussions of a proposal to lower the millage showed the council intended for it to remain at the 2015 level of 5 mills. He said the city's budget, which shows revenue from the millage at that rate, was another indicator of the council's intent.
Eichmann said Friday state law doesn't require an ordinance or a resolution, only the council "make out and certify" the tax levy, and the minutes and budget show the council wanted it to remain the same.
"I appreciate the careful consideration that Judge Moehring gave to this issue," Eichmann said. "I disagree with the decision, however, as I believe that the city met the basic requirements of the law."
George Spence, county attorney, argued the council had a greater responsibility. Spence said at Friday's hearing the council had to vote, that vote had to be recorded and that record submitted to the county in order to meet the requirements of the law.
Moehring said he had asked Spence, as the prevailing attorney, to draft an order that he will review and sign.
NW News on 08/08/2017