Bill and Hillary Clinton National Airport/Adams Field will make a voluntary annual payment of $77,901 to the Pulaski Drainage No. 2 Improvement District for the benefit it derives from the levee the district maintains.
The Little Rock Municipal Airport Commission, which sets policy for the airport, voted to make the payment at a special meeting Tuesday afternoon in response to a Federal Aviation Administration letter that said such payments could be made with some restrictions.
The levee district maintains a 7.2-mile levee and its pumps that provide some protection to the Little Rock airport and surrounding industrial and residential areas east of Interstate 30 and along the Arkansas River.
The district levies a fee on landowners' property tax assessments, and that revenue pays for the operation and maintenance of the levee and pumps.
The levee district, struggling to generate enough money to maintain the levee and its aging pumps, has sought some payment from the airport, which has said that it is exempt from paying taxes as a governmental agency. Levee district officials have disagreed with that view.
In the past, Clinton National officials also have asserted that FAA regulations also limit their ability to spend money on anything beyond capital and operating costs, but also said they wanted to find a way to help the levee district.
Officials with the airport and the district have met several times over the past year to work through the impasse, spurred in part by an Arkansas Democrat-Gazette article last May outlining the levee district's struggles.
In January, airport officials sought guidance from the FAA. In an April 16 letter, the federal agency said the payments could be made if the airport could show it directly benefited from the levee district.
The FAA also decreed the payments could only be made on a "going forward" basis beginning Jan. 1, 2018, and the methodology used to determine the payments must be nondiscriminatory and identical to that being used to charge other ratepayers.
Airport officials came up with the $77,901 figure to pay the levee district based on the insured value of airport property as of September 2017, reasoning that flood insurance is available to the airport because the levee that protects the airport is federally certified.
The improvement district's fee was increased in December 2016 -- the first increase in several years -- to 2.3 mills assessed on property-tax bills.
Property is taxed on 20 percent of its value. 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.
The total estimated value of the property and land at Clinton National is estimated at $224,531,713. For the fee calculation, the airport used an appraised value of $168,398,784.75, or 75 percent of the total estimated value.
The assessed value then is $33,679,757, which left the levee district fee assessment of 2.313 mills at $77,901.
At the urging of Steve Bingham, the outside counsel for the airport, the commission voted to make the payment for 2018. Going forward, the commission would review the situation annually and make adjustments in the amount of the payment if circumstances changed.
Jesse Mason, a member of the commission, also wanted to be clear that the payment the commission was making didn't constitute a tax and that the commission was making the payment voluntarily. He also asked that a transmittal letter to the district with the payment make that clear as well.
The letter should reflect "that we're helping, and we're helping because we're nice," he said.
A member of the district commission, Larry Alman, didn't immediately respond to an email seeking comment.
Metro on 04/25/2018