Update: Highfill is suing in a bid stop XNA from leaving. Read the full story here.
To get a better sense of what its finances might look like after the Northwest Arkansas National Airport (XNA) detaches from the city of Highfill, city leaders looked to the recent past: the COVID-19 pandemic.
That time when few people were flying yielded fewer dollars from airport operations to the city — a preview of things to come once the airport de-annexes from Highfill, a rural community in Benton County.
A unanimous vote of the 14-member Airport Authority Board on Sept. 19 finalized the divorce between the airport and city. The airport’s decision to de-annex came after the General Assembly earlier this year approved Act 769. The law, sponsored by Sen. Jim Petty, R-Van Buren, and Rep. Mindy McAlindon, R-Centerton, gave airport leaders the ability to detach the airport from the city by a two-thirds vote of its members. But the airport must still satisfy an agreement to pay off about $7 million in outstanding water and sewer bonds that the city owes.
Annual bond payments have amounted to $600,000 to $700,000, and that’s the general amount of city sales tax revenue from airport operations that Highfill collects.
XNA officials declined to comment on the detachment process other than to say the land surveys had begun. They expect the detachment process to take several months.
Highfill Mayor Chris Holland, who opposed XNA’s decision to detach, said in September his city’s operations should not be adversely affected by the airport leaving the city. He said city officials’ review of budgets and operations from the pandemic provided a better sense of what to expect when it stops collecting city sales taxes on XNA’s operations.
The airport has been a boon to the city. Highfill’s population has grown from less than 600 to more than 3,000 since 2010, and six new residential subdivisions are planned or under construction.
In the past, XNA officials have said that detachment would be a net zero for Highfill because the loss of tax revenue would coincide with the elimination of the bond debt.
“The biggest question is, is this going to hurt Highfill?” Holland said in September. “The new bill says they have to pay our bonds off. We will just adjust our budget as we’ve got 15 years to adjust our budget and account for that.
“We don’t anticipate anyone’s water or sewer bills going up or any new taxes.”
The detachment has been a longtime goal of the airport, whose leaders point out that XNA was never supposed to be a part of any city. That changed when Highfill annexed much of the land destined for the airport before the airport’s 1998 opening.
The Airport Authority Board is made up of two members from each of the five main cities of northwest Arkansas — Fayetteville, Springdale, Rogers, Bentonville and Siloam Springs — as well as two members each from Benton and Washington counties. The airport tried to detach itself from the city two decades ago but legislative attempts failed.
After the governor signed the new law in April, airport officials said it would give them leverage to reach an interlocal agreement with Highfill. XNA leadership wants to use more of its revenue for on-site infrastructure improvements and renovations.
Holland said in September that the airport never intended to reach an agreement with the city. It planned to leave all along.
That appears to be a few months away.
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