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To: Dear Senator Brian King, Representative Harlan Breaux, Senator John Payton, Senator Bart Schultz, Representative Trey Steimel and All Arkansas Legislators
Grievance and Petition for Remedy and Reform of Suburban Improvement Districts Governance
Grievance and Petition for Remedy and Reform of Suburban Improvement Districts Governance
Introduction
As a resident and property owners within the Holiday Island Suburban Improvement District (HISID) in Arkansas, this petition is borne from personal experience with the severe repercussions of the HSID's decisions. Our properties are encumbered by liens, risk of loss and unnecessary debt with accumulating interest, which threatens the well-being of our small community. Moreover, our local water system is seriously neglected, while economically, we suffer from decreased investment, higher costs, and diminishing property values due to overtaxation.
In what appears to be a continued strategy to divert community funds for the benefit of a select few, the Board of Commissioners (BOC) has chosen not to use the current Assessment of Benefit funds to address the dire state of our water infrastructure, which would benefit all residents and property owners. Instead, they have been steadily increasing water rates and the BOC now has added a second additional bond of $850,000 to our water bills. This is happening without any corresponding benefits or offsets for water customers, despite the significant annual funds extracted from a small rural community of less than 3000 residents. Concurrently, there's an annual golf deficit subsidy, projected to exceed $840,000 in 2025, which continues to support a golf amenity used by less than 2% of property owners, while also extending discounted golf benefits to the general public who partake in this amenity. AOB funds are required by law to benefit properties and not the public.
Background
The benevolent and sovereign powers of the state of Arkansas has granted broad powers to Suburban Improvement Districts (SIDs) in Arkansas. The legal foundation, as per A.C.A 14-92-214 endows them with significant powers but lacks sufficient oversight and accountability to protect the people of Arkansas from abuse and overreach.
Why is this important?
Challenges in Governance and Legal Accountability
HISID's governance is flawed:
- Electoral Integrity: Elections lack guidelines for fairness and security.
- Conflict of Interest: Subordinate HISID employees manage elections, creating a conflict.
- Special Interest Dominance: Decisions favor a tiny fraction of residents at the expense of the majority.
- Unlawful Taxation: Imposing fees without democratic consent breaches due process.
Numerous Violations of the Arkansas Constitution
The Arkansas Constitution clearly states:
- Property Rights- Take without Just Compensation Prohibited: "The right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefor." In HISID, this right is blatantly violated. The district's practices, particularly the perpetual interest-only payments on the AOB, effectively take private property rights without just compensation by not allowing property owners to settle their principal debt. This approach not only deprives owners of managing their property free from perpetual obligations but also contradicts the constitutional mandate against uncompensated takings.
- Redress of Wrongs: "Every person is entitled to a certain remedy in the laws for all injuries or wrongs he may receive in his person, property or character; he ought to obtain justice freely, and without purchase; completely, and without denial; promptly and without delay; conformably to the laws." The current state of affairs in HISID directly conflicts with this right, as property owners are denied effective avenues to seek redress or manage their financial burdens in compliance with these constitutional guarantees. Currently there is a protest filed in December of 2023 in the 19th East Judicial Circuit for unlawful taxation. Judge Scott Jackson has not been moved to render remedy to the people of Holiday Island, nor any decision at all. Nor has any injunction come to prohibit HISID from placing liens on or foreclosing on property owners who may not owe what is being taken.
Misallocation of Resources
The BOC prioritizes recreational amenities over essential services, leading to:
- Disproportionate Funding: Infrastructure neglect in favor of recreation.
- Conflict of Interest: Commissioners benefit personally from district funds.
- Misuse of Assessment Funds: Private funds subsidize public services outside the district.
- Economic Impact: Unfair competition for local businesses due to subsidized services.
- Constitutional Violations: Diversion of funds from their intended use, violating constitutional mandates on taxation and property rights.
Financial Mismanagement
HISID's financial practices resulted in a significant deficit, showing mismanagement and neglect of infrastructure and essential services.
Call for Legislative Remedy
We demand:
- Audit and Oversight: Regular state legislative audits, transparency in financials.
- Election Reforms: Clear, fair election processes.
- Financial Management: User fees that cover 100% of recreational operations, not operated with assessment of benefit funds.
- Taxation and Spending Reforms; Ensure taxes align with their purpose, allow principal debt repayment.
- Transition to City Governance: Enable voting for governance change.
- Limit the Operational Scope of SIDs: Allow for dissolution when purposes are met or no longer serve the community.
Conclusion
The current operation of Suburban Improvement Districts, particularly HIDIS, has strayed far from its original, constructive purpose, adversely affecting not only Holiday Island residents but also many Arkansas Residents living under similar oppressive governance models. This deviation has resulted in an unsustainable taxing scheme that financially burdens many residents beyond their means.
We implore our state legislators to enact binding reforms that will restore constitutional rights particularly the sanctity of property rights and the assurance of remedy. Such reforms should ensure that governance within these districts truly reflects the will and promotes the welfare of all community members, not just a privileged few.
Arkansas Residents and property owners.
Arkansas Residents and property owners.