In addition, the budget funds another licensed wastewater treatment operator, sets a capital expense amount of $102,500 and funds equipment reserves with $98,000.
"This budget represents a departure from the past accounting practices of HISID," Hartley wrote in his introductory letter to the board. "Specific funds have been created for specific operations to enhance accountability and reporting."
During the discussion, he said, "HISID is not broke, not by any stretch of the imagination." He added the district has a lot of money tied up in reserves.
The budget presentation Hartley made was different from handouts given to the board, however. He said that while the bottom line was the same, he had had to make corrections over the weekend, as he realized he had made some errors in fund allocations, and his revisions use a different methodology.
He told the board to "throw away" several sheets and said he would provide amended sheets.
The district is subject to certain laws about how it creates a budget and spends money, Hartley said, and added the "one checkbook system" is problematic.
"We're required to operate on a cash basis.... We are not supposed to operate with a deficit."
He said he has structured the budget with fund accounts: general, water/sewer, debt service and street funds.
The bottom line for 2013, he said, will be a net positive balance of $145,000.
He also said he will not show the $137,000 in defaulted assessments as an expense.
He said the district will meet the end of this year's budget with a $72,000 surplus.
Commissioners questioned the allocation and also the lack of some expenses for infrastructure. Bruce Larson and Ken Brown asked why there are no funds set aside for road paving.
"It's nice to have a balance of $140,000 in December 2013, but you've not done one chip or seal," Brown said. He also questioned an allocation for golf course mowers.
"I know there's a concern (by property owners) about how much we're spending on the golf courses," he said. "Am I proposing we close them? No. Am I proposing we run them to make more revenue? Yes. We can't afford any more large equipment purchases at this time."
Ken Ames wanted to see a reduction in wages and burden.
Hartley said he has earmarked $15,000 in this year's budget to start the process of searching for an engineering firm to begin a study of the district's 70-plus percent water loss.
He said he district will have to borrow money or take out bonds or grants to deal with this potentially very expensive problem.
The water leaks are serious enough, he said, that "if we keep going this way, we could damage our source of water, our wells. We have had radon problems at one of the other wells. Wells need time to recharge."
Commissioners also discussed his recommendation about hiring another water/wastewater operator.
He and Water/Wastewater Superintendent Dan Schrader said because of the district's Class IV wastewater treatment plant, the state requires an operator onsite 24/7 to monitor it, regardless of having an automated SCADA system to report problems. Schrader is the only operator with a Class IV wastewater license.
"ADEQ (Arkansas Department of Environmental Quality) has never said anything, but they could," Schrader said.
"Hopefully ADEQ will give us some latitude," said Hartley. "It will be their call."
The board directed him to contact them for a definitive answer.
In response to whether the 2013 budget includes legal fees for the two lawsuits against the district, Hartley said it does not, and the district could incur a "good chunk" in such fees.
"If you lose either of these lawsuits, you'll probably go to a court of appeals," he said.
Commissioners also discussed the possibility of contracting with the sheriff's department for only one deputy instead of two, which would save $40,000 in the budget. In practice, only one deputy has been serving Holiday Island for quite some time, and it has been difficult to find deputies who want to be stationed there.
The board denied, 4-1 (Brown voting aye), property owner Joe Lawrence's request to replat two lots into one in Unit 10. Hartley said such authority is carried out through the protective covenants for each unit and the district doesn't have such power.
Property owner David Blackford questioned whether even the Planning Commission, whose task is to administrate compliance with the covenants, has such "police powers."
"If you have no power, what do you do with all the other (lots) you changed (over the years)?" asked property owner Herb Holmberg. "Just a question."