By Becky Gillette – A committee established to study the incorporation of Holiday Island is planning a public meeting soon to present arguments for making Holiday Island a city. Holiday Island was built as a Suburban Improvement District (SID), which is a tool allowed under Arkansas law for a developer to finance necessary costs for a development such as streets, water lines, sewer and other infrastructure.
A SID allows costs of the construction passed on as a lien on each lot. The lien, called an assessment of benefits, remains until it is repaid in full. But once those development costs are repaid, HISID would be left without money to pay for things such as street repairs.
Bill Branum, chair of the Citizens for Incorporation Committee, said a primary reason to incorporate would be to give Holiday Island the ability to continue to maintain infrastructure after the assessment of benefits runs out.
“As assessments run out, something needs to replace that,” Branum said. “That is several years down the road, but it is going to happen. It takes money to run the district. You are going to need some revenue income to operate. If we didn’t have any revenue, if the assessment of benefits ran out, we would become basically dependent on the county to take care of all the streets, water treatment and sewer treatment that take considerable money to operate and maintain. Carroll County isn’t one of the richest counties in the world, so there would be a problem.”
In the past, people didn’t really realize the importance of becoming incorporated, Branum said.
“The impression I’m getting now is that most people seem to be pretty much in favor of it,” said Branum, who has lived in Holiday Island since 1999 when he retired. “Whether they like the idea or not, they realize eventually we are going to have to do that if we don’t want to get backed into a corner and absolutely not have money.”
Being a city would provide the ability to provide police protection and make the city eligible for grants and programs like state turn back funds for roads, public safety and solid waste. Currently, police protection is provided by the sheriff’s department.
Right now HISID has subdivision ordinances that cover fences, building and yard maintenance and building setbacks, but those are difficult to enforce. Branum said the only way they can be enforced is by filing a civil lawsuit, which is expensive.
“For example, if we want to require people to maintain a vacant lot, right now the only way to enforce that is through a lawsuit,” Branum said. “It is ridiculous to file a lawsuit. With a city ordinance, people would have 30 days to clean it up, or we can go clean it up and send them a bill. There are a lot of things besides just money that the city can do that the district can’t do because the district doesn’t have the authority to do it. To me that is one of the bigger reasons to incorporate rather than do it for the money.”
Branum said momentum towards incorporation was building backing the late 1990s before the housing bubble broke resulting in the Great Recession. Now interest is picking back up, Branum and others think it is time for Holiday Island to incorporate.
Wesley Stille, CPA, another member of the Citizens for Incorporation Committee, said a city would have more fair assessments than the SID.
“One disadvantage of assessments is they are not set on property value but property type,” Stille said. “All lots on a paved street pay the same whether one is worth $100,000 and another worth $300,000. There are classifications for houses on paved streets, and unpaved, R-2, R-3, commercial and vacant lots.”
Being incorporated would also allow Holiday Island to receive a portion of sales taxes generated. Stille estimated that might bring in about $201,000 per year. And the city could then, with approval of voters, levy additional sales taxes. But Stille said they are not advocating an additional sales tax as the adoption of a local Holiday Island sales tax would result in the loss of other sales tax turn back funds.
“The end result could be an actual net loss of revenue because of the relatively small retail sales base in Holiday Island,” Stille said. “Therefore, our committee does not see that as a viable option. Also, imposition of a local sales tax could only be done after a positive vote by Holiday Island citizens.”
Stille said the city would have police powers and the ability to regulate traffic and property uses. At one time the Holiday Island Planning Commission did regulate property uses, but it was determined the commission had no regulatory authority to do that.
Opposition to the effort is likely to come from people who fear increased taxes and more regulations. But Stille, like Branham, said the overall goal would be to reduce the overall outlay for taxes and HISID assessment fees.
Previous incorporation efforts for Holiday Island have failed.
“This time we decided if we are going to accomplish this,” Stille said. “We sense there is public support for this and we need to continue on. We have been studying what needs to be done to accomplish it. We have to do public meetings, educate the public as to what would be involved, explain why we feel it is important to do this and get public feedback. We would undergo a petition process. The petition would have to be signed by more than fifty percent of voters. It is going to take some effort. We will have to get canvassers to go and contract people.”
With HISID, only property owners have a vote. With the petition for incorporation, all residents who are registered voters, not just property owners, would get a vote.
Stille also said a city government could apply for grants such as those available for roads, walking trails and biking trails.