July 12, 2025, Joint City/HISID Workshop Recap

We had our second joint city council/HISID BOC workshop on Saturday July 12^th where we continued our discussions about transitioning the services currently provided by HISID to the city. As background for the discussion, an Exploratory White Paper on Long Range Planning for Holiday Island had been prepared and emailed to the HISID Board and City Council Members prior to the meeting. This document can be found on the City Website on the "Links" page, Topic "Planning for Our City's Future (or click here.) There was general support for us to move in that direction even though we all know that it will likely be a complicated legal process, that new sources of funding will have to be identified and put in place, and that in the final analysis, any plan put forward to transition any or all functions may not be supported by the voters and property owners. Even given the complexity of the process, there was general support for the idea that one governing body is better than two and a 2035 target completion date was a good target. Some highlights and takeaways are as follows.

Revenue Sources:

Wes Stille presented a summary of the current city and HISID revenue excluding assessment revenue since that would not be available to the city. His analysis showed that even when including known opportunities for new revenue like property tax, sales tax and franchise fees, the city would still be about $1.3 million short in the revenue needed to take over all the HISID functions. So, either more sources of funding must be identified, or some functions would remain with HISID.

Roads

In the lead up to incorporating Holiday Island as a city, one of the goals that was clearly and repeatedly conveyed to the public in numerous public forums and mailings was that the city would take over repaving or resurfacing the roads. And that HISID would continue to do road maintenance and snow removal. Given that the city started out on day one with zero funds, it obviously took a couple years to start the paving program. However, I believe that the following will show promises made and promises kept. By the end of this year, the city will have provided $600,000 in road funding without raising Holiday Island property owner’s or resident’s taxes. And the 2026 budget will include $465,000 in road resurfacing and $76,000 in road maintenance payments to HISID.

The city and HISID have been working on a plan to transition roads to the city as the city repaves or resurfaces those roads. Most of Stateline Drive, Hawk Drive, and Hawk Lane have already been transitioned. Also, the roads (streets) south of Highway 23, basically the Park and the Bluffs, are now city roads. The city is also soliciting bids to resurface about 7 miles of roads in 2026. Once all these roads are transitioned to the city, the city will be responsible for approximately 20% of Holiday Island roads.

There is a taskforce working on the long-range plan for roads and although there are some significant issues to research and resolve, the goal would be for the city to take all the roads by 2027.

Fire Department

Cities of the 2^nd class are not required to have a fire department which is why the city has an interlocal agreement with HISID. However, if our population increases to 2500 in the 2030 census, we would become a city of the 1^st class and would have to have a fire department. Our population is currently 2399. Only 101 people away from that trigger point. Consequently, there was interest in and support for the city taking over the fire department at some point. It was decided that Randy Rahlf and I should appoint a smaller taskforce (similar to the roads taskforce) to explore the possibilities. Some specific points of interest or concern were:

·         How does the cost of operating our fire department compare to other cities of similar size?

·         Do we have enough equipment? Too much equipment? Enough stations? Too many stations?

·         What is our relationship with the Holiday Island Rural Fire District which is NOT the same as the Holiday Island Fire Department and covers a huge rural area? The HIFD provides 100% of the fire fighting and emergency response for the HIRFD. What revenue do we get from providing that rural area with fire protection and EMT services?

·         Should the County be collecting the HIRFD fees on the tax bill and provide that money to the HIFD?

·         How ISO ratings affect property insurance costs.

·         Condition of the fire hydrants.

·         And of course, as with the roads, what are the legal issues.

Sewer and Water

Transitioning sewer and water to the city should be revenue neutral in that by law the water & sewer charges must cover the cost plus 10% for a reserve for major repairs and upgrades. However, the legal issues with the transition may be just as complex as with other transitions. The transition would likely be timed with HISID retiring the sewer bond. Again, the decision was made to set up a task force. The main points of interest or concern were:

·         Water leaks and water loss. David Rochefort updated everyone on a study HISID hopes to do yet this year.

·         Could the sewer and water system be sold to a private company or converted into a water district?

·         Do we know what the future needs are $$?

·         Billing sewer/water/trash together like other cities.

·         Fire hydrant management.

·         And of course, as with the roads, what are the legal issues.

General topics

There was a general concern both within the panel and the public in attendance that there needs to be involvement by the respective attorneys and the Municipal League. Some felt we may not be seeking legal advice early enough. Both the city and HISID have been including our respective attorneys and will be engaging legal counsel regularly as we move forward.

There was discussion that we cannot overlook the administrative costs that are not booked directly to the departments. And how does the city transition employees? Those are good points and probably worthy of another taskforce at some point.

There was discussion about the need to find out what the public thinks or wants. This will likely be a topic for the next workshop.

Note: At this workshop the focus was on essential services. We will likely start to address the recreational amenities at the next workshop.