Arkansas Online

Judge temporarily blocks sale of Perla water to a Benton-based utility after lawsuit.

Temporary injunction extended in suit over city management’s handling of deal

JOSEPH FLAHERTY

A circuit court judge has temporarily blocked the sale of the massively indebted Perla water and wastewater system to another water utility based out of Benton after a lawsuit filed on behalf of a Perla ratepayer.

Circuit Court Judge Stephen Shirron of the 7th Judicial Circuit, which covers Grant and Hot Spring counties, issued the temporary restraining order on Monday.

During a preliminary injunction hearing Tuesday at the Hot Spring County courthouse in Malvern, Shirron agreed to extend the temporary injunction and scheduled a hearing for Friday morning to discuss the issues further.

The lawsuit was originally filed Thursday on behalf of Shelia Gregory by attorney Chris Burks of the firm wh Law.

It named the city of Perla and Mayor Raymond Adams as well as City Council members.

The complaint claimed the sale to the Southwest Water Users Public Water Authority in Benton was illegal because Perla had failed to follow the Arkansas Freedom of Information Act’s public-notice requirements before the Nov. 24 meeting at which Perla’s mayor received authorization to enter into the sale contract.

The day after the lawsuit was filed, Burks submitted an amended complaint that went further.

In addition to the Freedom of Information Act violations, the new complaint claimed Perla had created a nuisance and violated the Arkansas Solid Waste Management Act; as a result, Gregory requested a receiver be appointed “to invest in the system, abate the nuisance, and protect the users,” the complaint said.

The complaint asked for Central Arkansas Water, the regional water utility that serves the Little Rock area, to be appointed as receiver.

The sale to Southwest was meant to close by the end of this month, according to previous testimony in the court fight between Perla and neighboring Malvern.

Malvern for years has sold water on a wholesale basis to Perla, a small community of just a couple hundred people directly to the east. Perla’s water and sewer system reportedly has some 800 customers, meaning many ratepayers do not reside within city limits.

In 2018, Malvern sued Perla and the Perla Water Association for an unpaid water bill that has since ballooned to roughly $355,000, though the larger city has yet to stop supplying water to Perla’s customers, Malvern Mayor Brenda Weldon testified in court last week.

Attempts to sell the troubled Perla system in the past have fallen through.

Last week, Shirron heard testimony on a motion by Malvern that the Perla system be placed into receivership with Central Arkansas Water.

The mayors of Malvern and Perla took to the witness stand, as did Tad Bohannon, the chief executive officer of Central Arkansas Water, and Jason Temple, the president of the Southwest board.

Following the two days of testimony and arguments from the attorneys representing Malvern and Perla, Shirron on Thursday denied the request for receivership. However, he granted Malvern’s motion for summary judgment and ordered Perla to pay its debt to the larger city.

During the preliminary injunction hearing before Shirron on Tuesday, Burks questioned Gregory about the issues plaguing the Perla system, including boil orders and raw sewage left on the ground, and then called another ratepayer who was present in the courtroom to testify briefly.

Court records show Adams was served with the lawsuit and temporary restraining order on Monday.

When reached by phone Tuesday afternoon, Temple, who also serves as the public works director for Hot Springs Village, said he had not discussed the injunction with his attorney.

Nevertheless, he added that “we do intend to move forward if we can, and if there’s a way to do that. It’s unfortunate; we’re trying to help the Perla water customers and the city of Malvern like anybody else would. But we’ll just have to wade through this and see if we can’t get this resolved.”

Arkansas

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2021-12-08T08:00:00.0000000Z

2021-12-08T08:00:00.0000000Z

https://edition.arkansasonline.com/article/282016150620227

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