Just a little stick

Quorum court to settle ‘ taxed twice’ issue

By Mark Randall

news@theeveningtimes.com

Crittenden County Quorum Court will eliminate the millage collected for maintaining the former Crittenden County Regional Hospital building when it meets in November to set the tax rates.

Justices agreed that the tax was no longer needed since voters passed a one cent sales tax in March to support construction and maintenance of a new hospital, which will be built by Baptist Memorial Healthcare.

“I think we need to take it off because that was a selling point when most of us talked to the people about passing the other tax — that you wouldn’t be taxed twice,” said Justice Vickie Robertson. “I don’t think you tell the people you will remove the millage and then not remove it. I’m sure we have all gotten phone calls from people saying they didn’t agree to be taxed twice.”

The old tax, which is fourtenths of one mil, was enacted in the late 1940s to support maintenance and operation of a county hospital.

Crittenden Regional Hospital went bankrupt and closed in 2014, but the county still owns the building and is still collecting the tax.

The county has collected one million from that tax.

The reason why the court hasn’t already taken the millage off the books is because they had to research how the tax was enacted.

According to County Attorney Joe Rogers, the law at the time the tax was enacted states that if the tax was voted on by the public then it can only be removed by another vote of the people.

However, their research hasn’t turned up any evidence in the county records which shows whether the there was a vote of the people or whether the tax was enacted by the Quorum Court. The Quorum Court has the ability to enact up to five mils without a public vote.

“There is no record in the county books that there was an election,” Rogers said.

“So you can’t actually tell whether there was or not.

That’s important because under the law if it was voted on by the people, to take it off it has to be voted off by the people in a general election, which we couldn’t get on the ballot because of time constraints. So the question becomes do we know for certain it was voted on?” Rogers said if the Quorum Court is the

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Photos by Mike Douglas

Just a little stick

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one who put the tax in place, then they have the authority to take it off.

“We simply don’t know how it got on there,” Rogers said. “If it was put on by the Quorum Court as part of that five mils, the Quorum Court can take it of. And I think the time to do it is in November.”

Rogers said the county could run the risk, however, of a lawsuit being filed if it isn’t eliminated by an election.

“From a legal standpoint, if it did go on as a result of an election — and it would have seemed the law required it — if we took it off without the people voting on that, then you could run the possibility of a lawsuit.

You would think we would win that lawsuit.”

Rogers also raised the issue of whether the county should leave the tax on the books and use the money collected as a reserve to supplement construction just in case the cost to build the new hospital comes in over-budget and there isn’t enough money from the new tax to cover the difference.

“Do you want to take it off at this time until you are certain we have a deal with Baptist on the new hospital?” Rogers asked. “The only reason I say that is under our development agreement with Baptist until such time as the budget comes in, they have an out. We don’t have any reason to believe that will happen. But they have the option not to go forward if it comes in over-budget.”

Under state law, the county must use a contract manager method to build the hospital which means the county must get bids from every subcontractor, as opposed to using a construction manager at risk method where the manager is responsible for getting the bids and bringing the project in on budget.

The county and Baptist have already selected an architect and expect to sign a deal with a contract manager, but will not know the actual cost of construction until the bids come in.

“The problem is you can’t come up with a budget until you have an architect and a contract manager on board,” Rogers said. “And then what happens is the contract manager and the architect get together, formulate the plans, and then at that point they will tell you what it will cost. And at any time Baptist can say yay or nay.

“So I say all this to say that if it came over-budget, we believe we could put that four-tenths of a mil to make it work because it is for a county hospital. So these are the issues out there.”

Baptist broke ground in September on the $25 million hospital which is located on 20 acres on Seventh Street off I-55. The 50,000 square foot facility will include an emergency room, cancer treatment services, and imaging and diagnostics departments.

The one cent sales tax is expected to generate $30 million.

Justice Lorenzo Parker said he understands Roger’s point about possible overages, but agreed with Robertson that the millage needs to be repealed.

“I think we sold the people on the sales tax with the intention that the millage would be removed,” Parker said.

County Judge Woody Wheeless said the money that has been collected can be used to reimburse the county for its expenses to keep the old hospital building maintained.

The county spent $1.8 million to keep the building secured, insured, and the utilities on until it could find a new tenant.

The building has since been leased to Arkansas Department of Community Corrections for a treatment center for non-violent female offenders.

“We know we have a deficit for that property over the last two years,” Wheeless said. “That’s what we are looking at — reimbursing ourselves.”

Parker said he supports reimbursing the county from that money, but isn’t too keen on the idea of leaving the millage in place and using any leftover money in case the project does go over-budget.

“I don’t want to proceed with the intention of going over,” Parker said. “To play Devil’s advocate, sometimes they may not come in under budget if they know there is money laying around. When you know you have a hard line to stick on, sometimes it means you stick to that line.”

Rogers said he is just saying that the millage could be left on and would be a legitimate use of the funds in case they needed it to make the deal with Baptist work.

“I think it is a business decision by the Quorum Court,” Rogers said.

Wheeless said he is confident the cost to build the new hospital will not exceed their budget, however. “We’ve met with Baptist several times,” Wheeless said. “What they are trying to do is build a facility that fits the amount of money that it will generate. If it doesn’t work, we will have to scale the hospital down.

We are going to build however much we can afford to build with plans that you can expand.”