CAVE SPRINGS -- The City Council voted Tuesday night to not appeal a decision costing the city almost $400,000.
The council voted 4-2 to go along with a ruling of Benton County Judge Barry Moehring and not appeal it to circuit court. Moehring on Monday denied the city's request to collect almost $400,000 in property tax revenue. He ruled in favor of the county, which has been withholding the money.
The estimated $391,000 represents a quarter of the city's budget, city attorney Justin Eichmann said Friday.
He said the next step is to get an order from the county judge to start the reimbursement process. All the money collected as property taxes on behalf of the city will be returned to residents, he said.
Eichmann said the order should go through in about a week, but refunding the money could take months. Residents may donate their refund back to the city if they so choose, he said.
The county sent the city $10,907 in 2016 payments before the error was found. The county has held tax receipts since pending the resolution of the case. Delinquent tax payments for previous years are not affected, Eichmann said. Those taxes are still due.
Eichmann argued Friday the council did the bare minimum to pass the millage, but Moehring saw it differently. Eichmann said an appeal would cost anywhere from $4,000 to $10,000.
Councilman Larry Fletcher said he thought paying for the appeal was worth it because the city had a 50 percent chance of getting the money back.
Councilman Randall Noblett disagreed with Fletcher and said he thought this case was built on fraudulent charges because the city turned in the wrong millage resolution.
"I can't vote for that," he said.
Terry Rakes, a longtime resident of Cave Springs, encouraged the council to not appeal Moehring's decision because she didn't want the city to pay more money for an appeal. The reasons given by Moehring were thorough enough for Rakes to think a higher court wouldn't reverse the ruling, she said.
Other residents expressed frustration with the council over a lack of transparency about what it intends to do to fix discrepancies that came up in the audit of the city finances.
"Each one of you was selected by the people of Cave Springs, so you need to represent the people of Cave Springs," resident Don Shores said. "I would like to have some answers. You owe the people who put you in your chairs today some answers."
The county is holding tax receipts pending the outcome of the case. The county sent Cave Springs $10,907 in 2016 payments before it knew of the discrepancy with the city's millage resolution.
County Clerk Tena O'Brien was contacted by someone in March who tipped her off Cave Springs hadn't adopted a millage for 2017, according to filings.
Cave Springs failed to submit the correct millage for 2017, and instead turned in a copy of the city's 2016 millage resolution. The only difference between the two was a handwritten resolution number. Eichmann argued in a hearing on Friday the council intended to levy the same millage in 2017 as it did in 2016. The level would be 5 mills. according to minutes from previous City Council meetings.
Cities and school districts have to approve and notify the county each year of the property tax millage they intend to levy. Millages are in an ordinance adopted by the Quorum Court in November.
State law doesn't require an ordinance or resolution, only that the council "make out and certify" the tax levy, Eichmann said Friday.
NW News on 08/09/2017