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Residents debate incorporation.

Cooper Communities Finds Itself Caught in Cross Fire of Bella Vista Dispute

PROPERTY OWNERS IN Bella Vista Village, the Cooper Communities Inc.-developed community in Benton County, are debating whether to maintain status as a community governed by the Property Owners Association (POA) or incorporate into a city.

The ongoing budget problems faced by the Bella Vista POA have given recent impetus to the incorporation movement. The POA budget covers the cost of street maintenance, fire and police departments and the upkeep of the myriad of recreational facilities that have lured people to resettle in this community since its creation in 1965.

Recent budget shortfalls -- such as the golf division's $315,000 debt -- have not been remedied, and efforts to raise the $14 monthly property owners assessment fee have failed.

The assessment increase has overwhelming opposition from absentee landowners who outnumber residents by a ratio of 5-to-1. The only alternative for additional revenue would be to continue raising fees charged for use of recreational facilities by property owners.

Bella Vista resident Paul Baker is heading up the Citizens for Incorporation Committee (CFI) in an effort to obtain the necessary petition signatures to submit for incorporation. He sees the current problem as nothing less than the future of Bella Vista.

"The quality of life here is going to deteriorate if we don't do something," Baker says.

His committee attacks the POA-commissioned Incorporation Study White Paper completed in 1992 as an in-house study heavily influenced by Cooper Communities and meant to scare residents against incorporation. The study recommended against incorporation.

Baker points to the potential revenue boost that incorporation would deliver from state and county turn-back funds, but he also sees the issue as one of both necessity and fairness.

"We have more residents now than we did in 1965 so we have more expenses," Baker says. "They've added roads, golf courses, lakes and other services to meet the needs of a growing population."

Baker says the absentee landowners subsidized residents for years with the monthly assessment. But now, with fewer absentee landowners to residents, the monthly assessment is not enough to cover village expenses and meet future needs. About 37,000 lots are sold in Bella Vista, but only about 6,000 houses have been built in the area.

"I believe the residents should start paying their own way," Baker says. "They've had it too good for too long."

Same Argument

Ironically, this is the same argument made by the non-resident property owners, who are against incorporation.

The non-residents have been blocking the assessment increase because they are not using the facilities the funds are used for. At the same time, they don't want the area incorporated because that would also increase their expenses via taxes -- again, subsidizing the resident property owners standard of living.

The community's declaration does not provide for a tiered assessment fee for resident and non-resident property owners, and that's a possible solution to the problem.

"The non-resident property owner is paying his monthly assessment like the rest do," says Roger McMennamy, president of Cooper Communities. "So when the Property Owners Association says they need more money for the amenities, let's raise the monthly assessment. The guy who lives in Minnesota and only comes down once a year feels like, 'If he wants more money to keep those amenities, then let him pay more user fees.'"

Incorporation would bring turn-back revenue to Bella Vista, according to the White Paper study. Turn-back funds generally are the funds returned to the municipalities that have been collected from county sales tax, road taxes and other local and state taxes.

With its population of 6,500, Bella Vista misses out on about $1.7 million annually because it is not an incorporated city and cannot receive turn-back funds.

Under Arkansas law, municipalities can levee a 5-mill property tax without a vote or referendum, and that could bring total revenue for Bella Vista to $2.2 million annually without further revenue sources. However, opponents of incorporation say Bella Vista would need much more than these sources in order to survive.

Dick Russ, a Bella Vista resident against incorporation, estimates that even with these revenue sources, an incorporated Bella Vista would need an additional $500,000 annually just to provide existing services. And, he says, that's without taking into consideration the purchase of equipment to provide them.

"Where will a city get the additional money to buy all the equipment and buildings it will need to provide these services?" Russ asks.

Cooper in Cross Fire

Caught in this cross fire is Cooper Communities, whose officials maintain that incorporation is a property owners issue.

While supporting an assessment fee increase -- virtually impossible given the opposition by the more numerous absentee landowners -- the development company does not view incorporation to be in Bella Vista's best interests.

"Cooper Communities is concerned with the fiscal viability of an incorporated entity in Bella Vista," says Gene Groseclos, director of community relations for Cooper. "We're concerned with the ability of Bella Vista making it financially as a city and concerned with the potential conflict between the POA as it exists now and the added layer of government that would be present in an incorporated entity."

For now, Bella Vista is considering an increase in fees levied at recreational sites to help meet budgetary needs. Incorporation opponents think that will be the solution to the current problem, but others, like Baker, don't think that's the answer.

"I don't think they can raise enough money that way to meet their needs," Baker says. "And if they can, then where do you hit the point when people won't use these facilities because they cost too much?"
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Title Annotation:Bella Vista Village, Arkansas
Author:Spivey, E. Patrick
Publication:Arkansas Business
Date:Oct 18, 1993
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Next Article:Fiscal fatality.

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