Where did $6.8 Million Go?: Improvement Districts Part 3

Where did $6.8 Million Go?: Improvement Districts Part 3

There is an oddity about the way homeowners on Emerald Mountain and Valley Ridge are taxed. In addition to the normal property taxes, there is one or two line items called Improvement District. All homeowners in Emerald Mountain and Valley Ridge are in both Districts 53 and 54. All Emerald Mountain and Valley Ridge homeowners are charged a property tax line item of $429 called Improvement District 53 property tax. While only 204 homeowners in the older part of Emerald Mountain are charged an additional $920/yr line item called Improvement District 54. The reason for this odd taxing scheme has to do with the bonds that were issued for each phase of development.

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History of the Mountain: Improvement Districts Part 2

This is a little background on the history of the Emerald Mountain/Carrington Place districts the timing of events is important to understand the district's financial issues that will be explained in the next few parts in this series. If you have not, I recommend reading part 1 as a good primer for what an Improvement District does as a local government.

Part 1: What is an Improvement District?

Part 2: History of the Mountain

Part 3: Where did $6.8 Million Go?

Early History

At the September 1998 City Council meeting, the City Council passed City Ordinances in response to the  petitions submitted by Doug Loftin and his business partners to form the South Fork Ranch (District 6) and Carrington Place (District 10) improvement districts (local governments that collect the property taxes) [1][2]. On June 1, 2000, Doug Loftin resigned as a commissioner of the Carrington Place (District 10), citing the "hostile attitude of the other commissioners and the inability to communicate" [3].

Between 2000 and 2006 the Carrington Place Improvement District collected over $69,000 [4]. There appears to be no public record of where that money was not spent, but it was not used on any of the existing improvements those were paid for with the Emerald Mountain improvement district (District 53) construction funds [5][6].

Formation of Emerald Mountain (Districts 53/54)

September of 2005, Doug Loftin and the other owners of Hometex, LLC, went through a similar process with the City Council to form two Improvement Districts in Emerald Mountain (Districts 53/54). District 53 and District 54 have the same district lines and were formed with the same broad powers to build sanitary waterworks, sewer collection systems, green areas, landscaping, lighting, playgrounds, swimming pools, tennis courts, and roads. The purpose of both districts was again very broadly stated. District 53 was supposed to establish recreational property and improvements and District 54 was supposed to construct utilities and access to other residential subdivision infrastructure[7][8].

For the next two years Emerald Mountain (Districts 53/54), Bank of the Ozarks acted as the Trusty in a four series of bonds that were worth in total $6.8 Million. The bonds came with some significant overhead, so only $5.8 Million was actually deposited into the construction fund accounts [9][10][11].

Relationship between Carrington Place and Emerald Mountain 

In 2007, Carrington Place (District 10) entered into an legal agreement with Emerald Mountain Recreation (District 53).  The agreement is still binding and required Emerald Mountain to pay for and build specific facilities in Carrington Place (pool, walking trails, play houses, basketball court) and allows joint use of all improvements.  In exchange Carrington Place sends all collected property taxes to Emerald Mountain Recreation (District 53) for maintenance of joint district facilities and for construction of new facilities[xx need link]. The agreement prohibits Emerald Mountain Recreation (District 53) from using any Carrington Place (District 10) funds to make any debt payments[12].

Construction Status

Construction started up in 2008 and the swimming pool opened that summer. Most of the existing improvements (walking trails, playgrounds, basketball court, front entrance) were completed by the end of 2009. Doug Loftin promised that "More recreational facilities are planned for 2009 and beyond"[13]. It has been at least seven years since any of the Districts have built anything new and the districts do not have the finances for any major new improvements.

Emerald Mountain, Valley Ridge, and Carrington Place Construction Update

Emerald Mountain, Valley Ridge, and Carrington Place Construction Update

Bank of the Ozarks (BOTO) is getting near the end of the preparing 31 lots in Emerald Mountain phase 6 for builder(s).  They have all utilities in place, as well as, the curbs and gutters, and recently opened up the final stretch of Skyline Road. Bank of the Ozarks has stated that they believe that enough homes will be sold by the end of 2018 that the ground will be stabilized[1]. This is unsurprising since they are selling the homes in Meadows Edge development in Alexander as fast as they are building them[2].

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What is an Improvement District? Improvement Districts Part 1

What is an Improvement District? Improvement Districts Part 1

Improvement districts are independent local governments formed under several different provisions of Arkansas Code. Generally improvement district are formed to serve a very specific public service.  There are many different types of improvement districts, but a few common types you may be familiar with are mosquito abatement, sewer, water, fire, or drainage district...

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Construction Starting Up Again: Emerald Mountain Phase 6

Emerald Mountain Phase 6 Location | Credit:  BOTO, July 14, 2017

Emerald Mountain Phase 6 Location | Credit: BOTO, July 14, 2017

Bank of the Ozarks (BOTO) Arkansas Properties [1], has recently started clearing land for Emerald Mountain Phase 6. This is the last phase of the original plan for Emerald Mountain and will connect Skyline Drive all the way from County Line to East Azella.  The phase includes lots for 31 new homes. More interestingly, BOTO will dedicate a 2.48 acres parcel to the City of Shannon Hills. There 2.48 acres parcel is on a steep slope and not all of it can be developed, but more interestingly the parcel could be used to connect 15.4 acres of land owned by the Emerald Mountain Improvement District to Skyline.   

Emerald Mountain Phase 6 Details Credit: BOTO, July 14, 2017

Work Beginning on Emerald Mountain Phase 6 August 26, 2017 Back in July [2][3], Rausch Coleman purchased 11 lots empty lots from BOTO.  Rausch Coleman has started construction on 10 homes in Valley Ridge subdivision and has one empty lot in the Parkway Meadows Phase 3 that construction has not started on.  This is welcome news as the empty lots have had many issues with not being maintained and in late as June, I did stated that I did not think construction on new homes was anywhere in sight. Hopefully, the new construction continues as there are just under seventy lots without homes currently under construction between Emerald Mountain Phase 6 and Valley Ridge Phase 2 and 3.  

New Home on Valley Ridge Drive August 26, 2017

Orange Valley Circle off of Valley Ridge Drive August 26, 2017

South view of Valley Ridge Drive August 26, 2017