City, County & Local Affairs Committee - Senate
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Bills discussed (4)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB182
· 5 mentions in chapter, agenda, transcript
Matched: “SB182 J. Sturch TO AMEND THE LAW CONCERNING DELINQUENCIES IN IMPR…”
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TO AMEND THE LAW CONCERNING DELINQUENCIES IN IMPROVEMENT DISTRICTS. | J. Sturch | Died in Senate Committee at Sine Die adjournment. |
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SB243
· 2 mentions in chapter, agenda
Matched: “SB243 M. Johnson TO AMEND THE LAW CONCERNING INTERLOCAL COOPERATI…”
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TO AMEND THE LAW CONCERNING INTERLOCAL COOPERATION CONCERNING THE HEALTH INSURANCE OF RETIRED EMPLOYEES. | M. Johnson | Died in Senate Committee at Sine Die adjournment. |
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SB282
· 2 mentions in chapter, agenda
Matched: “SB282 M. Johnson TO AMEND ARKANSAS LAW CONCERNING CONSOLIDATED WA…”
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TO AMEND ARKANSAS LAW CONCERNING CONSOLIDATED WATERWORKS SYSTEMS; TO AMEND THE GENERAL POWERS OF A … | M. Johnson | Died on House Calendar at Sine Die Adjournment |
|
SB59
Act 872
· 1 mention in agenda
Matched: “…WITH REVENUE BONDS. DEFERRED BILLS Number Sponsor Subtitle SB59 B. Ballinger TO BE KNOWN AS THE INTRASTATE FIREARMS PROTECT…”
|
TO BE KNOWN AS THE "INTRASTATE FIREARMS PROTECTION ACT"; AND TO PREVENT THE UNITED STATES … | B. Ballinger | Notification that SB59 is now Act 872 |
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Chair Cesar Coleman, members, if you want to take your seats, we're going to go ahead and get started. The first item on the agenda today, Senator Sturge has a bill that he would like to present, and also we're going to debate it, but we're not going to take a vote on it today. So, Senator Sturge, you are recognized to present Senate Bill 182.
Senator James Sturch
Unverified
0:40
Thank you, Mr. Chair. Thank you, colleagues. I appreciate that consideration. I did ask Senator Stubblefield if you wouldn't mind to at least hear the bill, but allow me time then to address any concerns or make any amendments that might be needed in the future. So I just wanted to kind of give you what brought this bill about and then kind of what we're trying to do and then and respectfully ask for your feedback and if any help that you might know of or be willing to suggest. Last fall, Representative Gray and I both received communication from a constituent in Horseshoe Bend, which is run by a municipal improvement district.
and the gentleman was trying to buy the vacant lot next door to his house and he had already went through all the trouble of going through the commissioner of state lands and making a bid on the property and so forth. Of course they had it for bad taxes but he got almost to the end of the process and then found out that it also had a bunch of improvement district fees that were assessed over a number of years and the total then amount of the improvement fees was more than the land was actually worth. And we, you know, tried to work with him, tried to find a way that that could
be amended or find a way that that could be, you know, somewhat taken care of with the commissioner of state lands or whatever, and found that there is no way. There is no way in law that these improvement districts can waive those assessments or fees or anything like that. Several of them have different arrangements with how they handle, you know, delinquencies and different things, but there is no provision in law that says they can forgive those assessments so at some point in my mind it becomes counterproductive when you allow assessments to just keep building and building and
building to be more than the land is worth and they never go away you're going to keep vacant lots for a long time if that continues to be the case so that's what we've done in this bill we've worked with the commissioner of state lands to make sure we were amending the right section of code just to allow forgiveness by a vote of the board. I'm not saying that they have to. I'm not saying that they should. I'm just giving them the option if the board has an individual land owner that comes to them and this situation would apply, you know, that they could forgive those assessments to where someone could start paying by the land and start being a beneficial member
of that improvement district. And so you'll see that on page one and then also an amended version and on page two in a different section of code that deals with those suits for municipal improvement districts. So essentially that's what the bill is for. That was the purpose behind the bill and I'll be glad to take any questions or explain any further.
Members, you've heard an explanation of Senate Bill 182. Is there any questions?
Senator Dan Sullivan
Unverified
3:26
Senator Sullivan, you recognize. Thank you, Mr. Chair, and I appreciate what you're trying to do. I understand what you're saying. So why wouldn't we just cap what that penalty could be equal to the cost of the land or 50 percent or 30 percent? Because it seems like, one, if I had some property that I couldn't sell, maybe I purposed that by setting the price high or bypass some things. It seems like one in three years is not a very long time for a piece of property to set vacant.
Speaker 13
4:01
And it seems like people might do that intentionally. Right. Well, Senator Solomon, the reason for the three
Senator James Sturch
Unverified
4:08
years is because that's already in law. That's when it gets turned over to the land commissioner's office is after three years. And so, but now to your first point, that's kind of what I'm wondering if that amendment should come, is where it's only in cases where the assessed value would be more than the appraised value or something like that, where the assessments, you know, are over that. It's just I'm worried about certain situations where we get to just within a few dollars
and someone says, well, should we let it go another year or should we, you know, how, because sometimes these assessments are only $50 a year or $100 a year or something like that. So I'm amiable to that. That's kind of what I'm trying to fix, but I'm not sure if I can put a timetable on it or if I should just put a language in there that's value-wise. Yeah, I agree that it's hard to do. Yeah, thank you, sir. Thank you. Thank you, Mr. Chair. Senator Hamer, you recognize for a question?
Senator Kim Hammer
Unverified
5:03
Thank you, Mr. Chair. The first question I have is what if the fees go delinquent but not the taxes? Can the Improvement District take possession of the lot? or maybe somebody down the road can answer that. Well,
Senator James Sturch
Unverified
5:20
maybe someone down the road. It's my understanding that that does happen at some points. And so the Improvement District, and let me be, well, probably too honest than I should be. Senator Hammer, I don't really understand all I need to know about Improvement Districts.
What I do understand I don't really like because they seem like a quasi-government entity with no oversight by anybody, and that's what worries me, is that some of these are municipal, so that they are appointed by a mayor or city council or whatever. Some are even county-run, or at least they're in the county. And so, you know, that's kind of what I'm looking at, too, is, okay, so if the taxes aren't delinquent, so it never goes to the land commissioner's office, then who's in power of these assessments? And from what I gather, it's the improvement district. And some improvement districts, I think you've heard from Cherokee Village,
they can actually foreclose just after two years according to their rules. And so that's kind of what I'm trying to muddy through the waters as well. So I don't have a good answer for you on
Senator Kim Hammer
Unverified
6:21
that. Okay. It just seemed like if there was an alignment between the two practices, that might be a pathway forward because what you would do for one situation, you might do for the other. And then the second thing, I had a visit with Commissioner Land here a few weeks ago, And we were talking about such as this when property is turned over.
And I think there is on the website or whenever it goes to auction, it's supposed to have a pretty big disclaimer on there that it's up to the individual to do due diligence to see if there are things such as, you know, the fees associated with the improvement district or maybe a mortgage. Do you know about that? Yes. And the individual that I
Senator James Sturch
Unverified
7:04
mentioned about the constituent we had last fall had reached out to the, you know, secretary of the improvement district or, you know, the city and she had told him what it was or whatever.
But, you know, of course that came down the road and that's what I'm saying. The secretary then told him, you know, we have no way to get rid of this. We have no way to forgive it. We have no way to work with
Senator Kim Hammer
Unverified
7:32
you. And so that's what brought the situation to our attention. But do you know, did the constituent know when they bought the lot that there were improvement fees that were passed due or delinquent on it that they would actually be responsible to pay if they
Senator James Sturch
Unverified
7:48
bought the lot at auction? I cannot say no I don't from the way he talked it was like a surprise to him or
news to him you know that it would also come you know because he he was under the impression that when the Commissioner of State lands gets it and they you know make a bid or they make an amount as far as fees and fines and everything he thought that was all inclusive now I think he couldn't find out that was different later but I think in his mind it was all part of that package
Senator Kim Hammer
Unverified
8:15
right and I don't think he's the first one and that may be a pathway forward too is what do we have to do to make sure that if people buy a lot or a piece of property they know that there may be others attachments to it that wouldn't just give them the clear
ownership and maybe that's an area we could look at
Senator James Sturch
Unverified
8:30
too. And I did look at that as far as with Commissioner of State Lands. I asked them if they would be willing to be that entity as far as you know putting it all together because to me that would be cleaner. It'd be cleaner if the Commissioner of State Lands could do property taxes and all these fees and assessments and everything else as part of that package. And that way the amount that you see for that lot is all-inclusive, but I don't think that they have the authority or that they were willing to step out on that authority to do that because these are various across the state.
Okay, all right, thank you. Thanks, Senator Hamer. Any other
questions from committee members? All right, we've got a couple of gentlemen Senator Sturge, I'm going to ask you if you would just maybe move to the side. We've got a couple of gentlemen to come in to speak against the bill. Mr. Bill Mazzalboba and David Gruger.
So if they could bring in, Mr. They're upstairs. It'll take them a minute to come in. All right.
Speaker 28
9:39
Just take just a minute to bring them down from upstairs. You may want to say anyone that's here to testify, just in case. there's no
Speaker 29
9:49
one no one else here to speak for against the bill yeah that's where they are
If you will turn your mic on and identify yourself and who you're with. Yes,
Speaker 36
11:00
sir. My name is David Grueger. I live at 115 East Lakeshore Drive in
Speaker 37
11:06
Cherokee Village. I am part of a watchdog group that concerns the CID and making sure
Speaker 38
11:11
our governments and P's and Q's are taken care of.
All right, Mr. Gruger, you are recognized. Be sure and pull that mic up as
Speaker 36
11:22
close as you can. You're recognized to start. I've just got a quick little
Speaker 37
11:29
statement to read for you. Thank you, Chairman and Senators, for allowing me to speak to you about this bill, SB 182. It's my opinion and our opinion that it's a bad bill for several reasons.
First, this bill would allow for the Board of Commissioners of the Improvement
Speaker 36
11:52
District to selectively forgive delinquent annual assessments as they choose. This effectively creates two classes of property ownership within the Improvement District, those that pay the annual assessments and those that don't. This seems to run in complete opposition to the 14th Amendment Equal Protection Clause as the government is
Speaker 37
12:13
now allowed to punish some by extracting taxes
and reward others by forgiving taxes, picking winners and losers at
Speaker 36
12:22
its discretion. Secondly, this bill creates further issues involving the use of public funds for private benefit. Assessment of benefits within an improvement district are essentially loans for the government improvements that must be repaid. If not, then the government has effectively provided public benefits, the district improvements, to property values.
This violates several provisions in the Arkansas Constitution and common law. Those are Article 12, Section 5, Article 16, and Section 13 of the Arkansas Constitution and the public purpose doctrine under common law. The general rule by the public proposed doctrine is that the public funds cannot be used for private purposes. Forgiveness of assessment tax or fee are the same as debt or loan payments,
confers on to unpaid public benefits to private property, which is prohibited. Assuming the first two hurdles involving equity for all properties when the district and their owners can be overcome, Then the third problem with this bill as written is that it's unclear as to how delinquent assessment payments that are forgiven would be accounted for. Would the forgiven assessment apply to the balance of the assessment of benefits such as in a case of a paying property?
Or would the balance prior to forgiveness remain in place? It is unclear. year, and fourth, when a lender would loan monies to an improvement district knowing that repayments could be forgiven by its bond, there would be too much uncertainty. Where I live in Cherokee Village, we're the only district in the state of Arkansas that operates the way we do. By passing this bill, you'd be given power to three unelected, self-appointed lifetime
commissioners. We would have no recourse to vote them out if they did something we, or they forgive things that we shouldn't. So we have no avenue of correcting issues. it opens up, I pay my taxes every year and I think there was a question or a clarification asked earlier that when I pay my taxes to the county, CID fees come out first. Then
our county taxes or our county, state, city. What's to stop a commissioner or a couple commissioners in our case three commissioners from saying my buddy joe over here we're going to let him go two years we're not going to foreclose we're going to let him go three years and then we're going to forgive his taxes that's an unfair balance that i have to bear on my back because we have to pay those loans back and keep our sid running um i i would urge you guys
in this current form and I would hate to say in the form it's written now to vote no. It baffles me that this kind of bill can come before this committee when it's very well known that we have unelected officials under a law that only one sit operates under. Why has that not been presented to this committee to change that to where we can elect our own? I'd be happy to answer questions if you had any.
All right, gentlemen, you've—any committee members have any
questions? Senator Hamburg. Sorry, Senator Hamburg, I jumped the gun. Senator Rice, you were first
Speaker 47
16:20
on the list. Thank you. Did you testify two years ago? Yes, sir, I did.
Senator Terry Rice
Unverified
16:25
I thought you did, and I do appreciate you being here and listening to your concerns. in your viewpoint what is a fix for this have we covered that i mean we we we spent time on this
two years ago and i understand there's there's two sides the issue has there been any effort for the two sides to come to resolution there has okay where where is that at and when you say, I think you said or related to your surprise, you'd have a bill. You can make a bill on about anything and try to pass it. Doesn't mean it's right or wrong. But I would
be very interested in hearing your resolution recommendation to this, to the problem. For this bill or for our problem, Chair? No, really for the problem. It's going to have to relate to the bill. If you're saying the bill won't fix it, I'm asking what would fix it, in your mind. Thank
Speaker 37
17:34
you for that question, Senator. My thinking, right or wrong, you know, I'm human, I'm going to make mistakes, but I think in 2011, the law was changed
Speaker 36
17:45
where the land commissioner was able to reconcile or combine
the CID fee with the back taxes on the state. I think it was 2011 that was removed. So he has no authority over those. As far as, I mean, there's a lot behind me I'd like to get a hold of, too, whether it's got back taxes, not I'll pay it. But I think it'd be, like Senator Sturge said, I think it'd be a good idea to maybe give that authority back to the lands commissioner
where he can combine the state fees
Speaker 37
18:22
owed, state taxes, with the SID taxes. and if it sells at auction, it sells at auction for
Speaker 36
18:30
whatever they can get, just like everything else. I also think there needs to be something put in to
Speaker 37
18:38
stop a private entity that's in contract with CID from obtaining lands on behalf of CID by standing up and reading a right of redemption at the auction,
which scares off buyers. I believe our
Speaker 36
18:57
property values assessed by our SID are over-inflated. I mean, a lot's
Speaker 37
19:04
really not worth, an empty lot's really not worth more than 500, but we're being billed at,
Speaker 36
19:12
I think, 4,000. I also think that if you're doing something in this bill, maybe let's had some verbiage to
Speaker 37
19:22
allow us to have elected commissioners rather than three, five elected
commissioners offset. I mean, if we're submitting a bill, I don't see why we can't go ahead and add these things into it. But as part to your other question, or part to that question, yes I'm involved in
Speaker 55
19:46
a lawsuit against our sit and I mean everything's on the the Arkansas court site that you can go read
Speaker 37
19:57
depositions and see what the complaint is and if you're anything
like I am you'll be flabbergasted by it so at this point that's been
Speaker 36
20:06
sitting and waiting for the court to pick it up and hear it. We did try to talk to Sid prior to the lawsuit and just got brushed off. So that didn't go anywhere. Did I answer your question? You did. Thank you for
Speaker 168
20:21
your testimony. Thank you, Mr. Chair. Thank you,
Chair
Unverified
20:25
Senator Rice. Senator Hamber, you're recognized. Thank you,
Senator Kim Hammer
Unverified
20:29
Mr. Chair. Senator Rice got most of my questions, but that $4,000
number you referred to a while ago. What is that? $4,000? On a vacant lot. That's their
Speaker 58
20:38
assessment. What they just reassessed. Okay, so you're... Okay, but the real value of the lot? Probably $500. Reality is $500. Okay. Yeah, and they did a blanket assessment where your lot on the lake
Speaker 36
20:54
it's empty, is charged. If it's vacant, it's $153, I think. But a lot that's on a cliffside same price same assessment can't build on it but you're being assessed as
being able to my house is $333 a year I'm on my house
Speaker 37
21:13
literally splits two lots sitting on two lots they charge me as an improved lot and a vacant lot so they hit me twice on it and they refused to combine the two lots, even though county has put two on the same tax card. But my house could be off in the middle, you know, nowhere.
Speaker 36
21:40
And I'm being charged or assessed the same amount as a person on the 18th old golf course or on the lake, sitting on the lakefront.
Speaker 37
21:48
So we have a lot of issues that we're trying to get cleared up. I mean, did
Speaker 58
21:55
that explain it okay to you? It did. And Mr. Chairman, can I ask the presenter
Senator Kim Hammer
Unverified
22:00
a question at the appropriate time, please? Yes. Senator Sturge, whenever you do. Yes. Now or later. What would you prefer? I'll just ask him now if that's okay.
That's okay. Okay. Senator Sturge, I wanted to ask you one question on the bill. It says the Board of Improvement District, on this page one, line 32, the Board of Improvement District authorized to forego the collection of delinquent taxes upon a majority vote of the board if the taxes have been delinquent for three years or longer. Is it within, and I'm asking because I don't know, is it within the board's ability to actually forgive taxes or are they not remitted over to the land commissioner after three years?
And I guess the question is, is it really within their authority to forgive taxes?
Speaker 65
23:01
Senator Hamber, that language we consulted with the commissioner
Senator James Sturch
Unverified
23:04
of state lands. Like I said earlier, after three years is when it's given over to the commissioner of state lands if nothing else is done, so, but now taxes there would be considered the fees
and assessments based on the tax value. So
we're not talking just about property taxes, we're talking about the fees that only the improvement district i could have thank
you mr chair all right center clark you recognize
Speaker 168
23:34
for question how long have you owned the
Speaker 36
23:37
two lots um we purchased our property our house uh in 2008 moved back here in 2009 retired back here okay so
Speaker 168
23:44
the house was already built yes sir so you
You bought the house on the two lots. Yes, sir. So what has materially changed either in your situation or the improvement
Speaker 36
23:57
district since you bought it? I have done
Speaker 37
24:02
extensive research on the title for our properties, the two properties. And oddly enough, it stops
Speaker 36
24:09
back in 1982, I believe. That's about the closest time we can figure when the houses were joined together by a common room.
So by doing that, I was able to have county put the unimproved lot on the same tax card as my improved side. Sid, however, refuses to combine those two into one tax. subsequently I've got two lots behind me as well I know that the only way to get the state to recognize those two lots that my house is physically on is to have it resurveyed
then the state and county will recognize it as one lot they'll never separate it in fact I've got some commercial property in Cherokee Village with a close to 3,000 square foot building we were told by the person we bought it
Speaker 37
25:10
from that it was SID-free, no SID taxes, won't have it. We went 10 years without a SID fee, and this year they slapped a $378 fee on it without giving me my right to hear the board or the Equalization Board.
They didn't notify me. I found out by looking at my tax card when I
Speaker 168
25:34
got the bill from county. Okay. That last part may have been an answer to my question, But let me ask again, what has materially changed since
Speaker 36
25:43
you bought the property? Uh, the only thing is, is I don't pay taxes on both those lots. County taxes. I still pay SID tax because
Speaker 168
25:50
I'm a 100% disabled veteran. But the Improvement District and the way they operate has not changed since you bought the lot? No, sir. No, sir.
Okay. All right. Thank you. All right.
Thank you, Senator Clark. Mr. Gruber. Yes, sir. And correct me if I'm wrong, did you mention something about there were parts of this bill
Speaker 60
26:12
that was unconstitutional? Yes, I did it. What parts were you referring to? The 14th Amendment under Equal Protection Clause. What line are you talking about here? That I'd have to dig out. I don't have it in here. but Article 16, Section 13 of the Arkansas Constitution
and Article 12, Section 5 is what we're claiming violates.
Those two are the only ones? From Arkansas, yes, sir.
Any other questions from committee members? Senator Johnson.
Senator Mark Johnson
Unverified
26:55
Thank you, Mr. Chairman. Mr. Gruber, I'm
sympathetic to your point here, and I also have, it's not a, again, that would be doing something in a positive manner like passing a bill as opposed to defeating a bill.
But I tend to shy away from the legislature sticking their nose in when there's already pending litigation. And I'm, again, my knee-jerk reaction about delving into it, and really based on what you mentioned about equal protection. And I think Mr. Chairman is referring on page 1, lines 32 through 34. or you basically are saying, well, you know, I'm good friends with Senator Clark,
but, you know, I don't particularly like Senator Hammer, so I'll just forgive his taxes instead of his. And, I mean, that's obviously probably be a little more subtle than that, but the result could be about the same, and I don't like that. And I also don't like any entity, whether it's a state senator or an improvement district board that stays the same people forever. I just think that that's not conducive to the way the public should do business. So I think we're exposing some reforms that need to be done,
and I tend to agree with Senator Sturge's opening statement where he basically said, I see things about improvement districts. The more I learn, the more I don't like, and I'm kind of along the same way, Senator. But the instant issue here is whether or not this bill should pass, and I'm very skeptical of it. But again, I don't like us injecting ourselves into litigation, just because it's a separation of powers issue, really.
But if your litigation is successful, would it solve your problems, your instant problem? And I realize that it creates a precedent, but it means somebody else has got to go back to court to deal with this. Obviously, we need to look at this in a global sense in the state of Arkansas. But would it solve your, can you get your problem solved in court and then let, perhaps through legislation that would pancake these taxes onto the state taxes and require that the land commissioner know that up front so someone wouldn't be buying a piece of property and then get
Speaker 83
29:32
hit with this out of left field with these fees.
Speaker 37
29:40
so. So, I mean, and Senator Sturge has mentioned that it's consistent with contacting about the lot and finding out afterwards that it had these fees. We hear that all the time
Speaker 36
29:52
up in Cherokee. I just think that in this current form, you're opening up for corruption to happen. Like you said, I could be best friends with him.
not like Senator Solomon at all and he's let his property taxes go back I'm going to forgive or I'll forgive his but I'm going to let his go to whatever but I mean the issue lies as like was stated when someone goes to buy a delinquent property like that or should they be paid paying the back taxes of Sid for several years well I mean as a Sid CID belongs, it's supposed to belong to the people, the property owners.
And by forgiving that, not only is it open up for corruption, it also simply says that me is the paying taxes, me paying my taxes. Now I've got to carry the burden where that property doesn't have to. Yes, sir. I think you've
Senator Mark Johnson
Unverified
30:57
made a good point on that. And I appreciate it. I have one last question, if I could, Mr. Chairman. As I recall, Cherokee Village was the first big development by
Speaker 54
31:08
Cooper Communities. Yes, sir. Is Cooper Communities still?
Speaker 37
31:11
He went on to go to Hot Springs. I believe that was his next one. And then he gifted all the properties
Senator Mark Johnson
Unverified
31:20
and amenities to our CID. So basically, there's an improvement district that runs Cherokee Village, and the developer has waved bye-bye. Yes, sir. and this is a self-perpetuating board that runs that. Yes, sir. So, well, maybe we need to look at self-perpetuating boards. We ran into this, as you recall, last spring, Mr. Chairman, on levy districts.
I had some levy districts along the Arkansas River in my district that, you know, the board members had aged in place. Basically, they were all dead, or a lot of them were dead, and it's kind of hard to deal with a board when all the members are dead, And thankfully, there's some things that were put in place by Senator Raper that kind of saved us. But I believe that's where the reform may need to be. And I'd gladly
Speaker 54
32:06
work with anybody down here to help get that set up. We'll try to deal with the instant issue if we can.
Speaker 37
32:13
But I do believe that this will cause more problems than ours said
Speaker 36
32:18
than it's going to create answers for anyone else. Because this will change how ours operates, too. Thank you
Senator Terry Rice
Unverified
32:23
for your testimony. Thank you, Mr. Chair. Thank
you. That's called a non-functioning board when all the board members die, Senator Johnson. Senator Clark, do you
Speaker 168
32:37
recognize for a question? I'd like to ask Senator Sturge a question. Senator Sturge, I'm some days a slow learner.
The central change here, page 1, lines 32 to 34, could you tell me again the problem that this was solving?
Senator James Sturch
Unverified
32:59
Senator Clark, essentially there is no provision in the law that would allow an improvement district to forgive those bad assessments. So when someone goes to buy a property that may be delinquent on property taxes, those assessments, whether it's been 20 years or 30 years or whatever, have piled up and there's
no way then for them to negotiate or spend down or anything like that. So then you have a property that may be only worth $500 or $1,000, but you're having to pay $2,000 or $3,000 in assessments for it, because they have no way to go away. And so that was the language that we were trying to do. So in response, I don't understand the benefit of having all these vacant lots that aren't being paid on at all, because then the burden is already on people who have lots and are
paying. And so in order to get these lots off of delinquent books, you know, that's what I was trying to do to allow people who may just want to purchase the vacant lot next door to them or whatever, those would be,
you know, taxpaying citizens or assessment paying citizens and basically contributing to the
Speaker 92
34:08
improvement district itself. All right. If I may,
Speaker 168
34:11
Mr. Chair, the assessment can't be changed. So the assessment's piled up for a period of time, and then the district board wants the ability to forgive that so that they can sell it, but then the assessment's going to stay the same.
Senator James Sturch
Unverified
34:37
You mean the rate or the... Yeah, the rate of assessment will stay the same. I think the rates change every so often, only then when it's been reappraised. And so, as David was mentioning, you know, with Cherokee, it's different. It's a suburban improvement district as opposed to Horseshoe Bend, which is this is a municipal improvement district. But anyway, every so often, 10 years or so, they'll call for a new appraisal. And that's the only time that the assessment amount will change. Okay. And so,
Speaker 168
35:08
under current law, if the taxes aren't paid, it
goes to the state land commissioner in three years, right?
It goes up for auction, right? And gets sold, supposedly, right? Why does that not work?
Senator James Sturch
Unverified
35:36
Because on the improvement district assessments, they are not part of the auction amount. So the assessment then remains. So if you're just delinquent on your property taxes and the assessments, the Lane Commissioner can only deal with the property taxes,
but then the assessments are done by this improvement district. So like to Senator Johnson's point, I'm not sure it's constitutional for us to force another entity to forgive them. That's why I had to make it permissive in the language that they are allowed to forgive them, just because, like I said, they're quasi-governmental entities, but I haven't found the authority to where we can come in and just change all the laws. I think you're right. You may not be able
Speaker 168
36:21
to force them to, and that comes back to we have a process within the state
that was testified to has been changed, that the state at one time could take care of both and have a clear title. And now we can't. Why is not going back to that the answer? A two-part question. Why is not going back to that the answer? And I know you didn't mean to get into all of this when you picked up this bill. But why is not going back to that the answer? And what does keep, as this gentleman has pointed out,
what does keep, if this law is passed, the unintended consequence of an unelected board being able to say, well, we'll forgive the taxes on the fees on this property so so-and-so can buy it, but we won't do that on the lots behind you. Sure. Well, like I said, when we were writing the bill or
Senator James Sturch
Unverified
37:19
drafting the bill, we did consult with the Commissioner of State Lands Office. They had told us that changes had been made to the law in 2011 based on some things that were in other parts of the law where they didn't know if they had that authority to do it.
So they recommended this way as far as the sections of code and everything. And now we can go back to them and we can ask, you know, would you be willing for us to do it this way where you would have the power and what other, you know, sections of code do we need to change to give you that power? So I don't know as far as your first question would be, you know, that would need to be brought up by the Commissioner of State Lands folks, to be honest. And those are friendly questions. No, that's
Speaker 94
38:00
all right. And then the second part of your question is that was one of the concerns.
Senator James Sturch
Unverified
38:06
You'll have to forgive me. I wasn't aware of the opposition until yesterday afternoon. Someone had to forward me the e-mail that y'all were all getting. I wasn't on that e-mail chain. But anyway, so that was one of the concerns that was brought to us yesterday was, We'll watch to keep somebody then from playing favorites, you know, with it. And that was not our intention at all. Like I said, to Senator Solomon's point, it might be that we need added language in here to say, at the point where the assessment is more than the appraised value of the land, you can forgive. But, you know, as again I say, I'm very hesitant then as far as forcing them to forgive
because I'm not sure we have that authority to force another entity to give their own assessments that they do themselves. On the other hand, then, we're always talking about local control, and, you know, with these improvement districts, they do have a board. Some are appointed by themselves. Some are actually appointed by the city, whether it's mayor or council or whatever. So my hesitation with that, then, is should we put in an appeal process, maybe? But who would they appeal to?
Because some, like I said, have no authority or no oversight authority. And that's my, you know, problem with improvement districts to begin with is that I don't see any, you know, or at least very little oversight authority for them. But I'd be willing to do an appeal process type language or something like that. But, you know, when I was talking about the, you know, picking and choosing or whatever, that wasn't our intention at all, although I can see it. But at what point then do we allow it to where, you know, it makes sense if it's just within a few dollars of being the appraised value?
we're going to have constituents come back to us and say, well, I was just $100 away, and they have to wait a whole other year to, you know, go through the process again, or if it's, you know, a certain time. Like I said, there is no, at least I can't find a good year amount or year time or a good amount to put in there,
Speaker 94
40:04
but very vague language then to give them some discretion. One more question, if I
Speaker 168
40:16
may, Mr. Chair. The, because I chaired the water task force, we do see abuse in water improvement districts.
We see, thankfully it's not most, but where we will refuse to run water to property, but then, which defalues the property of course, but then someone else can buy it for less money, and all of a sudden, who may happen to be a relative of a board member, incidentally, and then we can run water to it. So, as you've mentioned, giving more power to an improvement district with more oversight concerns me.
Senator James Sturch
Unverified
40:55
Should it not? Yes, sir, I'd agree, but that would be my point, too, is at what point then does the state have the authority to have oversight put into law or do we have that authority? It seems like we keep having these fights year after year after year, but I don't know what roadblock then we keep running into where we don't have the authority to come and dissolve all of them or we don't have the authority to come in and say you must incorporate with your municipality or with your county or whatever. There's got to be something there that this hasn't been fixed.
Speaker 168
41:29
Theo? It appears, you know, it sounds like to me that it was probably improvement districts who wanted their fees taken, separated in 2011. I don't know that because I wasn't here, but that's a good guess. And, again, it appears to me that not that you can get that passed, but it certainly seems like something I would vote for. but putting them back together so that it goes to the land commissioner and gets sold
and whoever, where Hot Springs Village or Cherokee or Bella Vista doesn't have some priority over everybody else seems to make sense to me. And then they can make their fees make sense or not make their fees make sense. But does that not make sense to you, Senator Sturge? Thank you. Thank you, Mr. Chair. Thanks, Senator Clark. Senator
Johnson, you have a question? Thank you, Mr. Chairman. And this is kind
Senator Mark Johnson
Unverified
42:30
of a follow-up to Senator Clark's question and comment.
Is there anything constitutionally you're aware of, Senator Sturge, that would prohibit us by legislation basically, they probably wouldn't like it, but telling the land commissioner that you need to add these fees into the delinquent tax formula so at the auction people would realize to get clear title and use of this property this would and the whole idea of this is to to clear the the account and start all over again so the
property can be reused and and with this you know thing out there this this unknown lien or and again it's not just the fact that it's unknown it's the fact that it's a lot of money a lot of times even proportionately to the taxes. I mean, I don't want to see land wasted and having a legal quirk that it can't be used, kind of like we've got the old VA hospital sitting out here on Roosevelt Road that's been empty for 25, 30 years and a few things in it.
But the point is that because of asbestos, it's just sitting there. We need to find a way to redeem this, and that's the term it's used, to redeem this land. Do you know if there's any constitution or other legal barrier that would stop the General Assembly from having the land commissioner do this? I do
Speaker 84
43:56
not, Senator Johnson. I'd have to defer
Senator James Sturch
Unverified
44:01
to Commissioner of State Lands Office, which I can get that answer for you, of course. But I do not know. Well, I'd be glad
Senator Mark Johnson
Unverified
44:08
to work with you for us to seek a solution.
But I don't think the solution is trusting someone that could very clearly be biased and had no oversight on any of the biases
Thank you, Mr. Chair. Thanks, Senator Johnson. Any more questions from
Speaker 168
44:32
committee? Senator Clark, you recognize. Senator Sturge, maybe an easy fix, I thought, is, not for this gentleman maybe, but for me,
is if in the legislation it
required the Improvement District Board to have a hard and fast rule, I realize that's not legal language, but a hard and fast rule in place by which they did everything the same and required public comment when they were putting that rule in place. That might fix it for me and help fix their problem. All right.
Any other questions from committee members?
Mr. Gruber, if you want to step aside and we
have Mr. I don't know if I'll pronounce this right or not. I suppose so. Mr. Matzalbopa, if you want
to come up and introduce yourself and who you're with, and you're recognized
William Matzalbopa
Unverified
45:36
to speak against. Thank you. My name is William Matzalbopa. I reside at 46 Naconda Road in
Speaker 112
45:43
Cherokee Village. I've been there for about 20 years or a little over.
Speaker 113
45:49
um i'm a retired citizen who came up to enjoy the beauty and and all the the wonderful things that arkansas has instead of the downtown los angeles beauty of freeways and you name it um but first let me say thank you and and to the honorable chairman of this committee and to the Honorable Senators. I don't want to hash over old history, but I think sometimes
the Senate and the government have a tendency to make a mountain out of a molehill. You know, I spent 15 years in the title insurance business, and I had a license in Florida for a mortgage brokerage business, so I understand liens, judgments, a little bit about real estate and so on. Okay, when a person goes to buy one of these properties, you know, they have the right to go down to the city clerk, the county clerk, the tax collector, and say, what are the taxes on
this property? They also have a right to get a title insurance report. If they go through a licensed real estate professional for help, that professional carries a liability policy. And the reason for that is so that people get the truth and justice, okay? And they get what they're expecting to get. Now, on this matter that's in front of you today, I want to say this
first of all, and I hope you don't just put a blanket in front of me after I say it, but what's really needed to resolve the problem for the whole state of Arkansas with these suburban improvement districts is a Senate investigation to the point where right people can ask the right questions and come up with answers that you know aren't being, you know, blown out of proportion or turned around or what have you, you're going to get the truth,
and then you'll be able to make an intelligent, solid, good decision. Right now, the biggest problem that we have in Cherokee Village is the Suburban Improvement District, and here's where the issue comes in. They have the money to go out and support political people, and those political people get donations, and then they stand up for them, and we, the citizens, wind up getting what comes down the hill, and it's not fair. Now, when I first went to Cherokee Village, I bought a piece
of property, and they told me, they said, okay, this is the American Land Company, and, you know, they do this, they do that, and so on, and you've got to pay a $35 transfer fee. I said, whoa, wait a minute. I said I buy a piece of property. I says you know I paid the taxes. I says what is this $35? I said that's not right. Oh yeah well you have to pay it. Everybody pays it. Well I went down and got an attorney over this $35 and the $35 did not get paid. I found out living in Cherokee
Village that it's not a matter of what you know. It's who you know and if these good old boys that run this this suburban improvement district are allowed to go out and do whatever they want i guarantee you you're going to have corruption and that's what you've got up there right now and and i'll say this i was flabbergasted when we went to a meeting and found out that the suburban improvement district is paying the water district 72 000 uh to go out and check water
hydrants that the fire department for Cherokee Village could be doing for a lot less money. Now that's SID fees that's going to do what? Where's that money going? It's going to the guy, the private company, the private people that own the water district. When I was down here two years ago, there was one sentence in the bill. One sentence in a bill 165 was said, you know, if you're a suburban improvement district of a thousand members or more, that you have the
right to go out and spend whatever you want to spend. You don't have to get approval from anybody. Come on. This gives these people the right, you know, to do whatever they want to whoever they want. And if you've got a good old boyfriend over here that has this sewer plant that he's had and he's been making money on, and now it's all dilapidated, torn up, and beat up, and it's losing money. Well, why can't the Suburban Improvement District say, hey, for the good
of the community, why don't we buy this for a million dollars? And, you know, that'll help you out. Okay, so they go in, and they don't have to get approval from anybody. They can go in and spend this money. Do you think that's right? I don't. Okay. The other thing is we got a board up there, this Suburban Improvement District, they're supposed to be taking care of the facilities up there, like the pool, the bathrooms at the park, the miniature golf course, and
so on and so forth, but the monies, they say, we don't have. We don't have the money. I went to them and said, hey, I'll take the money out of my own pocket, and I'll bring volunteers in here, and we'll paint the rails, and we'll clean this place up so it can be used and people can bring their families up here and enjoy this oh well we're afraid of this we're afraid of the virus we're afraid of and it goes on and on and on now you've got right now in the lawsuit that's pending against the SID I mean it's a book this thick and it took it took months and
months of legal expense and time to create that. Where has it gone? It's sitting on the attorney general's desk because she said, well, I want to see what happens with this lawsuit. This lawsuit has been in the courts now for going on two or three years, and the people are getting absolutely no relief. The money that's going into these SIDs is not being spent in a manner that's fair to the
people. Again, like I say, I don't want to make a mountain out of a molehill, but back when this issue came to the governor's office and they said, hey, we got all these properties, nobody's paying their taxes, the property's not worth what the taxes are, what can we do? Well, this group of good old boy said why don't we just take and forgive all the taxes uh well you know i had five or six or eight pieces of property including some commercial property uh and and that's you
know that's being taxed why don't we just forgive all the back taxes for everything so right now we've got one party up there that that owns a big shopping center and so on so forth all their taxes could be forgiven. This isn't right. That shifts, and this is what the big deal is, Mr. Sturge. You're shifting burden from the wealthy people or the special interest groups
right down on to the poor people and to the taxpayers and the retirees. In other words, that money needs needs to be in the pot and if they don't pay it somebody has got to pay it and it winds up coming down on my shoulders okay and i don't think that's fair so anyway they said let's forgive all these taxes and start over because we just want to see taxes coming in and then we'll you know this problem will resolve itself well you know sometimes the road
the hell is paved with good intentions and and i think that's what was done in this case now you've got a situation where where this sid is playing favorites pure and simple without any doubt they're playing favorites now i'm not a district attorney i'm not an attorney i mean i'm just a common person i'm a layman but you know it's pretty easy to know right from wrong and there's a lot of wrong going on up there. And I think what we need is some sort of government investigation
to answer your questions, your questions, your questions. And then you know that the answers you're getting are not from this source over here, which is bias. You're going to get the truth. And then you can make a decision. I hope I haven't belabored too much. And I hope that somehow we'll find some relief. But the biggest thing that has to happen, and when Mr. Ballinger was trying to present his bill, I got up and I said to Mr. Ballinger, sir, all you have to do to resolve
this and make it go away is put an elected board on the SID. An elected board, not three appointed people that make decisions and appoint their successors, that would solve a lot of problems, and that still hasn't been done.
Speaker 116
55:48
I'm going to stop there. All right, Mr. Matzalboglu, you take some questions? Yes, sir. Senator Clark, do you have a
Speaker 168
56:01
question? Yes, there seems to be two central issues that I can identify. And the first is,
Because is it not to everyone's advantage that empty lots that are being unproductive be sold so that somebody's paying fees and taxes, et cetera? The lots aren't doing any good if
Speaker 112
56:23
they're just sitting there not paying. It's not paying for the roads. The roads are in deplorable condition. I mean, it'd be nice if the state of Arkansas came up there and gave us some money for some roads and then made the community more desirable.
Speaker 168
56:40
Maybe President Biden will do
that. The second part of it seems to be, okay, in an attempt to do
that, there's a fear that people will be treated differently and property will be treated differently. What if in the law there was a hard
and fast, it would have to be permissive, Senator Sturge, but that if a improvement district put in a hard and fast rule that, well, just if a Senate improvement district said that if it reaches three years and is sold at auction, then they'll be forgiven.
Again, an improvement district wouldn't have to put that rule in place. But if they put that rule in place, then any property that went to the land commissioner would be forgiven. And then there would be no fear that people would be treated differently because it's coming up for sale and anybody who wants
to bid on it can bid on it. Does that make sense to you,
Speaker 112
57:45
sir? Sure does. You know, I mean, it should be the same for everybody. That's what you're
Speaker 168
57:50
saying. And that's what Central Search is trying to do.
All of us have presented bills like this that we got caught in the crosshairs. But I think those are the two issues. And, Mr.
Speaker 116
58:03
Chair, I appreciate it. Well, I would just like to answer one
Speaker 113
58:08
other comment to your question that you were asking. And that is, I don't know if it's possible to do it, but I would, and I know a lot of people would, would like to see an appeal board. In other words, if the suburban improvement district, no matter where they're at, whether it's Bahia or whether it's Cherokee Village or wherever, if they do something that is unreasonable, unfair, or thought to be, why can't it go to an appeal board set up by you or set up by somebody and
Speaker 112
58:43
let that appeal board make a final decision if somebody feels there's wrongdoing?
Speaker 168
58:48
done. If that's a question directed to me, Mr. Chair, may I
answer? Yes. That doesn't sound like a bad thing. It doesn't sound like an easy thing either, but certainly letting the property go to auction and whoever wants to buy it, the highest bidder, certainly seems to be a fair way. Lots Lots of things probably need to be done to improvement districts, but I'm not sure you'll have to find somebody who wants to carry that.
Speaker 113
59:21
Well, the other thing that would probably help a lot of people, and it would definitely help the state of Arkansas collect a whole lot more taxes, is if these properties that come up for sale, if there was some sort of identification as to where they were, besides meets and bounds legal description. In the city, you know, you might live in a subdivision and you live on lot 13, block four of this subdivision. You go buy a piece of property,
they say, well here it is, you know, the northeast corner or the southwest corner or the northeast this or the southeast, and it goes on and on and on, you know, and it takes somebody that's got a college degree or being a Philadelphia
Speaker 112
1:00:09
lawyer to figure it out. So that's one thing that could be done that would help everybody.
All right. Thank you, Mr. Maselbubble, for
Speaker 112
1:00:21
the testimony. Thank you, everyone, for your
time. Senator Sturge, you want to add anything
Speaker 3
1:00:27
before we set this aside? Thank you, Mr. Chairman. No, I'll take feedback from
Senator James Sturch
Unverified
1:00:33
today, And like I said, I'll probably be back with an amended version, but I'll make sure that the committee sees it ahead of time. But I appreciate your time, and I apologize for taking
so much. Thank you for the presentation. Senator Johnson, you're recognized to present Senate Bill 282.
Senator Mark Johnson
Unverified
1:01:02
Thank you, Mr. Chair. Mr. Chairman. We're going to do 282 first. Yes. Okay. Unless you
Senator Mark Johnson
Unverified
1:01:23
Well, I kind of had them in that numerical order, but I don't care. It's totally up to you, Mr. Chairman. It's up to you. Well, then let's do 243 first
because it's I'm Senator Mark Johnson, District 15.
Mr. Chairman, members of the committee, these two bills are related to central Arkansas water, a brief history. In 2001, the cities of Little Rock and North Little Rock consolidated their water system under an interlocal cooperation act and created a single entity, CAW. It provides a retail water service to residents of Little Rock, North Little Rock, Sherwood, Maumelle, and certain parts of rural Pulaski County, and I would be remiss if I didn't say, I hope to add Ferndale to that list soon, and the gentlemen that are here are helping us hopefully accomplish that, but it does, they also sell wholesale water to the cities of Bryant, Cabot, Jacksonville, Shannon Hills, and several other entities in Pulaski and Saline County.
Now, any time you create a new entity, an intergovernmental entity, you're going to have some glitches and needs for cleanup legislation, and that's what these two bills are. In 1995 and 2009, laws were passed that permitted municipalities to offer health insurance to their retirees, and Little Rock's program that Central Arkansas Water received upon the consolidation, however, began well before that time. And small inconsistencies between that law and CAW's program are continuing to this day.
So what this legislation would do would cure the existing imperfections and permit CAW to continue to offer health insurance as it currently does to its retirees. Now all employees at CAW hired on or beyond January 1, 2010 must pay the full health insurance premium in order to participate in the program. So this fixes a glitch, an inconsistency that came up because of the creation of this consolidated water organization that originally came out of both Little Rock and North Little Rock's water works.
And I'll be glad to answer any questions, and certainly I have former Senator David Johnson, who I believe is entitled to general counsel, but he's the lawyer for CAW, and I have Mr. Justin Allen with the right, Lindsay and Jennings, who's also an attorney, and Mr. Tad Bohannon, who is the CEO of Central Arkansas Water, are all here, and I'm sure any questions come up, they can
answer. All right, committee, any questions from committee, Senator Clark?
Speaker 168
1:04:09
Senator Johnson, you said it's fixing a glitch. What
I read here is that it allows a public body, which I'm assuming is the city, to pay all or
a portion of the retired employee's premium. First, it may first be a retired employee may participate in a health care plan. so I'm assuming that's new language
you're talking about people who were in the
Senator Mark Johnson
Unverified
1:04:43
old they were city employees because it was Little Rock Municipal Water Works originally and so they continued under the new entity so it's to allow this
Speaker 168
1:04:53
transition they were already allowed to participate in a retired employee to participate in a health
care plan as a retired employee but it's a new plan or I'm trying to let's
Senator Mark Johnson
Unverified
1:05:07
talk about two classes of employees if we
could there's and I was told recently that we're not supposed to use this term anymore but they were grandfathered in that these were people that came to the entity when it was the Little Rock Municipal Water Works and then and that's why the bill also says that all I don't know if it says it but as a matter of fact I need to find it All new employees after January 1, 2010, aren't grandfathered in. They have to pay the full premium.
They can participate, but they're paying the full premium. But the employees that were there before this change took place are granted the same rights they had as city employees. Am I saying that
Speaker 108
1:05:56
about right, Dave? Okay. Okay, so what we don't have
Speaker 168
1:06:01
here, then, is, and that's what I'm trying to understand, is that they were previously allowed, as city employees, to participate when they were retired in the health care plan.
That's my understanding. And if anyone else would like to help answer this, I just want to make sure I understand it. And this reestablishes their ability to do that, but not any new employees hired
after a certain date. Yes, sir. That's my understanding.
Senator Mark Johnson
Unverified
1:06:40
Basically, if you were working there when it was Little Rock Municipal Water Works, you're treated under the rules that existed at that time.
And if you came to work there after creation of CAW, when it was no longer directly under the city of Little Rock, then you can participate, but
Speaker 168
1:06:58
you're going to pay your own full 100% of your premium cost. Okay, well just
a naked reading of the bill I don't like, but if what you're doing, if what I'm trying to understand then is what you're doing is before CAW came in, this was their deal. And so this is reestablishing their deal that they came to work under, but for no one knew.
Is that what I mean? That is my understanding of the bill, Senator, but I'll be glad
Senator Mark Johnson
Unverified
1:07:30
to have one of the other gentlemen. I want to be sure that I completely understand. Let me ask them if I stated that correctly. Senator David Johnson could come up and maybe fill
us in if he'd like to. Senator, I'll move down. good to see
Speaker 135
1:07:49
you senator david johnson good to see
Speaker 136
1:07:52
you mr chairman and members of the committee i'm
david johnson i'm general counsel for central arkansas water there were there were three periods of time there were the there was a period of time back before the consolidation happened in 2001 that was when littlerog had its own system and north littlerog had its own system then they consolidated those systems into one system, Central Arkansas Water, and then that carried the, Central Arkansas Water received a retirement program at that point. So all the retirees that retired before then and during the 2000s, they continued on like
that. And up through then, by those old rules, Central Arkansas Water was paying for those retirees, health insurance premiums when they retired. And then effective January 1st, 2010, Central Arkansas Water adopted a revised program whereby all the new employees that came on from that time forward would pay their own premium once they retired years after that. So there were really three stages they were talking about. And that program had carried on for quite some time.
And in all candor, it was in recent times when we determined that there were inconsistencies between that program that had been in existence for who knows how long, probably before the 1990s, and the two statutes that are on the books, one that was passed in 1995 and one that was passed in 2009, two separate statutes, two totally separate ways for municipal retirees to get health insurance, and it turned out that our program,
not consistent entirely with either one of those statutes, it's relatively small inconsistencies, but we wanted to have our program be consistent with the law,
Speaker 168
1:09:47
and that's why we had this bill. So, again, this reestablishes that employees hired before 2010 or
will be put back under the same agreement they thought they were under before.
It does not affect in any way those since
Speaker 136
1:10:10
2010. That's right. Absolutely. This bill, that's exactly what this bill does. It ensures that the guarantees given to those employees when they were hired, whether they were hired in the 1980s, 1990s, 2000s, or 2010, that the program that was represented to them when they were hired, that that will be honored. But no one knew? That's right. No one knew.
Speaker 168
1:10:39
Because I don't see that part of the law here. All I see
is that it allows retirement to be paid. Right. And
Speaker 136
1:10:47
I don't want to say no one knew when those laws were passed, But it may be that the program that Little Rock Municipal Water Works had in 1995, when the first law was passed, was already not consistent with the requirements of that statute, and same thing in 2009. And so it's time, we felt, to reconcile our program with the law, and we have what we think is a statute
Speaker 77
1:11:16
or a bill that would be consistent with our practice.
Okay, Senator, let me. Yes. Folks hired today.
Speaker 168
1:11:23
Yes. Are they covered by this? Yes, for sure. That's, okay, that's, so then
what we're getting down to is not just the people that were before, but that a
retired employee of a public body may participate in a health care plan that the public body offers to the retired employee subject, okay, And then a public body may pay all or a portion of the retired employee's premium if the premium payment is the same or similar to the premium that the public pays for the members of the retired employee's plan class, which is the people currently working.
Speaker 137
1:11:59
Well, and we see it as two plan classes. We see it
Speaker 136
1:12:04
as all the employees who were hired before January 1st, 2010, who were assured that Central Arkansas Water would pay their premium once they retired. And then we see a second
Speaker 137
1:12:15
class, and that's everybody hired January 1st, 2010 and beyond, who were told that they must pay for their...
Speaker 168
1:12:24
Here's my concern, because it's a good deal
if you can get it, okay? That when you retire, your former employer pays your health care.
That's nice. That's a good deal. But Joel operates, as much as I like you, you operate similar to a utility. And the people who pay your rates have no choice about any of this. There's not like somebody else is coming in, you know, I'm going to sell you water for a half cent less. Yes.
So that causes me some consternation. Why shouldn't it? Well, I
Speaker 136
1:13:05
can just tell you that that's just the program that Central Arkansas Water received
when it was formed in 2001, and it's a program that Central Arkansas Water continued then for several years, and then I suppose in the late 2000s, decided to revisit that, and I agree with you, it's a very rich benefit, not a benefit that I get, because I didn't start working there until after January 1, 2010, or Mr. Bohannon gets, he didn't start working there either. And so it was a benefit that the management of Central Arkansas Water then revisited, I suppose, in 2009 and decided that the right thing to do was to change that
benefit effective January 1st, 2010, so that any new employee that began at that point or after, they could still have health insurance. They would just have to pay for it. And I think, I'll say this too, I think there's probably a constitutional argument too, if
Speaker 137
1:14:04
a deal was made with an employee that the government's going to have a hard time going back on that deal.
Speaker 168
1:14:12
And that's why I'm not sure we're having the same conversation because if
it's, again, if you're keeping an agreement
with employees hired before, I completely understand. But
if it's going forward for new employees, I don't completely understand. And that's, I'm trying to make sure that there's a divider, which I don't see in this bill. All I see in this bill is that you can pay employees, retire employees retirement. I mean, health care. I don't see a divider that
it's up to people hired up through 2010, not people hired after.
Speaker 146
1:14:52
So you would like to see the law not only, you would like to see the law reflect exactly what's happened and basically permit up until January 1st, 2010 for
Speaker 77
1:15:02
the utility to play. Permit you to take care of
Speaker 168
1:15:05
those people, but not going forward with that same benefit that I don't know that anybody has. Well, I can tell
Speaker 136
1:15:13
you we have no intentions of reverse course on that, but that's what I can tell you. But I would be
Speaker 168
1:15:19
much more comfortable. Secretary, you can understand that if it were in the law.
Does that make sense? I understand what
Senator Dan Sullivan
Unverified
1:15:37
you're saying. Okay, thank you. Senator Solomon,
Speaker 146
1:15:41
you're recognized. Thank you, Mr. Chair. How many people does this impact? Well, we have
Speaker 136
1:15:47
300 employees, and, you know, I asked that question. I think the bulk of our employees now are in the, of active employees, are in the January 1st, 2010 and beyond class.
So when they retire, then they will be paying their own premiums. Of course, we have lots of people
Speaker 150
1:16:09
who have retired for whom we're obligated to pay that premium. That's the number I'm interested in. And I don't know
Speaker 151
1:16:17
what the exact number is. And it gradually decreases over
Speaker 136
1:16:22
time because those people pass away eventually. But new people roll on also. Right. So it's his peak already,
and it's just decreasing. And gradually as people move into that post-January, as our positions move into that
Speaker 150
1:16:37
January 1st, 2010. Yeah, because a follow-up question, what's the fiscal impact to
Senator Dan Sullivan
Unverified
1:16:42
the taxpayer when we do this if people are, there's got to be an estimate of how many people are rolling on and off and what is the actual cost? Is there cost savings? Have you all calculated that? There may be
Senator Dan Sullivan
Unverified
1:17:00
that. Okay, so we're going to pass legislation
that we don't know what the economic impact is
Speaker 136
1:17:06
to the taxpayer? Well, it would basically be a legislation that affirms current practice, to be honest. As I mentioned, we inherited this program from Little Rock Municipal Water Works, and so that's really the status of
Senator Dan Sullivan
Unverified
1:17:22
it. And just last question, and I'm not sure I know the answer, but in the private sector, if
another company buys another company out, are they obligated to pick up all those retirees?
Speaker 136
1:17:35
uh typically yes if there's a if it if it's not just a purchase of assets but if it's an acquisition of the of that new corporation of that old corporation then they receive both the assets and the liabilities of yeah and that was certainly the case with with central Arkansas
Senator Dan Sullivan
Unverified
1:17:54
water yeah and that would be the case contractually so when that contract is made to buy There's a discussion over how that going forward would look for all the retirees.
And what essentially happened here is we didn't look forward to that. And now we're trying to look
Speaker 137
1:18:15
backwards so that we can look forward. Well,
Speaker 136
1:18:18
that's right. I'm sure that all the contracts of any substance entered by Little Rock Municipal Water Works back in the 1990s. In fact, I'm dealing with some of those right now because they they were passed to their successor and interest, which is central Arkansas water. And I could give you an example if you're if you're interested.
Senator Dan Sullivan
Unverified
1:18:38
But well, I mean, I agree with what you're trying to do. When we're trying to bridge that gap that was not plugged, I'd
Speaker 136
1:18:48
just be interested in what that impact is at some point. Yes. Well, and I will say that there are, as I mentioned, there are two statutes that permit municipalities and we're a municipal entity also that permit municipal municipalities and their entities to give health insurance to their retirees.
So this is nothing novel that we're talking about and nothing would change if even if this bill didn't pass, that truth would continue. But as Senator Johnson mentioned, and as I would say, too, there are small technical inconsistencies between those two statutes and Central Arkansas Water's program, which I mentioned existed long before probably that 1995 bill was even put into place that that law was.
And so we are trying to just have a program that complies with, in every sense,
Speaker 143
1:19:44
with the law. And that's why we have this bill. Okay, thank you. Thank you, Mr.
Speaker 158
1:19:52
Chair. Thank you, Senator Sullivan. All right,
Speaker 168
1:19:57
committee members, Senator Clark, you have another question? Senator Mark Johnson, do you have a problem with language in this bill that specifies that it's just for prior to 2010?
Senator Mark Johnson
Unverified
1:20:08
Senator Clark, I don't have a problem with the fact that it recognizes that people
on the date certain moved, operated under a new set of rules just like for most of my working life I was told that I'd get full Social Security benefits at age 65 and somewhere along the way they told me it'll be age 66 so but the point is that they set a date from people hiring in
saying okay we've got a new set of rules and if you're hired because you're hired after this date you're in this new set of rules and those of you that came in and agreed to the old set of rules we're not going to change it on you that's basically what we've got but do I have a problem with it no sir i don't have a problem with it but i i do agree that uh and and the the drafter at the bureau you know i believe that what she did was there may be some stuff in the
code sections that's not shown in the bill a lot of times they'll put the whole thing in and then show the new language uh in a case like that uh uh i think it causes us to have debate on a bill that should take five minutes might take 30 minutes but I would agree if it would please you to pull this bill down and work with staff and CAW folks to clarify that particular point but I'll get with you on whether or not it answers your question before we bring it back up. And if you can show
Speaker 168
1:21:48
me that there's somewhere in the code that it's already specifying that then I'll be good with it. I just want to see it
Senator Mark Johnson
Unverified
1:21:56
specified. Okay. We'll be glad to do that. And Mr. Chairman, if it's okay with the committee, I will pull down Senate Bill 243 for now, and we'll work on an amendment to, or at least, even if we're just adding the full amount of the code shown on the printed bill to clarify, I think
Speaker 87
1:22:13
Senator Clark's question deserves a complete answer. So it's okay.
Speaker 162
1:22:17
We'll do that. Thank you. Thank you. We do appreciate that,
and we'll allow that and appreciate Senator Johnson here to
Tad Bohannon
Unverified
1:22:23
testify and we look forward to taking this back up. Thank you, Mr. Chairman and thank you, members. Just one minute. Can we go ahead and go to the other bill?
Senator Terry Rice
Unverified
1:22:39
Yes. The next bill, Senate Bill 282, you're recognized to present. Senator Mark Johnson. Thank you, Mr. Chairman.
Senator Mark Johnson
Unverified
1:22:50
Senate Bill 282 has to do
with the powers of public body, which in this case is, of course, central Arkansas water, to have certain powers that were, they may have been implied, but this will make it explicit. it. And I've already described how CAW came to be and what it does, but current law establishes these waterworks only for limited authority to own it and improve real property. The proposed
legislation would permit a consolidated waterworks system to develop, own, and lease multifamily residential facilities, and that would permit CAW, which owns a vacant lot in downtown Little Rock near their headquarters on the outskirts of the River Market, to build a small facility of apartments or condos for lease to the public. The legislation would also produce, would permit CAW or any consolidated waterworks to provide plumbing services and other similar services for charge
to its retail customers in the event, for example, that a CAW customer is losing water on account of a leak in the customer's private service line that runs between the meter and the house, CAW could undertake that repair. The authority to construct multifamily residential facilities and authority to undertake plumbing services could generate revenue that would permit CAW to forestall otherwise inevitable rate increases. And anyone that's worked in the whole issue of water, I don't want to single out Senator Clark, but certainly he's one of our resident experts on it, would know that those increases are probably inevitable, and this would be another revenue stream that would help CAW to avoid that.
Mr. Tad Bohannon, who is the CEO of Central Arkansas Water, is here, and he will be here to answer
more technical questions on this. And I will take any questions or Mr.
Tad Bohannon
Unverified
1:24:54
Bohannon would. Okay, members of the committee, are there any questions for Senator
Speaker 168
1:25:06
Johnson or Mr. Bohannon? Senator Clark, you're recognized. So lines,
page one, lines 27 through 32 is allowing central Arkansas water to build apartments.
is that what i'm reading and
hearing yes sir and the y'all's primary purpose is to provide water just a minute mr senator clark if
Tad Bohannon
Unverified
1:25:31
you will go ahead and just for the record identify yourself my name is tad
Speaker 170
1:25:37
bohannon i am the ceo of central arkansas water thank
Speaker 168
1:25:41
you go ahead and proceed So
your primary purpose is to provide water? Am I correct or incorrect?
Yes, sir. Okay. And so how does this come about that you're
going to build and own apartments? Yes, sir. Do
Speaker 171
1:26:08
we have other utilities doing these type of things? Not
Speaker 172
1:26:11
in Arkansas. There are other utilities in other parts of the country. This is an issue of turning what used to be revenue-producing lots for a water utility to revenue-producing lots.
The question is this. The infrastructure is there. The pipelines are there. Those pipes must be maintained, but they're sitting vacant, and there's no activity happening on those lots. And so the trick is how do we promote reinvestment in areas where we have vacant lots and we can turn those into revenue-producing lots? There's, you know, that's the idea.
Speaker 168
1:26:57
Okay. And you have to continue to own these lots? Yes, sir. Well, or we could
Speaker 174
1:27:05
sell them if a developer would do something with them, but they're sitting vacant now, and there's
Speaker 172
1:27:11
no nobody beating down the door to do anything with them. Okay, so you don't have
Speaker 168
1:27:19
to keep them. You could sell them. I'm just a little curious.
I mean, no one's approached me about this. Have you considered building an amusement park? considered building an amusement park? Yeah.
No. I just, I mean, get into one
Speaker 171
1:27:46
business versus another. One is to increase water meters. I mean, that still
Speaker 168
1:27:50
remains our primary purpose. Well, water park would greatly increase water. No, because. Well, amusement parks today generally include water.
Speaker 174
1:28:00
You're correct. In fact, I don't know that that's a, given the lack of financial success at the current water park that exists, I'm not sure that would be a
Speaker 168
1:28:15
thing that we would want to
do. Okay. All right. But you don't, having the second focus, you don't in any way think affects,
how does it affect, good or bad?
I think that the idea is it's supposed to have a good effect for Central Arkansas Waters customers. What
Speaker 172
1:28:44
effect does it have? First of all, you know, I have a board that says, you know, we're not going to get into the management business. So but it's just an opportunity to make the capital investment in an area that is declining and declining in water meters and increase the number of water meters. So we have revenue from those lots to be able to pay for the repair of the infrastructure
in those areas. But that doesn't mean we're going to get into the business of running them because of there's people that that's their business, but that's the board, you know, to say this is what you ought to
Speaker 174
1:29:24
be doing and this is where you ought to be focused. The biggest thing to look at is what is what occurs and what what straddles urban water
Speaker 172
1:29:34
utilities is that as populations shift you end up with vacant areas where there's no revenue yet we still need to maintain that
infrastructure and in fact we need to maintain that infrastructure even to get that out farther that are out to the other areas so that it can flow through it to get there. And so there's been success in other parts of the country of using, of investing in that infrastructure so that you generate a return on that stranded infrastructure that is already existing and what's been there. And it provides an opportunity to redevelop areas
that makes sense where it makes sense to redevelop and make it done. There's still a whole host of things that have to be gone through before this. CAW's commission has to approve it, which has representatives from both sides of the city and are approved by the city, those commissioners are doing. Still has to go through planning jurisdictions, still has to go through everything. So we're going back within the cities to say, hey, this is what we're trying to do and does it help? And so there's a whole host of things that move forward.
there's a whole host of checks that say this is the right thing to do. And this just gives us the authority to get there. What we don't have, all right, is the ability to, under Article 12, Section 5, we don't have the ability to participate with a partner in this deal. We don't have ability to go to a developer. We don't have an ability to say, okay, can we have a partner? Because Article 12, Section 5, knocks that out of the opportunity. And so this is the opportunities to look in and say, okay, this is what we can do.
Speaker 168
1:31:20
Okay, but it's not a casual thing to add that. I mean, Intergy could say we want to build apartments because that will have more people using electricity or gas people could say we
want to build apartments because we'll have more people on gas, but we have an electric utility, we have a gas utility, we have a water utility. And I also question, because on one hand I could come back and say, well, I'm glad that you want to redevelop an area that's not being developed, is if an area is prime for residential development, as a guy who works in that business, why nobody else is interested in doing that?
Speaker 172
1:32:07
There could be a lot of reasons in that. As far as with energy and center point that you say, they are allowed, they are not bound by Article 12, Section 5, so they can enter into partnerships with folks to accomplish those tasks. Okay. I don't know
Speaker 168
1:32:24
that it's a terrible idea. I just, it's a big idea just kind of that I don't think is so casual as just to look at it and say yay. But I understand that it's a big idea,
Speaker 174
1:32:40
but we got big problems in the water infrastructure industry all over the state.
Speaker 172
1:32:45
If you look at the amount of water infrastructure that is in the ground, that is being utilized, that is past its useful life, and does not have the proper economic base and does not have the proper customer base to be able to maintain that infrastructure, we're looking at a huge problem and I don't want to say this is the solution but we need big ideas we need big ideas in the industry to address and chart tackling the problems that we have
to make sure that we're providing clean water to everybody in our communities at an affordable rate the affordable rate is the big issue okay and how long have y'all had this big
Speaker 168
1:33:25
idea we've been working on this big idea for about three years
okay because i i'm just saying you've had three years to think about it you know i've had 30 minutes so yes sir uh okay thank
you thank you senator johnson thank you senator clark senator sullivan you have a question yeah thank
Senator Dan Sullivan
Unverified
1:33:45
you mr chair you know i've got some issues going on in northeast arkansas congressional district one
whereas the state makes determinations on how it's invested and how they redirect their resources. Senate Congressional District 1 in several instances gets about 10% of that money and 45% goes to another congressional district, 25 to another congressional district and the other two are left to split and my district is the worst. And so I'm really concerned when we start allowing government or quasi-government entities to engage and they decide where the money goes. I think the history of our state
is that that money is not necessarily distributed in an equitable manner. And although these plans start out as a great idea, we're going to make some money or diminish our losses. However that is, that really concerns me as Senator Clark is describing how we account for that. So what is in the what's here to make sure that money is distributed equally and actually improves
the taxpayers and the of the region how do we guarantee that am i not clear what
Speaker 181
1:35:07
i'm asking i'm trying i'm trying to get to what you're asking i'm
Senator Dan Sullivan
Unverified
1:35:14
sorry i'm still Yeah, so the underlying question is, you're going to take money and invest it in a property that would make money or make a profit. That's the bottom line. So, you know, what's
the protection for the taxpayer that that money is actually used for that?
How does that happen? Because the history of the state is that that doesn't happen. It's exactly what's going on now. I'm sure you're familiar with ADFA and when you look at all the ADFA money that's going out with discretionary purposes my district and my community loses so and although this is a smaller district the same principle applies.
Senator Mark Johnson
Unverified
1:35:59
If I could Mr. Chairman, Senator Sullivan I hear you and I agree I think the
The important distinction to note here is that CAW is not going into the land development business. These are properties they already own. They're assets that are nonproductive. And his board is basically saying, what's the best use of making this property productive? And in doing so, it would, you know, the rising tide raises all boats. Ultimately, and again, this is probably measured in pennies per gallon or per meter, but in the larger scheme of things, it would help put some downward pressure on prices of water for all the subscribers in the entire system, hopefully including me someday, and would also, in the face of the fact that there are other pressures, are to bring those prices up.
So it's not like they're saying, gosh, there's a piece of land over there. Let's go buy it and start developing. They're not doing that. They're taking something that's more or less stranded and nonproductive and coming up with the best idea they can to make it productive. And the revenue stream from that would be of general benefit to everybody that gets their water from central Arkansas waters. Again, I'm very sensitive to what you're saying. And you and I have talked about this ad fund, other issues on the incentive monies and all that. But this is probably not a real good comparison.
Senator Dan Sullivan
Unverified
1:37:34
Well, my experience is that a rising tide doesn't rise all boats. My experience is just not
that at all in my district. And so why don't we just sell, if we have properties that are not used, how come we just don't sell them? And then other developers, as the Senator said, other developers would come in and
Speaker 174
1:37:56
develop properties that would be revenue generating. We've looked at that option and then looked at
Speaker 172
1:38:02
whether, okay, Is that one-time capital influence or do you help support and help build momentum within an area?
To go back and to answer your first question, we have a board of seven officials, seven commissioners. And like I said earlier on, they are subject to the vote of the city board of directors of Little Rock and the City Council of North Little Rock for those seven positions. And so with that oversight, that's the check. I mean, that is the, you asked what's the check,
and the check comes at are those commissioners doing what Little Rock and North Little Rock as the appointing entities, as the affirming entities of those appointments, are they doing what they're supposed to
Speaker 171
1:38:51
be doing? So that's your check as to. Yeah, but, you know, again, I
Senator Dan Sullivan
Unverified
1:38:56
hate to enjoy going back to Epic. I started to say I hate it, but they are also run by a board, and they also have oversight, and that's what ends up happening. Again, I'm not opposed to what you're saying, but I really have concerns
rather than we just turn that back into, even though it's one time, it's back into private hands, and that one time, as you've said, generates more income. so that it's not only a one time it's a forever thing also yeah we could debate back and forth under that I understand what you're trying to do I'm just not sure at this time if I'm ready to vote for that until I get some of these other issues cleared up and have some confidence that our state is moving in an equitable manner thank you Mr. Chair if I
Senator Mark Johnson
Unverified
1:39:46
could follow up on that Mr.
Chairman. Senator Zellifan, I feel your pain. I think you know
that. But again, let me emphasize and you ask, well, why doesn't somebody just buy it and develop it? Well, if you move out in my neighborhood in the west end of town out by the off-chanal, you'll see apartments flying up. You'll see developments flying up. And so certainly developments going on. We've got a new Costco going out there. But CAW doesn't own lots out there. That's where the, there's areas that's
hot and areas that are, they're warm, let's say, maybe even a little cool. And that happens to be the assets that CAW has to try to do something with. This is not an open-ended thing, like I said, that puts them into the development business. It just lets them, as other entities could do, but not specifically this governmental entity without this bill, maximize the best use of that property for the organization as a whole,
which is a public entity, the public benefits if their water rates are lower. And so it's not like we're taking state money and saying we're gonna give some of this over there. This is strictly would be a venture that would be funded through the financing markets and would not involve the state of Arkansas coming in with a subsidy. I hope that's true, Ted. I might have to withdraw my sponsorship if it were, but this is still being done.
But it's because they have, in effect, a stranded asset that's not productive, and this is a tool to give them the opportunity that another governmental entity could go ahead in the same situation do and to make it a productive part of their portfolio of what they have to help. One more little thing to help keep the rates a little lower. Yeah, I
appreciate that and I'm going
Senator Dan Sullivan
Unverified
1:41:50
to vote to let it out of committee and I think the debate is good and the discussion
is good. Thank you for bringing these issues up, Senator. I'm just very
Senator Mark Johnson
Unverified
1:42:01
cautious. Thank you. Well, I'm always you know, I'm a capitalist a free enterpriser and I'm always leery when government starts doing things that are not properly in the private sector, but I think this is different because they're just trying to use some good management. You know, too often we see the other side of that coin where governmental entities really don't care about trying to keep their costs down
and their revenue up, except for just raising rates or taxes on everybody. But this is a case where they've tried to put some business practices in and how can we make this asset produce for the benefit of the people we serve. And so that's the reason that I would ask that we give them this, and I think quite limited authority, to do this. And I hope it's, if anyone sees a manner that it's not limited to that, I would certainly tighten this up to make sure that that's done.
Speaker 168
1:43:02
Senator Clark, do you have a question? yes who owns
Speaker 172
1:43:13
central arkansas water that is a great question but my answer for 20 years has
Speaker 168
1:43:19
been the rate payers is that who's on the
Speaker 172
1:43:23
is that who's on the corporate papers central arkansas water and who is central arkansas water central arkansas water was a as a government body politic that was formed by filing an Articles of Incorporation
as a governmental body politic with the Secretary of State pursuant to the Consolidated Water Works Authorization Act of 2001. And then the cities of Little Rock and the cities of North Little Rock contributed all of their water improvement assets into Central Arkansas water to continue to provide potable water to the service territory.
Speaker 168
1:44:06
And Central Arkansas Water has a board? Correct, sir. How is it determined who serves on that board?
Speaker 174
1:44:13
There are seven members of that board. Four must be residents of the city of Little Rock. Three must be residents of the city of North Little Rock. When a commissioner's term expires or the person leaves prior to it, they submit a name to the cities of Little Rock and the cities of North Little Rock for approval.
Speaker 168
1:44:38
Okay. Again, I don't have any doubt about the sincerity of the project, but I still have a number of concerns. A lot of people are dependent on Central Arkansas water for water. Yes, sir. More than anyone else in the state. About a half million people. Yeah. What's the, you know, who's the second largest water provider next to Central Arkansas water? Beaver Fork, which has four customers. It's a
wholesale customer. Next one below that would be...
And Beaver Fork serves about how many people through all their... A little less than that, about 400,000 people through the city of Fayetteville, Bentonville, Rogers, and
Springville. So, the, because part of my concern here is all these people that depend on Central Arkansas, water for water, and that's no doubt what you believe that you will continue to focus on. But, you know, there was a time when I was mainly a lumberyard, and I still look like a lumberyard, but I'm 80% flooring.
uh and so when you when it was said that you're not going into property development well actually you are going into property development it may not be your intention to expand it but entities tend to look at revenue sources and and what's doing the most good Uh, and so with the utility, I have a concern, you know, I go back to the scripture where Jesus said you can't serve two masters, uh, is that there could be a time where if property
development works out, that property development is central Arkansas water's concern and not water when we've got so many people depending on Central Arkansas water for water. And the other thing is you can only, you know, you can raise, some people can raise a little money, some people can raise a large amount of money, but regardless, it's limited. And whatever money goes into one project can't go into another. And so right now you might have extra, but I can envision a day down the road where it's possible that there's a choice between investing in water and investing in something else now that we've got the divergent path.
Can you allay my concerns? I
Speaker 174
1:47:16
can the way I think to belay your concerns is that central Arkansas waters primary purpose central Arkansas waters most every
Speaker 172
1:47:29
time we do a survey with our commissioners or with our public or with our elected officials within our thing that say what's our number one job
it's to provide high quality water and that is and i say that with they'll even say at low rates is number two you have to provide the high quality water we're working on a 2050 strategic plan right now um you know we're not a five-year strategic plan but a 30-year strategic plan. And that 30-year strategic plan is how do we continue to provide high-quality water to all of our customers into the future? And how do we make sure we do that? And part of that, a very
small part of that, is having tools necessary to make sure we do it. And so the way
Speaker 174
1:48:26
I alleviate your concerns is to say, you know, we do a, we do a, I'm going to
Speaker 172
1:48:33
say this a little bit differently. We have a meeting every month and at the top of the page is times we drop the ball and that's always got to be zero. And the ball is making sure we provide high quality water to the customers we serve. And, and we've got to track rid of that. And that's what we're working
on doing for the next 30 years. And so, you know, people don't, nobody's getting rich on this deal. You know, nobody's, there's not, this is a way to utilize assets in the most productive way to make sure that we can continue to do our first mission, which is is
Speaker 168
1:49:20
providing high-quality water. And another concern is you're basically government
or quasi-government the way you're set up? Yes, sir. And so we've got government competing with the private market, because one's water utility, the second is now
Speaker 172
1:49:47
property business. I should have brought some folks with me, but the developers in the areas where we have property
Speaker 174
1:49:56
are all about it because that just brings more synergies
is the word they use to the area. And so our property is better off with you doing what you're
Speaker 168
1:50:10
doing. And I understand why they think that's possible, but again, the other developers are going another direction, not that direction, and you're, again, while your
focus is water, you're going to have how many units? This project is 18. You're going to have units to build, to rent.
Somebody's going to be focused on that. And, of course, there's no limit in this bill. Correct. So it could be $100,000, $200,000, and like I said, whatever your focus
is today, making sure that properties are rented, et cetera, and has to become somebody's focus on down the road. Correct? Yes, sir. Okay. All right. Thank you.
Speaker 119
1:51:11
Thank you, Senator Clark. Any other questions? Committee members? Anyone
in, anyone in the audience that would like to speak for or against this bill? If not, the chair would entertain motion
Senator Mark Johnson
Unverified
1:51:33
mr. chairman if I could make a brief closing remarks all right I as I said and I want to clarify my remarks senator Clark picked on I think they are
not going in the development business in that they're not going to go out and acquire new land and start like a typical developer would from scratch this is an asset they have they're trying to maximize its benefit to their organization and therefore to the customers and rate payers that buy water in central Arkansas. As I said, hopefully I'll be one of those in the next few years. I try to get, avoid using metaphors and getting carried away. I started to say something about priming the pump, but that's probably the
worst one I should use when talking about water. But let me use the one of, they're trying, they have lemons and so they're trying to make lemonade. These properties are not something that, you know, developers are beating their door down and bidding on to and the best and use that they can make of these assets that they have again they're not saying it's bad things but they're comparatively lemons and they're trying this is the best use they've come up with is to make lemonade this way so it's an
authorizing thing it gives them a tool I think if it got to the point where they were abusing it and using it as a means to to get around other restrictions on public entities that should be doing things that are public and not competing with the private sector I'd be the first one to come up with legislation to rein that in but I I think this is entity I've watched since it was created by the two cities I've watched the progress they've made how they've they've
They've really helped develop central Arkansas in having a higher quality water taking over areas like Maumelle, which is the largest city in my district that had, quite frankly, a pretty sorry water system. It was designed for a city that was going to be maybe 5,000 people, and it's now about 17,000 people. And thanks to Mr. Bohannon and the board that put together, I'll call it a rescue plan, And Maumelle has safe, clean, potable water and not shutoffs like they had just a few years ago.
So they're doing the right thing in our region. Again, this is just one more tool in their tool chest to continue to do their job and gives them an authority that we already grant to other types of public entities that have boards that are overseen by elected officials. So because of that, I would appreciate a good vote. And Mr. Chairman, I move do pass. All right. We have a motion on
the floor. Do pass. Is there a second?
I have a second. All those in favor, say aye. Aye. All opposed? No. 3, 4. Senator Johnson, your bill fails. We don't have five. We don't have five vote. Hang on a second. 1, 2, 3, 4, 5,
6 of us here. Yeah, there's five. Your bill passes. Pardon me. Thank you. Thank you.
All right. Any other business? If not, we're adjourned.
Agenda
Call To Order
SB182 J. Sturch TO AMEND THE LAW CONCERNING DELINQUENCIES IN IMPROVEMENT DISTRICTS.
SB243 M. Johnson TO AMEND THE LAW CONCERNING INTERLOCAL COOPERATION CONCERNING THE HEALTH INSURANCE OF RETIRED EMPLOYEES.
SB282 M. Johnson TO AMEND ARKANSAS LAW CONCERNING CONSOLIDATED WATERWORKS SYSTEMS; TO AMEND THE GENERAL POWERS OF A PUBLIC BODY; AND TO AUTHORIZE FINANCING IMPROVEMENTS WITH REVENUE BONDS .
Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — CITY, COUNTY & LOCAL AFFAIRS COMMITTEE - SENATE AND HOUSE, Feb 9, 2021 | Agenda | 1 | Official source ↗ |
Speakers
Senator Gary Stubblefield Chair
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Senator James Sturch
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Senator Dan Sullivan
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Senator Kim Hammer
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Senator Terry Rice
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Chair
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Senator Mark Johnson
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William Matzalbopa
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Tad Bohannon
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