HI 2015 draft budget shows losses based on two funding scenarios

Friday, October 24, 2014

HOLIDAY ISLAND -- If Holiday Island finances some of its capital projects over the next five years, it can reduce considerably its bottom line operating loss figure in 2015, according to draft budget figures considered by the board at its Oct. 20 workshop.

District Manager Dennis Kelly is proposing to finance $464,500 in capital projects through 2019 by taking out a 10-year loan. Under this scenario, the budgeted operating loss next year would drop from $217,172 to $67,942.

In 2015, he is proposing to allocate $176,000 from loan funds, with $70,000 going to a water system telemetry upgrade, $60,500 (each year for three years) to paint and rehabilitate the 9-hole drinking water booster tank on the island and $46,000 (each year for four years) to sewer lift station rehabilitation. Other projects include water meters/electronic billing software ($95,000 each year for four years, beginning in 2016), and the Fire Station #1 tank rehabilitation and paint at a one-time fee of $23,500 in 2016.

"I don't see why we should finance; we should just pay for it," said Commissioner Greg Davis about financing these projects.

"It'll cost you $130,000 over 10 years to borrow $600,000," said Commissioner Ken Mills.

"Why can't we borrow the money from our reserves and make payments back to it?" Davis asked.

Other capital projects for 2015 and beyond would be taken from reserve funds. Next year those total $325,000, while equipment reserve fund projects total $138,335.

Kelly said he is trying to "squeeze in" a 1.5 percent cost of living raise for employees. He is also ready to look at changing the undesignated reserves funding figure from 35 percent to 25 percent of budgeted expenses.

A comparison chart shows that in 2015, at 35 percent, the district would fund the reserve account with $1,018,142; at 30 percent with $872,693 and with 25 percent at $727,245. If it funds at 25 percent, it will give the district almost $300,000 more for operating expenses.

"We'd have all the money we need," he said.

Asked what is driving the request for a telemetry system upgrade, Water/Wastewater Superintendent Dan Schrader said four of the existing eight telemetry sites do not work.

"We can't see the level on the tanks," he said. "We're having to go in manually to adjust them. At night, it overflows and usually goes down the road."

He said this is "not really" contributing to the district's high rate of water loss, a statement with which Mills disagreed.

The board discussed several water and wastewater problems, from tanks needing paint and rehabilitation to pressure-reducing-valve replacements to leak detection and repair.

Road program requests include $196,800 for asphalt overlay and patching and $146,000 for road sub-base restructure.

In other projects, Golf Pro Barry Storie said he would like to have a deck off the breezeway at the Clubhouse, with a stage and garden area for photos to attract more wedding traffic. It would be built by volunteers, he said.

"I don't look at [the Clubhouse] as [belonging to the] golf course; it's more a facility building," he said, "We've done a lot with it."

Kelly said there has been increased wedding traffic.

Kelly also had scheduled $45,000 in capital costs in administration for the three apartments beneath the district office and wants to have a property management company rent them out. The district would recoup about $15,000 a year in rents, he said.

Davis suggested putting that project off for another year. Commissioner David Makidon said, "I'm not sure you could get someone in there long-term."

The board will continue to work on the budget in upcoming meetings, and Kelly said he is looking at having final approval by the last meeting in November.

The board will meet Monday, Oct. 27, at 9 a.m. at the district office at 110 Woodsdale Drive.

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  • Quoting NRHIpropertyowner: "In view of these facts, going forward, why would anyone with any sense of financial acuity buy or build in Holiday Island?"

    My Response: I bought in Holiday Island this past summer because I believe the Holiday Island SID has great potential to resolve its current issues and generate more income (and thus reduce the debt). This will enable the Holiday Island SID to move forward and Holiday Island will be one of the most sought after places in the nation to live. This of course assumes the current District Manager and BOC doesn't bankrupt the SID first. If they do, then folks might as well re-name the SID, "Holiday Island Detroit."

    Now is the time for the property owners, the BOC, the District Manager and the former developer to work together for the good of all.

    Quoting the news story's statement of Golf Pro Barry Storie, "I don't look at [the Clubhouse] as [belonging to the] golf course; it's more a facility building," he said, "We've done a lot with it."

    My Response: Though the HISID Facebook page, the BOC and the District Manager have openly communicated that all of HISID is for golf and nothing but golf. See: http://www.facebook.com/HolidayIslandArkansas

    Every single Facebook message posted in 2014 on the HISID Facebook page has been about Golf. Not one message is about wedding destinations. Absent are messages about the Marina activities. Absent are messages about the arts or nature. Absent are messages about improvements to Holiday Island such as the chain saw sculptures. Absent are pictures of the beauty of Holiday Island. There are pictures of Golf flags.

    The HISID Facebook page has told the world that Holiday Island is all about GOLF and it has excluded non-golf portions of Holiday Island. I believe the Facebook page is a reflection of the mindset and goals of the District Manager and the BOC. I believe it is clear that ALL of Holiday Island are NOT INCLUDED in their plans for the future Holiday Island.

    I hope every property owner shows up at the BOC meeting on Monday and demands change. The home owners deserve better.

    Roxie Howard

    -- Posted by roxielynn on Fri, Oct 24, 2014, at 6:15 AM

    -- Posted by property owner on Fri, Oct 24, 2014, at 9:52 AM

    You go Roxie..! You have the courage and conviction to put your name on your comments..! I for one am very impressed..!

    As for the future of HI. It will be bankrupt long before salvation arrives. When the water system begins total collapse, and we miss a payment or two on the sewer debt, we're done..! Done..!

    Salvation is the bonafide fact that there will be in excess of 1 million people in NW Arkansas in the very near future. The four lane HW being constructed from Avoka to Garfield is just the start..! It will be extended to Eureka Springs eventually. (Why would they build it to stop at Garfield.?)

    When that happens Folks, golf as you know it will be history in HI. The big money will come, buy up the tax lien lots and it will be who shot John. No more circumventing the law by the BOC. The money will turn this place upside down. No more deficit spending. Golfers will pay their fair share. This will become a municipality Folks.

    Just say'n.

    J. Paul Brown


    -- Posted by smokhous on Fri, Oct 24, 2014, at 7:50 PM
  • 4 lanes to E.S., gonna be a bit hard to put 4 lanes through E.S. Only if they condemn a whole lot of businesses in E.S. However 4 lanes to 187 will bring more to HI via 187.

    G.O.L.F = God's Only Loony Folks

    Recent past BOC denied PO's delinquent in AOB pymts from voting.Is that not an Election Violation? One can be delinquent in Fed. Tx. pymts., or State tx. pymts., or even Cty. Tx. pymts, but still allowed to vote. HMmmmmmmm Is this not malicious intent?

    It's not wise to buy into any condo. and/or townhse. development. if there's not ample reserves. So why would a prospective buyer want to buy property in HI when it's reserves are being decreased?

    BIG QUESTION: Why are we spending 1/3 of HI's annual budget to support 'golf', when the number of regular golfers have decreased drastically the past several years. Opening to the public has circumvented the original purpose to forming the sid in the first place. We have 3K+ residents supporting the expensive hobby for perhaps 125 to 250 golfers. Hell, I wanted take up flying. So PLEASE, PLEASE, PLEASE, HISID buy me a 2-seater Cessna plane for me and my significant! Oh, yeah, construct a runway too!

    -- Posted by CommonSense22 on Fri, Oct 24, 2014, at 9:22 PM

    CommonSense22, I didn't say "through" ES, I said "to" ES. See..? (Mark my wordsCS22, it will happen.)

    J. Paul Brown


    -- Posted by smokhous on Fri, Oct 24, 2014, at 10:21 PM
  • NRHIpropertyowner

    I have printed out your suggestion and will present it to the boc tomorrow.

    -- Posted by property owner on Sun, Oct 26, 2014, at 8:55 AM


    Again you have committed an error. Speaking of the water loss between the main and the house..! This water "is" metered and paid for. The BOC telling us this is 40% of the lost water is just bull---t. The water loss is for "unmetered" water.

    Let's get our argument right if we are to make it..! OK..?

    J. Paul Brown


    -- Posted by smokhous on Sun, Oct 26, 2014, at 6:27 PM
  • NRHIpropertyowner,

    As a revenue stream why doesn't HISID impose a $15/head/night hotel/motel tax on these folks and use the monies generated to offset the golf operations losses?


    I offer just a bit of clarification for your consideration ........

    On Kate's 10/21/14 article "Play it Again Sam" prints an AR A.G. BeeBee opinion, that Blackford had gotten, defining the powers of HISID. I reprint part of it below:

    "In Beebe's opinion, the answer to both questions was "generally no."

    "These conclusions are compelled, in my (A.R. Attorney General BeeBee's) opinion, by the fact that a suburban improvement district lacks the so-called 'police powers' that would enable it to adopt rules and regulations, set penalties, institute litigation, and take other official action with respect to building permits and inspections, nuisance abatement, and planning and zoning," Beebe wrote.

    He said the Arkansas Supreme Court specifically considers SIDs to be a "species of taxing districts as contradistinguished from counties, municipal corporations and school districts."

    He also said the court has found SIDs to be "inferior" to municipalities because they "lack the broad legislative, judicial, and political powers that are essential to administering local government."

    He said cities and counties are authorized by state statute to enact ordinances and planning and zoning laws, whereas SIDs are not. "

    A SID CANNOT, --- never could --- never will be able to --- arbitrarily TAX anyone.

    Note: Anyone taking the time to actually look up the statutes and AG opinions will see that the statutes technically refer to the AOB as a type of "tax", but it is the only assessment a SID is allowed to levy - and there are specific instructions as to EXACTLY how this fee is to be calculated and collected.

    If you go back to the HISID AOB lawsuit, you will see that this BOC got it's butt kicked, to the tune of about $3.5 MILLION credited back to property owners and something around $300K+++ in attorney fees when the BOC voted to settle out of court on the illegal way they were charging AOBS. Does ANYBODY really think that even this bunch of dumbbells would agree -- unanimously and presumably under the advise of their own high paid attorney) --- to "pay up and sign off" if HSID really had been conducting things legally?

    A SID cannot LEGALLY impose ANY kind of Value Added tax or Use Tax.

    ALL any SID can legally do is:

    1) calculate and collect Assessments of Benefits (which is NOT a "Tax", it is the repayment of a debt, which under AR State Law is secured by a lien against each individual lot), and

    2) charge a FEE for allowable (as defined under the definition for a SID) services provided (supplying water and sewer services).

    The AG does refer to a SID as a "species of taxing districts" but goes on to further define them as "inferior" to municipalities because they "lack the broad legislative, judicial, and political powers that are essential to administering local government." .

    HISID has NO police/enforcement powers nor any taxation authority. If HISID want to have the authorities granted to a REAL, LEGAL, government ---- then it needs to BECOME ONE.

    Only a legally incorporated city (and above) has the authorities these BOC "wanna be" kings/queens want to pretend they have to rule over the unwashed massed they pretend to represent.

    All the HISID BOC Prima Donnas have the authority to do is see to it the water is pumped, the poop is processed, the roads are maintained, and the miscellaneous amentias are maintained (for the use and enjoyment of the owners).

    Seems that pumping water and pressing poop are WAYYYYYYYYY beyond their intellectual capacity ---- they have found the need to focus on something much simpler , like pi**ing all the AOB money away on the golf courses.

    -- Posted by Truth or Consequences on Sun, Oct 26, 2014, at 7:12 PM
  • 1. It is well-established that an improvement districts powers are limited to those that are statutorily authorized. I would like know upon what statutes the Board of Commissioners relied when drafting the election laws they are attempting to impose.

    2. In a MEMORANDUM dated September 20, 2013, From Dennis Kely, District Manager with the Subject "Voting Rules Clarification" it is written:

    "In addition to the September 16 memo [Memo addressed to Property Owners], the following items represent a further clarification and understanding of the District's past practices and are presented in an effort to clarify those past practices and avoid any potential conflicts or irregularities regarding the District's voting procedures:"

    THEREFORE, the District admits in its memo to sending one set of rules to home owners while keeping separate set of rules to enforce -- upon what Statute did the BOC rely to create two sets of voting rules?

    Roxie Howard

    -- Posted by roxielynn on Sun, Oct 26, 2014, at 8:29 PM
  • Good Morning NRHIP

    Water meters are physically located about 6 feet from the edge of the road, NOT inside/next to the home. As far as I know they are all just off of the road's edge and are all manually read by water dept. employees.

    -- Posted by Truth or Consequences on Mon, Oct 27, 2014, at 8:27 AM

    I am confused as to your meaning NRHI..? My point is the water which is lost between the "main" and the property owner's house, is "metered water". If a leak exist on the homeowners side of the meter, HISID can't claim it as their lost water. Seems the BOC is attempting to blame a good deal of the water loss on the home owner by saying the loss of water is his fault. Dammit, if the water is "METERED" you can't say it is part of HISID's water losses. They're getting paid for it...!

    Now I really don't know what that has to do with where the **** meter is located for crying out loud..!

    J. Paul Brown

    33 Thunderbird ROAD


    -- Posted by smokhous on Mon, Oct 27, 2014, at 5:36 PM


    I understood the BOC was faulting the property owner for these leaks ahead of the meter. That is totally their responsibility, (HISID's).

    Have a day.

    J. Paul Brown

    33 Thunderbird ROAD

    -- Posted by smokhous on Tue, Oct 28, 2014, at 7:40 AM
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