CAVE SPRINGS -- The city plans to refund about $242,000 to property owners now that the county judge has ruled the money was illegally collected.
The City Council voted Tuesday night to accept Benton County Judge Barry Moehring's decision and not appeal it to circuit court. The city estimated the 5 mills in property tax revenue would bring in about $400,000 in 2017. The tax revenue represents almost a quarter of its budget, city attorney Justin Eichmann said Friday.
He and county attorney George Spence said the next step is to get a formal order signed by Moehring that will outline the refund process. All the money collected as property taxes on behalf of the city will be returned to residents, Eichmann said.
He said the order should go through in about a week, but returning the money could take months. Spence said the refunds will be handled by the county collector's office.
Residents may donate their refund back to the city, Eichmann said, but he doesn't have details yet.
The county sent the city $10,907 in 2016 payments before the error was found. It has held tax receipts since pending the resolution of the case. In all, $242,143 was collected through July 31, according to the collector's office.
Delinquent tax payments for previous years are not affected, Eichmann said. Those taxes are still due.
County Clerk Tena O'Brien was contacted by someone in March who tipped her off Cave Springs hadn't adopted a millage for 2017 as required by law, according to filings.
Cave Springs failed to submit the correct millage for 2017 and instead turned in a copy of the city's millage resolution for 2016. 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 argued in a hearing before Moehring on Friday.
NW News on 08/10/2017
Print Headline: City to refund money to property owners