Increasing rent on city-owned cottages tabled until October: Is low rent a tax liability for employees?

An old topic, concerning how much rent employees should pay to live in the city owned cottages, has resurfaced. What started out as a way to provide low cost security for the former Alexander Human Development Center (HDC) property and give city employees a way to live in Alexander without a major cost to them, may take another hit on the perks side of the original agreement.

The plan was first adopted when former Mayor Paul Mitchell was in office. In 2022 the former HDC property was being vandalized after Pathfinders, Inc. moved to a new location outside Alexander. Pathfinders provided specialized services to those with physical and mental needs. The cottages were used to house the patients. They are located in the southeast corner of the property along Highway 111.

With no one on the property at night, vandalism began to become an expensive problem. Mitchell decided it would be beneficial to allow city employees, who live outside Alexander, to live in the cottages in exchange for providing both security and keeping the grass mowed. At the time, no city employees lived in Alexander.

Those living in the cottages generally worked for either the street or police departments. This arrangement provided the extra advantage of having city employees nearby in case of emergencies,

With the election of the new mayor, Crystal Herrmann, a change to the lease agreement was offered at the end of 2023. The amendment involved occupants paying the gas and electric bills and being charged $1.00 per year rent. The new Cottage User Agreement was adopted September 16, 2024.

The latest proposed change will increase the $1.00 annual fee to $100.00 per month. Herrmann says this proposal is made at the suggestion of state auditors after conducting the annual Arkansas Legislative Audit for 2023.

City Attorney Chris Madison is concerned that it may not be as easy as picking a dollar amount and raising the rent.

“My concern relates to whether this is taxable income,” Madison began. “So it costs me $500 a month to live in 1,000 square [feet] of a manufactured house, but if I'm an employee of the city, I can live in 1,000 square foot of cottage for $100 a month. That means I'm getting a $400 a month benefit.”

After pointing out to council members he considered this a problem the first time around he said, “So the key issue for me is to make sure that if there is a tax consequence for it, that it's recognized on the front end for a resident as well as on the city. If there's a way that we can minimize or eliminate or reduce the tax consequences, then cool, that's what we need to do.”

Herrmann said it’s been difficult to get an opinion at the state level. It seems all of the certified public accounts (CPA) are busy. The council decided to table the new agreement to give the mayor another month to find a CPA who can answer this question.

Other action items at the September 15 meeting

Saline County/Alexander Hazard Mitigation policies adopted

Council members approved the Hazard Mitigation Plan submitted by Saline County. The county-wide plan is a joint county/municipal plan required by the Federal Emergency Management Agency and covers a range of emergency preparedness. The plan covers items like providing safe-rooms in existing and new public buildings and having an emergency generator system for fire and police departments.

The plan was first adopted in October, 2017. Mayor Herrmann said it must be renewed every three years.

Alexander to sell lot

Mayor Crystal Herrmann reported to council members a property owner wants to purchase an adjacent lot owned by the city. The parcel sits in the center of three lots behind the Sharon Baptist Church of Alexander.

The lot is approximately 59-feet by 180-feet (0.24 GIS acre), a similar size and shape of the other two lots. While one of the end parcels abuts Vine Street, the remaining two parcels, including the city’s, are landlocked with no access to a street or alley.

Most of the parcel is located in Saline County with one corner in Pulaski County. According to Saline County records Alexander acquired the property May 20, 2002.

The property owner, who contacted the Mayor, is Tommy Madison. His property faces E. Third Street (Hwy. 111). The parcel owned by the city abuts his backyard. According to Saline County records the parcels on either side of the city lot are owned by Edna M. Dickerson.

Herrmann said she explained to Madison she would first need approval from the council. Then, the parcel would have to be advertised that it’s for sale. She also explained the steps needing to be followed.

“But, I will also have to go through getting this surveyed and then get market value, the appropriate value for property, before we could post it for sale,” Herrmann said.

Council members approved a motion giving Herrmann permission to have the parcel surveyed and appraised in preparation to be sold.

Department reports

City truck washed away

Mayor Herrmann reported one of the street department trucks was lost during the recent flood.

“In the flood, we've lost one of the street trucks,” Herrmann said. “It was swept into the flood waters. We have received the insurance check warrant of $20,000.”

Herrmann said she will be taking bids to replace the truck. She also plans on making an inventory of trucks including models and mileage.

Police concentrate on early morning speeders

Police Chief Timothy Preator provided council members with a brief report on “Calls for service” since the August council meeting. He also reported on attempts to slow down morning drivers when school busses are running.

“August numbers, we had 174 calls for service,” Preator began. “Forty-Eight of those were reportable.”

When it comes to morning speeders, when school busses are traveling through North Alexander, Preator said the worst areas are Second and Forth streets.

“I know I personally made over 80 traffic stops in a week,” he said. But, we're just on 4th street.”

“And I mean, like, literally, I stay on the side of the road” Preator explained. “I don't hide. My vehicle is sitting there. I stand on the side of the road with the right arm gun in my hand in the wide open and make traffic stops.”

“It's like nobody registers in their head that these kids are out here at these bus stops,” Preator said. “And I'll be damned if I wait until one of them gets ran over before we start making a change.”

Trek Tech comes to police work

It’s not a Universal Translator, but it’s close. Chief Preator demonstrated a new device that could put human translators out of business.

Preator said the device is being offered as part of an upgrade to the department’s body camera system. It will detect 56 different languages.

“This thing is legit,” Preator said. “I'm on a free trial right now to the end of November.”

Explaining how it works Preator said, “I can click this thing and tell it to translate to Spanish and I can start talking and it's going to say everything that I say, is going to put it in Spanish to the person I'm talking (to).”

It will then take the verbal response from the individual and translate it into English.

Preator said the cost for three years is $3,600.00 per year. He added it will be included in the 2026 budget.

9/11 Memorial, Activity report, Inspections and Water Outage

Fire Chief Ryan McCormick provided a quick run down of activities during the past month. Six Alexander firefighters attended a 9/11 conference.

McCormick said, “I was proud to be able to send six members to a conference locally that represents the 9/11 and what has occurred.”

According to McCormick the department has racked-up 340 hours of training. Also, the department was dispatched to 62 incidents in the past month.

In their spare time they’ve been inspecting businesses for safety violations.

“We're going to each individual business and we're just inspecting it versus showing, showcasing what's wrong with it,” McCormick said. “We find a violation, and then we give them another year to make (changes).”

In the future the first half of September, 2025, in South Alexander, may be referred to as the time without water. A crew laying optic cable for AT&T was constantly cutting the waterline, even though it had been located and marked. McCormick noted the outages could have been a disaster if there had been a fire.

“We have had many days and hours of no water in our city,” McCormick began. “Water for your homes, water for in the fire hydrant, all that kind of stuff.”

One day the crew managed to cause four breaks in four hours.

“We had one day where we were out,” McCormick said. “The construction companies, they (sic) did four different times within four hours, and we were out for most of the day. ... There was no water in the city. If we had a fire, we would have to be requesting additional tankers from outside our area and also additional resources.”

After calling everyone involved to a quick meeting the construction crew offered a solution they could have been using from the beginning.

“They had a better way of trying to locate some of the water lines that they were hitting as they were boring,” McCormick explained. “They weren't using it. So they started to use it, and I don't believe. We haven't had a water main break since.”

Junk yards, silt and a place for animals

Code Enforcement/Animal Control Officer Joshua Dodson reported, “We did 13 calls for animal problems this past month (and) four calls for code violation concerns.”

“And, I continue to hand out warnings for new violations, same things, just getting a place that is trash,” Dodson said. “There's a lot of houses and properties around here that have, that look like a car lot that has been ran (sic) since the 90s.”

Dodson said he is monitoring construction sites for having and maintaining silt fences.

“People not having their silt fences up on construction sites (causes) claying, construction debris coming into the streets, into the storm water drainage system,” Dodson said. “It's clogging the ditches, it's clogging the culverts.”

Dodson is still researching the costs and options to allow the city to operate its own animal shelter.

Dodson said he is looking into, “[S]helter pricing, what it would take to run our own, how much that would be, and there's a building we can use that we already have, how much a new building would be, and other options.”

Financial Report

Treasurer Jennifer Hill provided the monthly financial report. The report includes the end-of-month fund balances for August and the total amount collected for the three one-cent city sales and use tax.

“For August, your general fund had $1,855,525.52,” Hill began. “Your police fund has $83,729.07. Your fire is at $350,634.66. The park is at $257,701.01. Streets is at $310,897.62. Payroll is at $37,294.08. And your events (fund) is at $195.40.”

“The SUT, the sales and use tax this month, they were all the same,” Hill said. “They were $71,387.42 for a total of $214,162.27.”

Storm damaged roofs

Mayor Crystal Herrmann began her monthly report with results from insurance adjusters inspecting the damage to six roofs suffered earlier this year by storms. The roofs are on five of the cottages in the southeast corner of the former Alexander Human Development Center and Community Center Number-1.

“The adjusters came out and I guess because all of the storms and the storm season, it has taken them a very long time,” Herrmann said. “They finally got back with us and sent us a check for the roofs. Let's say we were talking six roofs, six roofs, they sent us $14,000. Which won't even touch a fraction of the roofs that we need to do repairs on.”

“Meanwhile, I am collecting multiple quotes which we would need anyways,” she continued. “Once I get all those gathered up, I am going to send that back over to the adjuster and see if they will revisit, uh, the amount of funds that they had sent us for the repairs.”

Herrmann said, “I think a couple of the cottages wouldn't even be considered because the age of the roof, the depreciation was so bad. ... I mean at some point they're not going to cover it. … But on the little community center I don't, I don't see that.”

Fall Fest October 4

Council Member Angela Griffin said she’s been talking to potential vendors for the Fall Fest. The annual Fall Fest is Saturday, October 4 at Alexander City Park (15665 Robert Evans Rd.) from Noon to 6:00 PM.

Next Meeting

The next meeting of the Alexander City Council is Monday, October 20, at 6:00 pm in the courtroom of the Alexander Municipal Complex (City Hall). Meetings are open to the public.

Alexander council continues discussing amendments to manufactured home ordinance

The Alexander City Council heard more details from City Attorney Chris Madison concerning what he says are needed changes to the ordinance that controls manufactured homes being placed within the City of Alexander. Commonly referred to as the Used Manufactured Home Ordinance, it actually covers both new and used manufactured homes.

The ordinance, adopted September 21, 2020, establishes standards concerning not only the placement of manufactured homes in general, but also the physical condition and age of a used manufactured home. It replaced a 2010 ordinance, that did not include the age requirement, in order to match the new zoning ordinance adopted in 2019.

The ordinance states prior to being moved into Alexander, or moved from one location in the city to another, the owner must apply for a permit. If not a new manufactured home it must be inspected for items such as loose or missing roof shingles and siding, broken windows, damaged flooring, windows, cabinets etc.. The ordinance also limits the age of a manufactured home to no more than 20-years in the year it is set-up. For example, this year, any used manufactured home set-up in Alexander can’t have been built before 2005.

The ordinance also establishes the end of using the term “Mobile Home.” When the Department of Housing and Urban Development established standards for factory-built housing in 1976 the term “Manufactured Home” was coined to differentiate between the old mobile homes, or trailers, and the new standards. And that’s where Madison began.

“The first thing we need to do is make sure our language is correct,” Madison said. “So mobile homes are a type of structure that was built prior to 1976. Following 1976, the term [is] manufactured housing. And that distinction is important because if a structure is built as a manufactured house, it meets Federal standards. And the cities are limited in what you can do related to rules by manufactured housing.”

Changing decades of using the term “Mobile Home” as a catch-all term for homes built in a factory was a tall order. Throughout the discussion during the September 15 council meeting, the mayor and council members were constantly correcting themselves when using the term mobile home instead of manufactured home.

Moving on to the age issue Madison said, “The biggest thing is related to the question of whether you can limit its age. ... I want to move a stick built house into the city. Does the rule limit me from bringing in a house that's 100 years old? The stick built. No, it doesn't. So you can't single out manufactured housing with that same kind of rule.”

Madison then went on to list regulations that can and should be established to control the placement of manufactured housing, both old and new. All of which are already included in Alexander’s 2019 zoning ordinance.

“Now, the other thing you have to do with manufactured housing is you are required to have a zoning district that allows manufactured housing,” Madison said. “So you have to have some zoning because that's how we control the structure and the structures in the city.”

Madison also listed, “(S)etbacks and sizing and those kind of like, it has to have [a] skirt, it has to be on [a] concrete pad, it has to be anchored down.”

“One of the things I noticed that I did not see in the ordinance, when I was looking at it, was we can require that any manufactured house that's moved into the city be moved by a licensed mover,” Madison noted. “I.E. someone who is permitted by the state to move manufactured houses.”

The requirement to use a licensed mover is not only lacking in the ordinance being discussed, but also does not appear in the 2019 zoning ordinance.

Madison continued, “Similarly, with the code enforcement and our rules, we can require that they apply for permits to move the manufactured house into the city to get a set-up [permit] so that we can do site inspection. Make sure it meets the setback requirements, make sure they put the skirting on it, make sure they have the concrete pad for it, all of these other requirements that we are capable of.”

Section-3 of the current ordinance states, “Inspection shall be made as required by each authority having jurisdiction during the placement of all Manufactured Homes to be located within the City of Alexander or within subdivisions regulated by the City. Following requirements do not apply to mobile home parks.”

At the time of its writing the term “(E)ach authority having jurisdiction” was intended to require the various utilities to handle the inspection of their own connections. While Alexander didn’t have an official building inspector at the time, inspection of how the manufactured home was set-up was expected to be done by someone from the city.

Section-6 of the Manufactured Home Ordinance does require applying for a permit prior to moving any manufactured home into the city. It also includes a fine if setting up a home without a permit.

Section-6 states, “A Set-up Permit must be applied for and issued prior to placement of a Manufactured Home on any site in the City of Alexander, Arkansas. Permit fees have been established by a separate ordinance. In the event a Manufactured Home is moved on site prior to the issuance of a permit, such fees are doubled.”

The same penalty for not having a permit is also stated in the ordinance that establishes permits for construction of residential and commercial buildings and manufactured homes.

The current zoning ordinance established the Mixed-Use Residential District (R-2.MU) to provide a mix of both site built and factory built homes. This zoning classification was established specifically to cover the mix of residential housing types found in the area known as South Alexander when the zoning ordinance was adopted in 2019. R-2.MU allows for Single-Family (site-built), Manufactured Homes, Modular Homes, and Prefabricated Homes.

Unlike other cities, Alexander dos not employ the use of an occupancy permit. That may change.

“And we need to look into our code enforcement rules that if a manufactured house is moved in, it does not comply with these [rules],” Madison said. “They didn't use a licensed mover, they don't have it set up right, they don't have the security [anchors] on it, they don't have the setbacks right, then you can actually issue a, you don't get your certificate of occupancy. Which means you can't live in the house until we've blessed it to do so.”

After Madison had set the stage for a discussion on what to do with the manufactured housing ordinance and the age requirement, Council Member Christopher Prowse broke the rhythm by asking how the change in names, from mobile home to manufactured home affects insurance.

“So, in regards to manufactured versus mobile homes, there's a separate insurance for manufactured house versus a mobile home,” Prowse said.

Trying to answer the question, Council Member Juanita Wilson said, “State Farm insures mine just like it would any house.”

“I work in insurance and we have separate policies for mobile homes [manufactured homes],” said Council Member Angela Griffin.

Mayor Crystal Herrmann stepped in to point out that unlike your typical manufactured home installation, using concrete blocks for support, Wilson’s manufactured home sits on a concrete slab and appears to be a typical house.

“Yes, she has a structurally sound foundation,” Herrmann said. “She can get a loan on her home. But if you don't do that, then you can't get a loan to, like, if you wanted to buy it.”

Herrmann also suggested it would be better for Alexander if going forward manufactured homes brought into the city were set down on concrete foundations.

“If it's not set up like Miss [Juanita] Wilson's, those people can't get loans,” Herrmann continued. ... “So if somebody wants to sell it, it's not going to become a burden in our neighborhood. It's going to be vulnerable.”

“So those are the things of like having the foundation and the blocks,” Madison said. “Those are rules that you can absolutely be [sic] in place.”

As for insurance Madison explained, “So the reason I use that term has nothing to do with insurance. (I)f it was built after 1976 from a company that builds these things, it's a manufacturing [sic] house.”

Madison also said requiring manufactured homes to be attached to a more traditional foundation will be a limiting factor on the age of the home being brought into Alexander.

“And then if you have it set up on blocks, really, if you wanted to move it, you put some axles under it, put some wheels on it, disconnect the water or sewer, electrical and tow it out,” he said. You can legitimately do that. Whereas if you go to the issue of discerning or the foundation portion of it, when it's there, it's there. So the requirement that it be permanently affixed, or on a solid foundation, or on a solid concrete pad, and those are all costs. Because what you're really trying to do is prevent the cheap 30-year-old manufacturing houses being brought in and being rented for $300.”

Mayor Herrmann relayed the story about a woman who didn’t bother to ask about permits before moving a manufactured home onto a lot.

“We even had a lady in the past couple of months,” Herrmann began. “Unfortunately, she bought a lot that didn't have an existing tap. She did not stop by city hall for a permit for us to be able to notify her that, that lot doesn't have [an] existing sewer tap.”

Herrmann said she didn’t come to city hall until after the home was moved onto the lot. The mayor doesn’t know when the manufactured home was moved in.

According to Madison the city can’t issue her a permit because the lot doesn’t have a sewer connection and one won’t be installed any time in the near future because of a moratorium on installing new sewer lines.

Herrmann said she has nothing against manufactured housing.

“I've had a manufactured home, I've lived in it, I've had a family that live in a manufactured home,” Herrmann began. “It's just our city is not very organized and uniformed in the way that it is laid out with some of the manufactured homes. And some of them are literally stacked on top of one another and we could be more uniformed going forward if we were to look at the zone map and clean it up a little bit. And then that could open certain properties in the traffic, the high traffic areas. If the mobile home comes off, then it can be, whatever’s there could be grandfathered in. But if that mobile home ever came off of there, then it could be utilized for commercial, or for duplexes, or stick built, or whatever.”

Herrmann asked about establishing a registration system for manufactured housing.

“Could we legally do a registration, a registered program for the, for mobile homes, manufactured homes in the city limits that do like a yearly registry?” Herrmann asked.

Madison replied, “I don't think you could do that.”

To clarify Prowse asked, “But just to be clear, this in no way will affect the current residents now, correct?”

“Correct,” Madison replied.

By the end of the discussion it was decided to schedule a workshop, which will provide council members more time to have a deeper discussion concerning any needed changes to the zoning ordinance, the land use map and other legal methods to guide future development in Alexander. It was noted since voting is not allowed at a workshop, that isn’t an issue creating an urgency to make a decision.

Three New Business items on Alexander September meeting agenda

The Alexander City Council has three items listed under New Business on their September agenda. They are:

1. Resolution for Saline County Hazard Mitigation,

2. Vine/Hwy 111 Property discussion,

3. Cottage User Agreement.

Also listed is a continuing discussion of the 2020 “Mobile Home Ordinance.”

The next meeting of the Alexander City Council is Monday, September 15 at 6:00 PM. The public is invited to attend.