Airport in Little Rock gets go-ahead to fund levee

FAA says Clinton National must benefit from fees paid

A map showing the location of Bill and Hillary Clinton National Airport funded Levee
A map showing the location of Bill and Hillary Clinton National Airport funded Levee

The state's largest airport can make payments to a local levee district with some restrictions, according to guidance from the Federal Aviation Administration.

Pulaski Drainage No. 2 Improvement District maintains a 7.2-mile levee and its pumps that provide some protection to Bill and Hillary Clinton National Airport/Adams Field as well as the rest of that part of Little Rock, which includes industrial and residential areas.

The district levies a fee on landowners' property tax assessments, and that revenue pays for the operation and maintenance of the levee and pumps. But the airport, in recent memory, has made no such payments.

The district is struggling to generate enough money to maintain the levee and the pumps. Since 1998, it has sought payments from the airport, which has acquired several hundred parcels in the levee district, shrinking the district's tax base. Most recently, district officials argued that the airport was responsible for 70 percent of the district's annual expenses, or about $245,000.

Officials have said in the past that as a governmental entity exempt from taxes, the airport wasn't required to pay those assessments. But the district's legal counsel has said those assessments don't constitute taxes.

The airport also maintained the payments could constitute revenue diversion under FAA regulations, which limits money generated by the airport to its capital and operating costs.

And even if Clinton National were required to pay the assessments, airport officials say, the amount would total no more than $4,000 annually under the airport's analysis of 640 parcels it has acquired within the levee district since 2005.

The airport also cites a 2011 study by the Federal Emergency Management Agency that shows the majority of the airport property and "virtually all of the runways" to be above the 500-year flood plain. The district's levee protects the area from 100-year floods.

"Accordingly, based on the FEMA study, the majority of the airport is above flood stage even giving consideration to events that make the levee a non-factor," the airport said in its request for guidance from the FAA in January. "This would appear to demonstrate that the airport does not receive an appreciable direct benefit from the district's services."

Airport officials sought guidance from the FAA, which responded last week.

The one-page letter from Justin Barker, the acting manager of the Arkansas/Oklahoma airport district office in Fort Worth, said the airport's payments to the levee district are permissible if the following conditions were met:

• Clinton National "must stipulate that a direct benefit is received" from the district for any money it pays the district.

• Payments from the airport to the district can only be made on a "going forward basis," beginning Jan. 1, 2018.

• The airport must document to the FAA that the rate or methodology used to determine how much the airport will pay "is non-discriminatory and is identical to that being used to charge all other ratepayers."

The Little Rock Municipal Airport Commission will hold a special meeting today to discuss the matter.

The matter came to a head last year, according to a previous article in the Arkansas Democrat-Gazette. After hearing the concerns of the residents, many of whom are low-income, airport officials now say they want to find a way to help the improvement district, but they first must get federal approval.

At that time, Clinton National owned 95 parcels within the levee district and constituted the largest landowner within the district, which has 940 parcels in the area it protects.

The improvement district's fee was increased in December 2016 for the first time in several years to 2.3 mills assessed on property tax bills.

Property is taxed on 20 percent of its value. The assessed value of a $100,000 home is $20,000. A mill is one-tenth of a cent, or $1 for each $1,000 of assessed value. So 2.3 mills levied on a $100,000 property would be $46 annually. Most properties in the area are valued much lower.

Of the 940 parcels in the district at that time, 361 were owned by businesses and would owe a total of $98,002 in fees under the new millage rate. The airport owns 95 of those businesses, and the city of Little Rock owns seven.

Another 568 parcels are owned by homeowners, who would owe a total of $6,200 in fees under the new millage. The remaining 11 parcels in the district have no assessed value.

After county fees and nonpayments, the improvement district netted $55,245 last year under the old millage rate. Total expenses for 2016 were $188,581.

As a result, district expenses are exceeding its revenue, and it won't be able to continue to maintain the levee and the pumps.

Larry Almon, who is a member of the levee district board, said he is confident about reaching a resolution with the airport after seeing the FAA letter.

"We are extremely optimistic we can work within their guidelines," he said in an email Monday afternoon.

Metro on 04/24/2018

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