HISID loses incorporation bid


“It was a very successful year,” District Manager Lawrence Blood stated at the year’s last meeting. The district repaired damage from a landslide, fixed leaks in the water system, refurbished the marina and repaved pathways at the golf course. There were, however, two issues that did not go in favor of the district.

Incorporation denied

The Holiday Island Suburban Improvement District Board of Commissioners began 2018 preparing for the community possibly being incorporated. Commissioners planned for splitting municipal responsibilities between a new city government and HISID.

The hearing for incorporation was Feb. 23 with County Judge Sam Barr presiding. Wesley Stille represented the case for incorporation, and explained that 896 residents, or 82 percent in what would be the town limits, had signed a petition in favor of incorporation versus 126 people, or 11 percent, who opposed. Seventy-five people were undecided.

Residents opposing the plan also addressed Barr. James Loomis said, “God bless these people, but they don’t know what they’re getting into.” He said there was already an infrastructure in place paid for by assessments, and a new city council would have to levy additional taxes to complete the transition to being a municipality.

Commissioner Dan Kees pointed out that state law presupposes the SID would not last forever. He said benefits would be exhausted by 2035 and even before then assessments would be capped. There were other speakers pro and con, and in the end Barr said he would decide in a week to ten days.

Barr decided against incorporation for three reasons. One was a change in state law that occurred while the incorporation committee was already developing its plan. The legislature had amended a law to read, “The court shall not approve the incorporation of a municipality if any portion of the territory proposed to be embraced in the incorporated town lies within three miles of an existing municipal corporation.” A section of the intended incorporated area would have been within three miles of the town of Beaver, and the committee had been unaware of the change in the law.

Barr also stated the petition for incorporation was unclear regarding the method of incorporation – whether by direct petition or by ballot in an election – or how the new community intended to finance itself.

District Manager Lawrence Blood commented the petition had stated clearly that signers of the petition wanted to incorporate, not hold an election. He also mentioned Barr had not asked during the hearing for clarification regarding how the new town would fund itself.

However, Blood commented, “Despite the setback this ruling and change in law has caused, the Incorporation Committee continues to believe that incorporation is vitally important to the future of Holiday Island. The Committee has committed to continue working to address the new obstacles to Incorporation.”

Clarifying who votes

Blood told the board in February the law regarding voting for SID commissioners was vague and had resulted in a lawsuit. Confusion arose from disagreement about how many votes part-time residents in a timeshare or properties owned by a management corporation would get. A court had recommended HISID seek a legislative change to rectify that sticky wicket.

The dispute had come from the Table Rock Landing Owners Association, representing timeshare owners, requesting 56 absentee ballots, or two votes each for 28 timeshare units. They claimed timeshare owners were property owners, and therefore HISID had violated their statutory right to notice of an election and their right to vote. Also at issue was the HISID requirement that all nominees and voters be current on their assessments and utility bills.

HISID disagreed that all timeshare owners were property owners. Blood explained that following that logic would mean the 28 timeshares could have a different “owner” each week multiplied by 51 weeks, holding back one week every year for cleaning, therefore equaling 1428 property owners in those 28 timeshares. Therefore, the timeshare owners, who collectively own fewer than 10 lots and have only one-week-a-year interests in those lots, would command nearly one-third of the votes in the election.

The opinion from the court, however, stated a timeshare owner satisfied the definition of property owner because they are assessed a fee, though indirectly, toward improvement of the district, and “it would be unfair to prevent them from having a voice… We hold that individual timeshare owners have a right to cast a ballot in commissioner elections.” The opinion also declared the requirement that voters not be delinquent on assessments and utility bills was invalid.

Attorney Matt Bishop urged the board to appeal. Developer Tom Dees contended timeshare owners should get a vote and the entire board should be recalled for violating the law. Kees countered Dees by pointing out the district might have to hire someone just to search for the names and addresses of all the timeshare owners.

Blood maintained he would abide as best he could by whatever he was told by the courts. “We’ll conduct the election openly, honestly and fairly,” he insisted.

Dees responded, “I don’t see what the big deal is. Just give us fifty six votes. That’s all we ever asked for. Where’s your common sense?”

“I just want to say I don’t want votes in Holiday Island diluted by 1428 votes,” commissioner Linda Graves commented, and moved they ask Bishop to appeal to the Court of Appeals and the Supreme Court. Commissioners unanimously approved that motion.

A lower court ruled TRL should get 28 ballots, and both TRL and HISID disagreed with the decision. The Arkansas Supreme Court denied taking the case, so HISID continued to pursue legislative options. Blood said both sides agreed the law needed clarification, and those discussions were ongoing at year’s end.

Other actions

  • A landslide in late spring caused closure of a portion of Stateline Drive. Blood estimated 1.3 acres between the rock bluff on which Holiday Island Drive sits and Stateline Drive down below was impacted. Just to relieve pressure on the slide area, 400 cubic yards of debris was removed, but a previously hidden water source was muddying the middle of the site making work there difficult.

Heavy equipment operators hauled away debris from the hillside and replaced it with double layers of riprap as far as 21 feet from the road up the hillside, and by early June Blood stated the stabilization part of the project was complete, though the mysterious water source remained.

  • A fuel leak at the marina of about 300 gallons had cost the district $83,254 already by early in the year, and Blood said the fuel system should be replaced or put the district at risk for further problems. Blood announced at the August meeting the project to upgrade the fuel system was complete. In October he acknowledged marina operator Kolin Paulk for the impressive list of improvements he made at the marina. In addition, the otters were back.
  • In April, Blood put out notice for anyone willing to try to salvage the deteriorated Yacht Club building to speak up because the board was ready to demolish it. One individual came forward with the concept of turning the building into an arts center, but negotiations dissipated. Blood said the next step would for someone to try to salvage anything worth saving, but if no one came forward, the board had allocated funds to demolish it and turn the property into a green space for picnics and lounging by the lake.
  • Fire Chief Bob Clave announced Air-Evac established a base in Holiday Island.
  • Commissioners at the October meeting declared Kees had been re-elected to the board by acclamation because he was the only person nominated.
  • Also in October, Kees stressed the importance of a long-range plan for handling large projects, in particular, the water delivery system and roads. “We can’t just not do things because we can’t afford them,” he said. “We have to maintain the infrastructure.” He urged the board to make a list of projects and prioritize them. His idea was thinking long-term might allow them to group more than one project together, secure a bond and in the end pay less than fixing one thing at a time.