If the Holiday Island Suburban Improvement District were dissolved, the city of Holiday Island would need additional revenue to cover amenities and services.
City council treasurer Wesley Stille identified potential sources of revenue at a joint workshop between the HISID Board of Commissioners and the Holiday Island City Council on Saturday, July 12. Stille first described the current sources of tax-based revenue that the city has received over the past 12 months.
The street fund totals $291,278, Stille said, with $197,480 coming from state road taxes and $93,798 coming from the city’s share of the county property tax. Stille said the general fund totals $589,209, split between $35,664 from Arkansas Municipal Aid and $271,267 from the city’s share of the county sales tax. The total amount of tax-based revenue that the city receives, Stille said, is $598,209.
“Keep in mind that it’s from tax revenue that you’re paying and you would pay whether or not we had a city,” Stille said. “If we didn’t have a city, it would be going somewhere else … a lot of it to the county.”
The proposed new revenue sources include a property tax up to 5 mills, a 2 percent city sales tax, a 4.25 percent Carroll Electric franchise fee and an 8 percent Carroll County Solid Waste District franchise fee. Stille estimated that a 5-mill property tax would bring in $278,350, a number based on the $70 million assessed taxable valuation in Holiday Island.
It would require a vote of the citizens, Stille said, but the 2 percent sales tax would bring in an estimated $560,000. Stille noted that the city would lose its share of the county sales tax if a city sales tax is voted in. Still, he said, the city would have a net gain of $289,000. A 2 percent sales tax is comparable with other cities in Carroll County, Stille said.
A 4.25 percent franchise fee on Carroll Electric would raise $147,050, Stille said, and an 8 percent franchise fee on Carroll County Solid Waste would bring in $35,752. Altogether, he said, that’s an estimated total of $749,885 in additional revenue. Combined with the existing sources of revenue, Stille said, that’s about $1.35 million in total revenue available to the city.
“That’s nowhere near what it would take to operate everything in Holiday Island,” Stille said.
Holiday Island Mayor Dan Kees said the point of Stille’s presentation was to show the challenge the city is facing regarding revenue sources. The city can’t dissolve HISID without having a solid financial plan first, Kees said.
“We would be about $1.3 million short of what we think we can raise between known sources and the potential new sources Wes was talking about,” Kees said. “It’s a big challenge, and we’ve known that for a long time.”
Earlier in the meeting, each commissioner and council member described their overall objective for the joint workshop. Council member Barb Kuhn said she knows it will be difficult to get enough revenue to maintain the services and amenities in Holiday Island.
“My goal is to identify those sources of revenue that will allow us to eliminate the suburban improvement district and take over all the functions at the city,” Kuhn said.
Council member Sharon Lawlor said everyone needs to understand state regulations.
“Arkansas has a lot of regulations about how cities work and suburban improvement districts work. This isn’t just this group making these decisions,” Lawlor said. “We’re being governed by a state that has very specific guidelines.”
Her number one goal, Lawlor said, is finding direction.
“The city just doesn’t have the revenue and I’m not real comfortable with some of the sources they’re suggesting, so I’d like to know where we’re going,” Lawlor said.
HISID commissioner Nicole Regan said she’s looking for a balance between HISID and the city to “work together to improve everything for all the members of the community, to try to make as many people happy as possible.”
HISID commissioner Doug Pinkley said he’s hoping to find a smooth transition between HISID and the city before the early 2030s.
“We need to get a lot of stuff planned between now and then … how we’re going to do it financially,” Pinkley said.
Council member Chris Cushing said she’d be happy if both groups could come to a consensus on how to move forward.
“Once we have that overarching goal, that starts the process for everything else that needs to take place,” Cushing said.
Kees said everyone was there to serve the community, and it’s most important to understand that Holiday Island is a democracy.
“You’re never going to get everyone in Holiday Island to agree that we need this and this and this … but we do need to find out what is important to the majority of the people here and move in that direction,” Kees said.
Stille said he originally thought the purpose of a suburban improvement district was to develop an area so it could become a city. Then he looked at the finances, Stille said, and his perspective changed.
“I kind of decided that what we would need to do would be to have a combination of both, with the city having its responsibilities and the district having some of the responsibilities for providing some of the services,” Stille said. “In the end, it’s going to depend on financing.”
City council member Ken Mills agreed.
“My goal was never to eliminate the suburban improvement district,” Mills said. “I thought we’d have some sort of a partnership.”
HISID chair Randy Rahlf said he’d like to create a committee to set out goals for a long-range plan, and HISID secretary David Rochefort agreed.
“If financing wasn’t an issue, I’d be voting right now … to dissolve the suburban improvement district and have the city take over,” Rochefort said. “But we don’t want to make rash decisions … without a long-range plan.”
Also at the meeting, Kees said the city has paved several miles of road and has a bid request to pave seven more miles soon. Kees suggested creating committees to address the water and sewer departments. The group agreed to meet again to discuss those topics more, but the date of the next meeting has not been announced yet.
