Prairie Grove Sets Records

TAX REVENUE, HOUSING, WATER CUSTOMERS ALL UP

PRAIRIE GROVE — The city of Prairie Grove set records on all fronts in 2017.

Sales tax collections are at all-time high.

The city set a record for number of dwelling units in a year. For the second consecutive year, the city broke its record for the number of new single-family houses and the city set a new record for multi— family units in a year.

The city has 250 new water customers, the most new customers in one year. This accounts for a 10-percent growth in water customers, compared to 2016.

Tax Revenue Continues To Climb

For 2017, the city collected $495,737 from its 1 percent sales tax, compared to $448,406 in 2016 and $457,712 in 2015.

Sales tax revenues are up by about about 11 percent compared to 2016, and 8 percent compared to 2015.

Prairie Grove in all collects a 2.25 percent local tax, with 1 percent going to bonds for the sewer plant, .75 percent for capital improvement funds, .25 percent for library and park operations and another .25 percent dedicated to capital improvements and expenditures.

Looking at the total taxes collected, Prairie Grove has taken in $1.1 million in 2017.

Larry Oelrich, director of administrative services and public works, said the city, in the past, has rarely brought in more than $40,000 per month from the 1 percent tax. Prior to 2017, revenue from the city’s 1 percent tax had exceeded $40,000 in a month only five times.

For 2017, the city has exceeded $40,000 for six consecutive months, from July to December. The city received $45,664 from the 1 percent sales tax in November, a new monthly high.

Collections are based on sales made two months earlier. For example, sales taxes collected by businesses in September were distributed to cities and counties in November.

The lowest month for sales tax revenues in 2017 was April. The city received $34,755 from the 1 percent sales tax that month.

Oelrich said he has to believe sales tax collections are up because Amazon began collecting state and local sales taxes on purchases made online in March. City officials began to see sales tax revenues climb in May. The May revenues were based on sales made in March.

He said Prairie Grove officials hope the state Legislature will make it a requirement for sales taxes to be collected on all purchases made online.

Housing Starts

The city broke its record for single-family homes in 2016 with 148 new houses. Then in 2017, the city set a new record. City Hall issued 185 permits for new single-family houses, with construction going on in almost every subdivision in the city.

In 2016, the city did not issue any permits for duplexes or other multi-family units. For 2017, the city set a record with a total of 52 multi-family units: 30 units in duplexes and 22 units in tri-plexes or four-plexes. The last record was set in 2002, 38 multi-family units.

The total for all dwelling units in 2017 was 237, a new high.

Oelrich said he believes housing starts will begin to slow down because the city is running out of available lots.

“I think we’ll be out of lots by the end of the year,” Oelrich added.

Two new, small subdivisions are under construction. Oelrich said the city has land available that is close to utilities that could be developed in the future.

Looking at single-family and multi-family housing, city officials estimate Prairie Grove’s population has grown from 4,380 in the 2010 census, to 6,000 in 2017. To determine estimated population, the Census Bureau figures that each dwelling unit is equivalent to 2.4 people.

Water Customers Increase

More houses and more multi-family facilities lead to more water customers.

In December 2016, the city had 2,304 water customers. This increased to 2,529 water customers in December 2017.

The city sold about 116 million gallons of water in 2016 and will sell more than 122 million gallons of water in 2017.

Oelrich said the city set a record for water usage during construction of the Prairie Grove bypass.

“It will take years before we break that record,” he said.

But still revenue is up this year, not only because of the additional water customers, but because the city is treating raw sewage from the Valley View area. Washington County Property Owners Improvement District #5 is hauling sewage to Prairie Grove’s sewer plant and paying the city to treat the sewage.