APPEAL
FROM THE PULASKI COUNTY CIRCUIT COURT, THIRTEENTH DIVISION
[NO. 60CV-15-3961] HONORABLE W. MICHAEL REIF, JUDGE.
Bell
& Boyd, PLLC, by: Michael W. Boyd and Karen Talbot Gean,
for appellant.
Leslie
Rutledge, Att'y Gen., by: Patricia Ann Ausdell, Ass't
Att'y Gen., for appellee Dennis Milligan.
Rose
Law Firm, by: James M. Fowler, Jr., and Stephen N. Joiner,
for appellees Larry Atkinson and Selena Blair.
WAYMOND M. BROWN, JUDGE
In
1992, the City of Magnolia ("Magnolia" or "the
City") had to close its landfill after the Environmental
Protection Agency found chemicals and other contaminants in
the groundwater of the surrounding land. The Magnolia
landfill was Columbia County's largest in the area,
receiving most of the trash collected from the other cities
in Columbia County as well as from the county itself. With
the landfill closing, Magnolia, the county, and the other
municipalities urgently needed to find a new way to dispose
of their trash.
To
solve the problem, the General Assembly amended the tax code
to allow local governments to levy sales and use taxes to
finance the operation, maintenance, or rental expense of a
solid waste management system.[1] The county followed with an
ordinance that levied a one percent sales tax throughout the
county and called a special election for approval of the tax.
Additionally, the county and the cities entered into a
cooperative agreement to establish a county-wide solid waste
management system that would be administered by the county
quorum court and financed through the 1 percent tax.
The
voters of Columbia County approved the tax on April 21, 1992.
Appellee Dennis Milligan ("Milligan" or "the
Treasurer") thereafter remitted the proceeds of the tax
directly to the county.
The
unified solid waste management system worked well until 2015,
when Magnolia filed a petition for a declaratory judgment
against Milligan, county judge Larry Atkinson, and county
treasurer Selena Blair.[2] Magnolia argued that it was entitled to
its per capita share of the revenue from the sales and use
tax. According to the City, the cooperative agreement, in
which the county and each of the cities pledged their share
of the tax revenue to the solid waste management system, was
repealed by an ordinance that the county quorum court enacted
in 1998. Magnolia argued that in the absence of a cooperative
agreement or other voter-approved means of directing all the
tax proceeds to the county, Arkansas law required the
Treasurer to remit Magnolia's per capita share of the
proceeds from the sales and use tax directly to the City. The
circuit court disagreed and granted summary judgment in favor
of Milligan and the County Appellees. We affirm.
I.
Facts and Procedural History
On
March 16, 1992, shortly after the General Assembly amended
section 26-73-113 to allow the proceeds of local sales and
use taxes to be used to finance the operation, maintenance or
rental expense of a solid waste management system,
[3] the
Columbia County Quorum Court passed Ordinance 92-2 to levy a
sales and use tax for that purpose. The ordinance explained
the need for the tax, stating that "the Magnolia
Municipal Landfill into which Columbia County deposits solid
waste from the residents of Columbia County is currently at
capacity and will, in the immediate future, be closed down by
governmental entities[.]" Consequently, "Columbia
County and the municipalities will need a means of
collecting, disposing of, and hauling solid waste from
Columbia County to other locations[.]" The ordinance
also provided that the county would be responsible for the
new solid waste collection system, declaring that "it
[was] the desire of Columbia County to provide weekly door to
door pickup for all residents of Columbia County and for
residents of each municipality in the County and to provide
for the disposal of such solid waste in an environmentally
safe and acceptable manner[.]"
Noting
also that Columbia County "wish[ed] to finance . . . a
solid waste management system to deal with all aspects of
solid waste within the county and municipalities[, ]"
the ordinance levied "a sales and use tax . . . at a
rate of one percent (1%)" on goods sold within the
county. The ordinance further provided that the county
"wish[ed] to dedicate all proceeds of the sales and use
tax" and "use such proceeds for the purpose of
developing within Columbia County a Solid Waste Management
System." Among other duties, the new solid waste
management system would "administer[] the proceeds from
the sales and use tax[.]" The ordinance also made it
clear that the proceeds of the tax would be used only for
solid waste management, providing "[t]hat all revenues
derived by the County or the municipalities from the proceeds
of such tax are designated for use in solid waste management
and for no other reason or purpose."
Ordinance
92-2 also called a special election to approve the tax and
provided that the official ballot would read as follows:
For Adoption of a One Percent (1%) Sales and Use Tax within
Columbia County, Arkansas, To Be Used Solely for Solid Waste
Management.
Against Adoption of a One Percent (1%) Sales and Use Tax
Within Columbia County, Arkansas, To Be Used Solely for Solid
Waste Management.
Finally,
Ordinance 92-2 declared that cities and counties would enter
into a cooperative agreement, called an interlocal agreement,
regarding the solid waste management system. In particular,
section 5 of the ordinance provided as follows:
Each governmental unit within the County which is entitled to
receive a proportionate share of the revenues derived from
the sales and use tax shall authorize, by appropriate action
of its governing body, the approval of and the entering into
of an interlocal agreement with and among the other units for
the purpose of assigning all revenues from the sales and use
tax, to which each governmental unit may be entitled, to the
authority for the use by the authority of solid waste
collection, disposal, recycling, and compost facilities.
Provided, further, that all such governmental units shall
execute and deliver such interlocal agreements prior to the
date of the special election[.]
The
county judge and the mayors of each city-including
Magnolia-signed the interlocal agreement on March 23, 1992.
The agreement declared that all the parties determined that
the sales and use tax, which was "pledged for solid
waste management purposes and no other," was "the
best means of financing a solid waste management system for
all persons residing within Columbia County[.]" It
further declared that the parties
determined that all proceeds of the sales and use tax, which
may otherwise be receivable by them for revenue purposes,
should be pledged to the County for use by the County in the
development of a solid waste management system[.]
The
agreement also made it clear that the parties intended that
the county would be responsible for administering the solid
waste management program and tax proceeds, stating as
follows:
[T]he County Court of Columbia County has undertaken
responsibility to form and administer a solid waste
management system on behalf of all of the citizens of
Columbia County and to disburse funds derived from the sales
and use tax solely for the purpose of solid waste management.
They
agreed, therefore, that the solid waste management would be
financed from the proceeds of the sales and use tax and that
each party "consent[ed] to the pledge of any
proportionate shares of their proceeds which they may be
entitled to otherwise receive and the payment of all proceeds
of such tax into the solid waste management system to be
administered by the County Court of Columbia County,
Arkansas." The voters subsequently approved the sales
and use tax on April 21, 1992, and the Treasurer thereafter
remitted the proceeds of the tax directly to Columbia County.
On
September 4, 1998, the quorum court in Columbia County
enacted Ordinance 98.9 to amend the purpose and use of the
sales and use tax. The ordinance provided that 25 percent of
the total net collections would be used to retire bonds that
Columbia County issued to finance a new county jail.
Ordinance 98.9 also called a special election on the question
of the changed use and purpose.
The
voters in Columbia County approved the proposed 25 percent
diversion on October 8, 1998, whereupon the quorum court
enacted Ordinance 98.15. The new ordinance amended Ordinance
92-2, which originally levied the sales and use tax, to
authorize the pledge of 25 percent of the net proceeds of the
tax to retire the bonds for the new jail. Ordinance 98.15
also repealed section 5 of Ordinance 92-2, which required the
cities and the county to execute the interlocal agreement
pledging their shares of the tax proceeds to the new solid
waste management system. According to Ordinance 98.15,
"all Net Collections are paid directly to the County
under the Authorizing Legislation and are not divided among
the County and any municipalities therein"; therefore,
"Section 5 of Ordinance No. 92-2 is hereby repealed and
deleted."
Several
years later, on June 23, 2015, Parnell Vann, the mayor of
Magnolia, wrote a letter to Milligan "to request that
[his] office remit to the City of Magnolia its per capita
share of the proceeds of Columbia County's one percent
(1%) sales and use tax levied under Ark. Code Ann. §
26-73-113 for solid waste management." The mayor claimed
that "Magnolia's portion of the tax was paid to
Columbia County pursuant to a Solid Waste Management System
Interlocal Agreement," which "pledged each
city's portion of the tax to solid waste management and
authorized the county to act as the agent for all the cities
in developing and administering a solid waste management
system."
Mayor
Vann told the Treasurer that "Columbia County [recently]
repudiated the interlocal agreement and [has] taken the
position that it was repealed in 1998 by Ordinance
98.15." The mayor also pointed out that "the 1992
and 1998 ballots were silent as to any method of distribution
of the tax." Therefore, according to the mayor, Magnolia
should start receiving its share of the tax proceeds under
b)(2)(B)(i) (Supp. 2017), providing that
[i]f the ballot is silent on the method of distribution [of
the proceeds of the sales and use tax], it shall be per
capita among the county and each municipality located within
the county unless an interlocal agreement is executed between
the affected county and its municipalities indicating a
different distribution.
Consequently,
Mayor Vann requested that the Treasurer "stop remitting
the City of Magnolia's share of this tax to Columbia
County and instead remit the ...