January 16, 2026, State of the City - Planning for Holiday Island’s Future

Letter to Residents of Holiday Island

Dear Residents and Property Owners of Holiday Island,

2025 was a year focused primarily on developing a long-range plan for Holiday Island. Working closely with our partner, the Holiday Island Suburban Improvement District (HISID), after having two productive work sessions attended by the City Council and the District Board of Commissioners, the groundwork was laid to start the transition of services currently provided by the District over to the city.

During the year, the city provided approximately $50,000 to (HISID) to maintain roads that have already been transitioned to the city. That amount will increase to $95,000 in 2026 since the city will have responsibility for over 20% of Holiday Island’s roads.

In November, the city signed a contract to resurface approximately seven miles of roads primarily around Lower Table Rock Drive and Danube. Also in December, the city was approved for a $400,000 grant to go towards repaving Woodsdale Drive and Stateline Drive from the 4 way stop to Woodsdale Drive. This brings the total grant money the city has received since 2022 to $700,000 and by the end of next year, the city will have done approximately $1.5 million worth of resurfacing Holiday Island roads.

The city in 2025 also contributed over $100,000 towards the operation of the fire department and over $100,000 in deputy services from the Carroll County Sheriff Department.

The above investments in our community have been made without the benefit of any city property or sales tax. So, although the city operates on a very limited budget, I can truly say that the state of the City of Holiday Island is strong.

Looking Ahead

Over the next few years, Holiday Island will undergo one of the most important transitions in our community’s history. The services that have long been provided by the Holiday Island Suburban Improvement District (HISID) including road maintenance, fire protection, water and sewer utilities, and recreation facilities, will gradually be transferred to the City’s responsibility.

This transition is necessary to align Holiday Island with the way most cities operate in Arkansas where the city government, not a separate improvement district, provides essential public services. This change will ensure local accountability and better access to state and federal funding.

Why a Property Tax is Needed Now

To begin this process responsibly, the City will levy its first-ever city property tax of 4 mills effective for collection in 2026. This revenue will help fund Phase One of the transition — taking over maintenance of our 71 miles of roads.

At present, the City receives about $300,000 a year in county and state turnback funds. That amount is not enough to maintain our extensive infrastructure or provide other vital city services. The new 4-mill levy will provide additional revenue needed to begin managing and maintaining all our roads — the backbone of every city.

Importantly, long term, this new tax will have minimal impact on your total cost for local services. The Holiday Island Suburban Improvement District’s annual assessment will be reduced in 2027 when the City assumes full funding responsibility for roads.

In short: as the City takes on new duties, the District will step back — and your annual assessment will be reduced accordingly.

Next Steps  

Following the roads transition, the City plans to take responsibility for:

• Fire Protection Services

• Water and Sewer Operations

• Recreation Facilities and Parks

Each phase will be planned carefully to ensure a smooth handoff from HISID to the City. And each phase will require a source of funding. In 2024, HISID received about $2.5 million in assessment revenue. Virtually all cities generate their revenue from property tax, sales tax, and franchise fees. We estimate that these sources of revenue will generate approximately $1.0 million or 40% of the lost assessment revenue for Holiday Island.

Consequently, we are determining other sources of revenue with the help of the Municipal League, our attorneys, other cities, and of course public input as we continue having our City Council/HISID task force public meetings.

Phase II, transitioning the fire department, should quickly follow the roads transition. To support these future services, the City will ask voters in the November 2026 general election to consider a modest local sales tax, that will be effective in 2027. Since a sales tax requires voter approval, and since sales tax measures can only be considered for balloting every two years during a general election, we feel we cannot wait until after 2028 to continue the transition process.

Why This Matters

Holiday Island is a beautiful, unique community — built across the ridges and valleys of the Ozarks. But our challenging topography and limited commercial base means we must plan carefully to fund essential services. This step is not about growing government; it’s about preserving our roads, protecting property values, and maintaining the high quality of life that drew all of us here.

We Need Your Support

We understand that new taxes are never popular. But in this case, the City’s property tax and proposed sales tax are key components to securing our future and ensuring that Holiday Island remains a safe, well-maintained, and financially stable community.

Your City Council and staff are committed to transparency and accountability throughout this process. We encourage you to reach out with any questions, attend upcoming public meetings, and stay informed as we move through this important transition together.

Thank you for your continued commitment to making Holiday Island a great place to live, work, and visit.

Sincerely,

Dan Kees

Mayor, City of Holiday Island