November 21, 2014
10:29 am
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Judge dismisses Solid Waste District's bankruptcy lawsuit



     A bankruptcy lawsuit filed by the Ozark Mountain Solid Waste District in the U.S. Bankruptcy Court has been dismissed. In a ruling issued this week, the court agreed to a motion by the Bank of the Ozarks in Little Rock--the trustee of the bonds that were issued for the purchase of the NABORS Landfill--to dismiss the district's lawsuit seeking chapter 9 bankruptcy status. The ruling by U.S. Bankruptcy Judge Ben Barry leaves in question how the bonds will be repaid, according to Jeff Crockett, chairman of the Solid Waste District Board and mayor of Harrison.
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    The 14-page ruling issued by Judge Barry notes the District funded the purchase of the landfill and related equipment and assets in 2005 with two bonds totaling $12.3 million. In a court hearing May 21st, District board member Tim McKinney testified that upon purchasing the landfill the District experienced problems with the Arkansas Department of Environmental Quality because older parts of the landfill were improperly constructed, resulting in the risk that leachate would contaminate the groundwater if the District did not correct the problem. According to the court ruling, McKinney testified grants received by the District and the $2 per ton tipping fee collected by the District were exhausted on a monthly basis by the efforts to resolve the leachate problem. Compounding the District's financial woes was a decision by many of the Solid Waste District's member counties to take their solid waste to less expensive landfills.
    Despite those problems, McKinney testified the Solid Waste Board--comprised of county judges and mayors from the member counties--never seriously considered levying a service fee authorized by Arkansas law. McKinney indicated board members felt levying such a fee would be unpopular in their counties and would result in them not being reelected to their offices.
    Judge Barry ruled the District is not an improvement district and was not authorized under state law to file for bankruptcy, and did not file the case in good faith.
    Meanwhile, NABORS' assets--including vehicles and other equipment--remain at the landfill and at the former company's site on Rossi Road, but District Chairman Crockett says ownership of the property is unclear.
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    Crockett says he doesn't know if the bank is claiming ownership to the assets or even wants ownership.
    The weekly removal of leachate from the landfill was interrupted last week, according to Crockett, when the six-county District ran out of money. Since then, ADEQ has authorized the District to use a nearly $139,000 recycling grant for the removal of leachate and to pay for security and electricity at the landfill. The funds should be sufficient to allow continued leachate removal.
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    ADEQ Director Teresa Marks, in an email to Crockett on August 5th, said the state agency plans to hire a Field Service Contractor to take over operations at the landfill. The state will open bids for the contractor Monday and hopes to begin the process of closure of the landfill by September. However, she noted the state law that authorizes ADEQ to complete the site closure also requires the state agency to seek reimbursement of the funds.

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