Restraining order prohibits state retirement system from taking county funds


The Arkansas Public Employees Retirement System will not be taking more than $86,000 from Jefferson County next month, as it had said it would do to cover benefits and interest it says is owed to a man who the county says was never a county employee.

On Friday, a Pulaski County circuit judge granted a temporary restraining order prohibiting the retirement system (A.P.E.R.S.), its agents, employees, attorneys, directors or officers from collecting the money, and also prohibiting the Arkansas State Treasurer from taking any action to collect the money based on the A.P.E.R.S. claim.

At issue is a claim by the retirement board that J. Y. Williams, who worked as director of community development between 1980 and 1986, was a county employee. The county has denied the claim a number of times since the issue first emerged more than a year ago.

The order will be in effect for 28 days and both sides were urged to get together and present the court with a new and substituted order within that 28-day period, setting forth what the court called “a reasonable deadline and a date at which the A.P.E.R.S. Board will hear the Plaintiff’s (Jefferson County) case and any other issues the parties feel is essential.”

That order indicated that while the retirement system and state treasurer would suffer “no immediate harm” if the order was granted, the county would suffer “immediate and irreparable harm” if it were not granted.

A petition filed last Thursday seeking the temporary order said that if it was not granted, the county would be forced to shut down the road department and put 41 employees out of work since the money A.P.E.R.S. is attempting to take comes from state turnback funds that fund road department operations.

On a monthly basis, the county receives between $120,000 and $130,000 in turnback funds from the Arkansas State Treasurer , according to the petition.

“Simply put, the Jefferson County Road Department will be unable to operate at all until such time as the State Treasurer continues remitting monthly turnback funds on a monthly basis,” the petition said. “The county already faces a budget shortfall of over $2 million so it operates with no reserves.”

According to the petition, Williams’ office was created as the result of a federal grant, and it was not an agency of the county, nor a county department.

“At no time during his six years as Director of the Community Development Office of Jefferson County did John W. Williams ever enroll as an employee of Jefferson County,” the petition said. “He was never hired by Jefferson County, he never had an employee’s personnel file, no federal or state taxes were ever withheld from any payroll. He was never considered as part of any county payroll, and clearly, no A.P.E.R.S. benefits were deducted from his salary, as he never had salary issued from county funds.”

The petition indicates that the county believes that if the issue goes to court, or is heard by the retirement board, the county will prevail.

“Jefferson County believes, based upon the documents that it has reviewed, that either the A.P.E.R.S. Board of Trustees or this Court would find in favor of the County, that Mr. Williams was never a Jefferson County employee,” the petition said. “Evidence herein will consist of the the testimony of former County Judges, County Clerks and the County Treasurer that Mr. Williams had his own office, outside the courthouse, that he reported to no one for his duties, that he ran the Community Development Department solely upon his own prerogatives. He relied upon federal funds which were housed temporarily in the Jefferson County General Fund and set aside to be used solely for the Community Development Organization that Mr. Williams controlled.

“Any time Mr. Williams needed funds for expenses for the Organization he would submit an invoice to the County where it was routinely honored,” the petition said. “Mr. Williams used those grant funds to pay social security withholding, but it is unclear at present how he paid his personal income taxes either to the State or the Federal Government and it is unclear how he established the identity number utilized by A.P.E.R.S.”

Attorney C. Burt Newell, who filed the petition for the county, said in the document that “A.P.E.R.S. has taken the position that it will not suspend collection efforts for any amount of time for alleged delinquencies over 30 years old, even given the fact that if it is adjudicated as a final order that A.P.E.R..S position is correct, then it will receive all back benefits plus interest and penalties as provided by Arkansas law.”

Earlier in the petition, Newell makes reference to a letter he received from Gail H. Stone, executive director of A.P.E.R.S., which said “Jefferson County’s position is simply incorrect and flies in the face of the County’s own contemporaneous representation to the federal government.”

Because of that statement, Newell said any further requests for a delay to A.P.E.R.S. or the Arkansas State Treasurer would be “pointless. A.P.E.R.S. will simply contend that Jefferson County is ‘wrong’ and continue to try and seek confiscation of Jefferson County funds.”