AG Watching Water Board - KATV - Breaking News, Weather and Razorback Sports

AG Watching Water Board

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ATKINS (KATV) -

The best way to return $350,000.00 to 350 members of a small water users association remains the focus of debate in Pope County.

And now the state's Attorney General is weighing in on the matter.

There are many different ways to distribute money to Southwest Atkins Water User Association members prior to merging with the City of Atkin's water department.

The Attorney General just wants to make sure everything is done legally.

The small, non-profit water association has a plan...and here it is:

If you have been a member for more than two years, you are entitled to a share.

Members for more than one but less than two years get half-a-share.

Members less than one year get a quarter share.

And if you have multiple meters you get multiple shares.

But some residents say this plan doesn't include past customers, doesn't pay longtime customers more than relatively new customers and doesn't comply with IRS regulations.

A letter written two weeks ago expresses concern from the Arkansas Attorney General's office.

It reads in part "...the association may be planning to distribute the surplus funds in a manner that is not fully compliant with IRS rules..." and it instructs the water association's board and attorney to "...refrain from any distribution of assets..." until a plan has been presented that is "...in accordance with state and federal law."

But system treasurer Doyle Cook tells Channel Seven that it would be impossible to comply with IRS rules because adequate records haven't been kept over the association's 29 year history.

Little Rock attorney David Menz is representing the Southwest Atkins Water Users Association.

Menz has reportedly offered assurances that surplus money will not be distributed until the Attorney General's office is satisfied that all laws are being followed.

Air date: June 3rd, 2014