If they want tourists to contribute in paying for improvements to city’s water and wastewater projects, local residents will need to get educated in coming months about the importance of an increase in city sales tax, according to Eureka Springs City Council members.
“We do not want to let this fail,” longtime council member Terry McClung said at the council’s regular meeting on Monday, Feb. 23.
In order to get a proposed sales tax increase on the November ballot — with the requested amount still undetermined — the council has until May 1 to get the proper paperwork drawn up and submitted to the county clerk’s office.
If a sales tax increase is passed, anyone paying sales tax — with a particular focus by the council on the thousands of tourists who visit Eureka Springs each year — would contribute additional revenue that could be used to help fund projects such as repairing the city’s wastewater treatment facility and addressing water-system issues.
In turn, the Infrastructure and Improvement charges on monthly water bills would likely be eliminated for residents and businesses.
“We looked at ways that we could raise revenue to help the water department and maybe to at that point do away with some of the I&I, some of those things,” city finance director Michael Akins said. “The first step in that is determining what percentage we would want to ask for.”
Akins explained that based on the 2025 sales tax collected, if the city were to pass a 1 percent increase, it would generate $1.7 million a year for water and wastewater.
A 0.75 percent increase would raise $1.2 million a year, 0.5 percent would generate $855.000 a year and 0.25 percent would raise $427,000 a year, Akins told the council.
“We just kind of want to talk about it because it’s something that we’re going to need to get passed with city council so that it can get on the ballot,” Akins said.
It’s crucial that the city act quickly, council members said.
“We need to address this right away,” Mc-Clung said.
Council member David Avanzino said residents might not be too keen on a sales tax increase, especially since they endured two rounds of water rate increases in recent months.
“We’ve done two already and we’re asking them to pay an additional tax,” Avanzino said. “What discussions have been made to help our residents to answer those questions: ‘You just raised our rates twice now, and you want us to pay additional tax?’ … So how are we expected to offset that with our residents?”
“One of the things that we needed to keep in mind when we’re talking about water rates, we are mandated by the state to charge certain rates,” Akins said. “It was put in place by Act 605. We’re not out here just going: ‘Well, I want five more million dollars in the water department so I’m going to jack everybody’s rates up.’ This is out of my hands, it’s out of y’all’s hands, and really, it’s really out of the mayor’s hands. This is a state mandate; if we are not in compliance for it, we are fined. We can lose a lot of money.
“So the rate study that we did was to show us how, because we have a timeframe of when we have to be in compliance, and so it was a timeframe to get us into compliance. So, I know that’s a hard pill to swallow, but this is not something that we’re just doing as a whim. This is something that we’re mandated to do by this act that was passed.”
Avanzino responded: “We were mandated under (Act) 605 to increase the rates. We were not mandated to add an additional tax.”
“Exactly,” Akins said. “That’s what I was fixing to explain. So, then the request of this council was for us to form a committee and sit down and talk about ways that we could raise money to help with the water sewer treatment plant, with these big two- and threeand four- and five million dollar projects that need to be done at the water treatment plant.”
That’s where tourists come into play, Akins said.
“They’re the ones that are blowing it up,” Akins said of the influx of visitors and their effect on the wastewater system. “… A sales tax is an opportunity to pass a citywide sales tax so that everybody that buys something, tourists, everybody that comes in will help pay for those repairs, those things that need to be done at our water sewer plant. … There’s no way to pay for those things unless we do a tax. It’s either rates or tax. We felt like we were at the limit on what we could put on our citizens as far as the rate because we’re having to follow that and we didn’t want to go any more than that. So, then this was the other aspect to go because the majority of it would be paid by the tourists that are coming into town.”
Education on the issue must begin immediately, McClung said.
“Even if we have to go door-to-door, I mean it’s going to take that kind of concentrated effort,” he said.
Council member Harry Meyer agreed, using examples of door hangers and public meetings as key ways to explain the issues to residents.
“I think when they realize that it will help minimize their future bills from going up, and they know it’s a tourist town, and they know who uses a lot of the water when they come in more so than the locals, that I hope it would make sense to them,” council member Susane Gruning said.
In the end it was decided that the mayor’s office should schedule a workshop — with the public encouraged to attend — in upcoming weeks to discuss the issue.
WILEY RETURNS, GIVES REPORT
Simon Wiley, who recently retired as the city’s public works director, returned to Monday’s meeting to fill in for interim director Sean Mellon, who is currently hospitalized in Fayetteville.
Wiley told the council that the only water leak he’s aware of in the city is near the Osage Creek Lodge on Main Street.
“It’s kind of where we had a water leak a couple of winters ago,” Wiley said. “We’re going to be tackling that soon as possible, but what we’re waiting on right now is we’re waiting on ARDOT to free up some of their signal lights up there because it’ll have a drop off on that side of the road.
“So, we’ll put traffic head to head while we fix that.”
Wiley also told the council that Black Hills Energy recently announced its 2026 pipeline project list.
“They’re planning on replacing lines on Oregon, Emporia, Frisco, Grand, Ravine, Anderson, Cottage, Rogers Alley, and Spring Street in 2026,” Wiley said. “Of course they might not get to all of them. It kind of depends on their funding. What I’ve noticed in the last few years is that they have grand ideas of what they’re going to get done for the year and their funding just kind of runs out so they’re not able to complete it until next year.”
Wiley said residents and businesses who notice small flags on their property on the streets indicated should leave them alone.
“So, if you notice any paint, flags in your yard that indicate where water, sewer, gas and communication lines are, please don’t disturb them. Leave them,” Wiley said. “They’re only there temporarily.”
Wiley also addressed residents’ recent concerns about efforts to clear some roads of snow and ice after the latest winter weather event.
“I met with [Akins] today, and I do have a new F-550 in the budget for this year,” Wiley said. “There’s a possibility, when we’re looking at the numbers, to see if it’s even a possibility of maybe getting a track skid steer unit with a plow on it, where we can be able to do this, but I can use it for other things ….
Wiley said he would follow up at a future council meeting.
SIDEWALK PLAN APPROVED
Over Gruning’s objection, the council approved moving forward with a sidewalk replacement plan approved by Paul Sutherland, the city’s code enforcement officer.
Gruning said the current ordinance hasn’t been enforced, making any compliance regulations seem unenforceable. In addition, Gruning said she felt the timeline given for property owners to comply with the ordinance was too much time.
“The ordinance is already law, and by not actively enforcing it, we’re extending a deferral,” Gruning said. “It’s like kicking the bucket down the road, and when you look at the number of days, we wait a year until they get a notice. That’s 360 days. Then they have an additional 180 days to do whatever they’re going to do after they get a letter a year before. And in the ordinance, it also says that based upon the city inspector working with them, they can have another 90-day extension. That’s nearly two years. And in two years, the sidewalks that they deem pretty acceptable today could be in disrepair in two years. When do we ever get ahead of this? I think that this is not an act of enforcement, it’s an extended deferral, and this is why we’re in the situation we’re in today.
“I truly feel that people can’t afford to fix their sidewalks today. They’re not going to be able to fix it in two years either.”
As a longtime council member, McClung said he could be partly to blame for not doing enough to enforce the sidewalk regulations already in place. He feels the revised ordinance is effective, McClung said.
“[This] shows that the city is taking the steps to give the property owners an opportunity to do this in a generous time frame,” he said. “I don’t argue that. It’s a generous timeframe, but if they don’t, then they’re going to be held accountable. So I like it.”
With all the sidewalks in the city located in the historic district, the council was reminded that each project must also go through HDC approval.
Sutherland also clarified the timeline in the plan Gruning mentioned, saying it wasn’t two years.
“We’re going to give them one year to do it all,” Sutherland said of the repairs. “If they don’t do it, then we require it to be done within 180 days.”
“And then you have a 90-day extension, it says in the ordinance,” Gruning responded.
Sutherland replied: “That extension, I believe, is if the building inspector wants it … but the 180 days is going to be a requirement if they do not comply within 365 days.”
WORKSHOP PLANNED FOR PROPOSED DISTRICT A workshop will be held regarding a proposal for a permanent downtown entertainment district.
The workshop will be announced publicly so residents can voice their opinions on a proposal brought up by restaurant owner Kolin Paulk.
OTHER ITEMS
The council approved the sale of a trolley and tram by the city’s transit department.
“Anytime we have something that’s a city asset that we sell that we think will bring over $5,000, we have to do a resolution just getting the council’s approval to sell it,” Akins said, adding that the sale also has to be approved by the state.
The council approved the reappointments of Cory O’Hara and Christine Santimore on the historic district commission, and a new application for Chris Ritthaler to join the cemetery commission.
