Lawsuit filed against MRID and City of Horseshoe Bend
A civil lawsuit was filed against the Municipal Recreational Facilities Improvement District (MRID) No. 80-1 of the City of Horseshoe Bend and City of Horseshoe Bend in Izard County Oct. 6.
The recent increase of the annual levy of the assessment of benefits paid by citizens was the cause for the suit, according to suit documents, filed by Eric Graetz on behalf of himself and all other taxpayers similarly situated.
Graetz stated in the suit, the MRID was established by the City of Horseshoe Bend in 1981 through an ordinance and was established as a way to receive a gift of real property from the then, Horseshoe Development Company, who had filed for bankruptcy.
The real property included several lakes, parks, golf courses, recreational centers and other amenities.
At that time, the original commissioners utilized the services of an assessor who appraised the benefits now under the control of the MRID.
As no additional appraisals of the assessment of benefits has taken place since the initial appraisal for the MRID, Graetz noted the levy of assessment of benefits was set with the purpose to expire.
“The district through its three appointed commissioners, accepted gifts as certain improvements or facilities on behalf of the property owners within the district. Upon deciding to accept all the improvements as gifts, the district is authorized to appoint an assessor who shall assess the benefits that will accrue to the landowners as a result of the improvements,” the suit stated. “As an example for illustrative purposes only, if parcel #1234 was worth $100 prior to improvement being received by the district but would be worth $2,100 after having access to these improvements, the assessed benefit to parcel #1234 would be $2,000.”
In February of 1981, the initial assessment of benefits was made by the district’s appointed assessors and adopted by the original commissioners.
“Since 1981, the 1981 assessment has been the basis for any annual tax levy that was applied against the assessed benefit associated with that parcel. Under the 1981 assessment, the assessed benefit was determined to be $1,950 for an individual owner’s basic lot. Each year, the property owners pay down that amount through the payment of annual installment,” the suit states. “Since 1981, the district has not added any other improvements. In fact, some of the improvements received as gifts in 1981 are no longer operational or functional. In addition, two amenities have been sold and others have been demolished.”
The suit goes on to allege that as it is currently structured, property owners are able to pay off their portion of the assessment of benefits at which time, collections should cease for that particular property owner.
“Beginning in 1981, the defendants levied an annual installment in the amount of 2.2 percent of the assessment of benefits each year ($49.90). If the levy amount remained constant, the assessment of benefits would be exhausted in 2025, however; in 2001, the defendants increased the levy amount by $20 per parcel... For a basic improved lot, which carried an assessment of benefits in the amount of $1,950, the increase resulted in the annual levy percentage going from 2.2 percent to 3.2 percent.”
In November of 2005, the increase was repealed and a new levy was set at 2.65 percent each year following until August of 2020, when the city approved a further increase.
The assessment of benefits is separate from the millage rates property owners pay in taxes.
It is acknowledged that some properties are delinquent or assessment of benefits have not been paid on certain properties in the MRID.
“Arkansas law prohibits the defendants from levying an amount in excess of the assessed benefits. While acknowledging that some delinquent properties have not paid the assessment of benefits, the assessment of benefit applied to the plaintiff’s properties and all other similarly situated property owners was exhausted by previous levies against the assessment of benefit or are set to be exhausted if Ordinance No. 2020-04 is allowed to go into effect,” the suit states.
In the relief sought section of the suit, Graetz and all other property owners similarly situated, requested a jury trial and for the annual installment against the assessment of benefits completely exhausted for properties that are not delinquent and prohibiting the district and city from any further extension and /or collection of a levy against the assessment of benefits for parcels that have paid each year’s annual installment.
Additionally, it is requested that the parcels which have paid their portion of the assessment of benefits be identified, as well as the remaining amount owed on the parcels of land located in the MRID.
Judge Holly L. Meyer, of the 16th Circuit Division 1, has been assigned to the suit.
No court date has been set at this time.