Benton closer to annexation
Exit 114 area likely to become part of city sooner than expected
By LEWIS DELAVAN News editor

COMING SOON TO BENTON? LEWIS DELAVAN PHOTO RJ Properties plans to build a Big Red Valero convenience store on U.S. Highway 67 near Interstate 30's Exit 114. The store will have a McDonald's restaurant inside.

Land being developed across the Saline River appears headed for annexation by summer, Benton officials say.

Benton Mayor Holland directed City Attorney Brent Houston last Thursday to draw up an ordinance to have land owned by Exit 114 Properties and its partners annexed into the city.

County Judge Lanny Fite said that, once he receives an annexation request, he has 30 days to review the paperwork and determine if it meets statutory requirements.

After it's returned to the mayor's office from county judge it will be presented for council approval as soon as possible, Holland said.

Under terms of the pre-annexation agreement, a commercial site being developed by RJ Properties also will be annexed into Benton, Holland said. Both projects are near Interstate 30's Exit 114.

The Streamlined Sales Tax Project, which became state law Jan. 1, changed the city's outlook for the area, Holland and community development director Marsha Guffey said. The city formerly would benefit from the local sales tax on items sold by Benton businesses, but Arkansas now assesses sales tax based on the point of delivery.

Thus, building materials sold in Benton for delivery outside the city are taxed at the rate for the new address - depriving Benton of revenue.

The voluntary Streamlined project urges states to adopt a uniform sales tax code, so taxes can be easier collected on mail-order and Internet purchases.

Last year, the Benton City Council approved two pre-annexation agreements for the developments, but no specific timetable was set for annexing.

Some opponents felt the city "gave away" too much to the developers. Don White and Harlie Ables are spokesmen for Ratepayers Opposed to Political Favors, a group that has initiated an annexation petition drive.

They said they're not opposed to the city's expansion - they just want the new development annexed into Benton so the city will enjoy revenue from the growth, as well as ensuring that the construction work meets city code and storm-water enforcement. Otherwise, Benton stands to lose "hundreds of thousands of dollars in revenue," they said. The Ratepayers group also contends that Benton taxpayers are "subsidizing" the wastewater line leading to the two developments.

Benton Utilities manager Terry McKinney said, however, that the developers are paying their proportional share to extend the service, about $283,000. Residential customers will pay a $1,000 connection fee, and commercial projects will pay a higher fee to connect, based upon the size of the connection required.

Connection fees alone should eventually provide a profit for the utility, McKinney said. Exit 114 partners Dan Moudy, Tom Baxley and Mike Duke plan a 492- acre development with several subdivisions and convenience stores. They told a Voice reporter that they are ready to annex into Benton.

RJ Properties will build a Big Red Valero convenience store on U.S. Highway 67. The store will have a McDonald's restaurant inside.

Exit 114's commercial zone will be along Interstate 30.

Also, the three Exit 114 partners and Aaron Jones previously donated 16 acres to Benton School District for a proposed elementary school. The school site is just north of the pending development.

Benton Utilities is extending wastewater service to points near the developsee ments. The 12-inch forced wastewater line has crossed the Saline River and is nearing U.S. 67 and Arkansas 229.

Construction manager Dewayne Hood said the project includes 9,900 linear feet of 12- inch forced wastewater main, a pump station and 1,440 linear feet of a 15-inch gravity sewer line.

Roberts Construction of Forrest City won the bid for $800,047. The actual cost won't be known until the project is completed, he said. Work is ahead of schedule, he noted, and should be completed by summer.

The developers are responsible for boring under the highways and extending the lines to the developments.

Benton had 12,838 water and 12,452 sewer customers at the end of 2007, but more are needed to repay bonds. Repayment terms set by the state call for larger payments in future years, when more customers were anticipated.

Growth and state mandates have led to numerous water and sewer improvements, McKinney said.

Holland said it wasn't bad for the area not to be immediately annexed last year, as the city would have gained the responsibility for providing police and fire protection immediately.

The area is ripe for growth, regardless of which city obtains it. "That area is going to grow and some city is going to annex it," Holland said. "Our city can grow to the south and to the north."

Alderman Greg White said he is pleased that annexation is moving forward. He agreed that the full impact of the Streamlined tax caught the city by surprise. He also said that, while a committee meeting was held immediately before the city meeting where the pre-annexation agreements were unanimously passed, aldermen didn't have a chance to read the changes before the vote.

The final version left the city's authority to conduct inspections in place, but removed the developer's duty to obtain inspections, White said.

Annexing the area will make any concerns over the changes a moot point, he said.

On the negative side to annexation, White said, would be the city's increased obligation for police and fire protection. But those needs may be met through interagency agreements, similar to what was done for Hurricane Lake Estates, he said.

As the city can afford it, new substations can be built to serve the new areas.

Alderman Joe Lee Richards said he's undecided on annexation, as he's certain it won't bring in as much revenue as it costs. The city should eventually recoup its wastewater line's expenses, Richards said, but he fears it could take up to three decades.

In the meantime, the city would immediately be obligated to provide police and fire protection.

With the just-approved rise in the Benton School District millage, along with potential increases in several other taxes, as well as the uncertainty of the economy and rising prices, Richards said he remains unsure how he will vote on annexation.

Alderman Charles Cunningham said he thinks it's time to annex the developments. He believes that, as the area grows, the city will be able to provide police and fire protection.

Alderman Steve Lee told the Voice recently that he favored annexing the developments at the "appropriate time." He said that as development comes, it will be time to annex, and he has "no doubt" the area will become part of Benton, "sooner, probably, rather than later."

The mayor said many cities would envy Benton's growth. "Last year we sold 374 residential building permits, which is pretty good. We sold 36 commercial building permits. It was closer to 500 permits the year before, but that's still a good number," he said. "Jacksonville was very proud that they had sold 119 building permits."

Developers and city officials agree that growth is vital for any city.

"We want to be a city where people want to come to shop and to live," Guffey said.

Annexation will benefit residents of the new neighborhoods through police and fire protection, Moudy said. "When government and citizens work together, we can accomplish a lot," he said.

Baxley said real estate is always a local business, so trends must always be considered at the community level - even neighboring regions can differ. Saline County hasn't experienced the "huge swings" seen on both coasts, where an enormous rise in property values was followed by a major decline.

In a related issue, the Ratepayer group headed by Don White and Ables fears that residents of Christie Acres will pay too much to gain sewer service. The area lacked sewer service when it was annexed into the city.

However, Benton officials said most residents of the neighborhood wouldn't pay connection or plumbing fees.

As required by the grant, residents will pay a surcharge on basic water rates. Developers pay for infrastructure on new neighborhoods, Holland said, but the city is faced with raising funds to upgrade older areas.

Wastewater rates were set to repay a $26.5-million loan obtained to meet federal wastewater dictates.

Utilities commissioner Leroy Allen told the council before the pre-annexation vote that growth offers a substantial return on Benton's utility investment. Benton has been providing drinking water outside the city limits for many years.

The city commissioned a 20- year wastewater master plan in 2004, Allen said, to prepare for federal clean-water rules.

The city borrowed $26 million to rehabilitate the wastewater utility. Work is well under way, including an equalization basin. The basin was recently completed - a year ahead of schedule and under budget. (See related article.)

No general revenue is spent on any utility operation.

Allen said that, with the potential development, more customers would be helping to repay the $26 million debt. The wastewater utility will receive more than $1 million in tie-on fees, he said, and the utility contributions and fees from all possible developments in the planned service area west of the river will exceed $4 million.

Without adding more customers, each customer would pay about $4,000 to repay the loan. "If we increase our customer base, more people will be paying less," Allen said.

McKinney, Holland and Guffey all agree that adding customers will benefit all water users.

"When government and citizens work together, we can accomplish a lot," Moudy said.

Baxley said Saline County has enjoyed good, steady growth throughout his 26 years working here. The "huge swings" on the coasts that saw a rapid rise in property values and a rapid decline haven't happened to that extent here.

Benton Community Development Director Marsha Guffey said she is excited about the Exit 114 area development, calling it the "last frontier."

"It is the last clear exit between Little Rock and Texarkana with significant property for development," she said.

Guffey said the move was historic because Benton crossed the Saline River with water and sewer lines.