On Wednesday, August 10, a group of 13 gathered in the Auditorium to discuss establishing a Central Business Improvement District as a strategy for funding ongoing repair and maintenance of Eureka Springs’s century-old tunnel underneath downtown buildings.
The concept came from the two-year hazard mitigation study completed by Craig Hull of the Osage Group and funded by the Federal Emergency Management Agency. Hull first reported to city council in October 2014 that the three most prominent hazards he had identified were the tunnel, the dam at Black Bass Lake, and the sewer system. He recommended creation of an improvement district as a way to share the cost of addressing long overdue repair and maintenance of the tunnel that runs underneath the courthouse and Auditorium to the Grand Central Hotel.
Hull introduced Alan King whose Little Rock company, Improvement Districts, Inc., consults with municipalities throughout the state to set up all kinds of improvement districts, which he called a subset of the city. King said an improvement district is a group of property owners who want to fix something and tax themselves to pay for it and have meetings to determine scope of the project, thereby defining boundaries.
King said an assessor would determine value of the properties within the district, and owners representing two-thirds of the property value within the district would need to sign a petition endorsing the concept. Once this is accomplished, the petition goes to city council and council forms the Improvement District.
The petition would also specify who would serve as commissioners. There would be opportunities for public input.
The tax for property owners would be determined by assessed benefits. Once assessments are settled, there would be a lien on a property until the tax is paid, this improvement district tax would be superior to the property tax.
King also mentioned the improvement district would have the right of eminent domain.
Former alderman Dee Purkeypile, who lives beside the drainage channel leading north from the tunnel, asked where the improvements would be. Mayor Butch Berry replied that the boundaries have not been determined yet because this was only the second meeting. Berry said they are still figuring out who is interested. He said it is easier to expand the district later than try to start with a large area.
Purkeypile told the group he had fixed the wall in front of his house, and he did not see the improvement district idea as a benefit to him. He said as an engineer, he had explored the tunnel and considered the sections below the buildings to be in good condition. It was the sections under the parking lots that have problems.
“I’m gonna say no to the district. Establishing a taxing authority is not to my benefit,” Purkeypile remarked.
Pat Lujan, who also lives along the drainage ditch, said he made a considerable investment improving the wall in front of his house plus he pays $4000 annually for flood insurance. He commented adding a tax to the overhead would make his place impossible to sell. Plus, Lujan owns 10 lots in that area, “So we would get a hefty tax,” he said. He said he maintains the wall in front of his property, but the neighbor north of him does not, and the inevitable backup adds to his maintenance duties.
“Getting taxed more even when I’ve done my work is too much tax,” Lujan told the group.
Hull pointed out, “There is a potential solution. We’re trying to figure out how to fix an identified problem 133 years in the making.”
King explained how the district could be structured by those who signed the petition so that it would never borrow money, for example.
Peg Adamson, another resident along the drainage ditch, brought up her neighbor, who is an absentee owner. King said commissioners could gerrymander any property out of the district.
“Consider me out,” Purkeypile said, adding that the project needing attention was the tunnel, not the North Main drainage ditch. He said it is very expensive to do anything underground, a task for Public Works, and unless there is political will to find the money for Public Works, the project will not get done.
King responded that often an improvement district is the collection vehicle for the funds and an already existing entity, such as Public Works, is paid to do the work.
Hull reminded everyone sustained maintenance is part of the discussion as well. The tunnel requires consistent inspection and repair. He urged the city not to wait for an emergency because the tunnel is not a one-time fix.
“It’s about the money. There is not enough of a tax base,” Purkeypile stated.
“We can be taxed only so much,” Lujan added.
Berry commented the meeting had been about gauging interest, which Hull described as part of defining the district.