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Posted: Wednesday, 22 May 2013 12:58PM

City Looks to Increase Revenue through Garbage, Insurance Premium Tax Rates



(Leitchfield, KY) – As the City of Leitchfield faces a possible $1.6 million deficient next year, according to Mayor William Thomason, the first reading of two ordnances were read that would generate almost $900,000 next year in revenue.
 
The first ordinance that would generate more income was the ordinance dealing with the regulation of solid waste disposal.
 
The city has not faced rate increases since 2003.
 
The proposed rate increase will be a 10% increase for the next four years and then every year the increase will match the increase passed along to the city by the Ohio County Bale Field, which on average has been 3% each year.   
 
City Treasurer Erin Embry presented numbers to the council Monday about the consumption of the city’s budget by the solid waste department. 
 
30% of Health Insurance
30% Total Workers Comp Insurance
30% of Property & General Liability Insurance
50% of PW General & Administration
25% of Streets
100% of Solid Waste
100% of Transfer Station
100% of Recycling
100% of Landfill
75% of Shop
 
Her projections of how the department has and will operate on a loss were broken down by the following:
 
2011 Actual Loss: $273,281.00
2012 Actual Loss: $342,569.40
2013 Proposed Loss: $411,615.00
2014 Proposed Loss: $551,625.00
 
With the proposed garbage rate increase, the proposed revenue generated will be:
 
Year 1: $ 86,800
Year 2: $182,280
Year 3: $287,308
Year 4: $402,839
 
Embry said, “We would still be operating on a loss after four years but it would be a step in the right direction.”
 
For non-commercial users, the rate for solid waste pickup would increase from $17/month to $18.70/month for city residents and from $21/month to $23.10/month for non-city residents.  For customers who meet special criteria the rate would increase from $12.50/month to $13.75/month.
 
As the seriousness of how ugly the city’s budget looked for the next fiscal year unfolded, citizens in the audience were appalled with the council for not raising the garbage rates before now, and raised questions as to why they had not taken care of the problem before now.
 
Councilman Steven Elder said, “Because we’re all politicians.”  He went on to talk about not having enough votes to pass a rate increase in the past. 
 
His comments were backed by Councilman Billy Dallas repeating the same idea that in the past they didn’t have four votes to pass a rate increase.
 
Elder talked about the ads that Councilman Jerry Schlosser ran during campaigns that promised to not raise garbage rates, and said, “How do you think that made the rest of us feel if we need to raise garbage rates?” 
 
Councilman Miller said, “All of my life I’ve sat on the other side of this table and criticized what the council did, so now I’m on this side and I accept the criticism from the public, but when you’re on this side you tend to look at things differently and you look for things, and I wanted to share a story from Smyrna, TN, I found on the internet.  The town council has approved the first reading of a 46.1% property tax increase.  They were kind of in the situation we are now, they put-off and put-off and put-off seeing to the things that needed seeing to.  Nobody wants to raise taxes, nobody wants to raise garbage rates, but sometimes you have to.   And the cause of this is they used all their reserves and cut 34 jobs this year, and they are hoping to use this money to balance the budget and build up their reserves.  We’ve got reserves but we’ve used a good part of them, as Steven said it’s nothing pleasant for any of us to look at.  If you do a little at a time, it seems to go down a little bit easier.”
 
Click here to read the article Miller was referring to.
 
Mayor Thomason said he met with the Budget Committee, which is Billy Dallas, Jerry Schlosser, and Tooty Cottrell, who decided on the rates to charge.
 
Dallas said, “We’re getting ready to make a choice nobody’s going to like.  I’m not going to play politics any longer.” 
 
Mayor Thomason said, “It’s all of our faults, we’ve laid back and not done it.”
 
The council also decided to hear the first reading of an ordinance that would increase the Insurance Premium Tax Rates from 4% to 8%, beginning July 1, 2014.
 
The IPTR generates $400,000 annually for the city, and was added in 1985 as a way to pay for the city’s fire and police departments.  The 8% rate would generate $800,000 yearly.
 
The Leitchfield Fire Department works on a $500,000 yearly budget and the police department operates on a $1 million budget.  But that number is going to have to increase to $1.3 million annually for the police department if the city fulfills the new police chief’s requests.
 
Chief Kevin Henderson said he is only asking for what is needed, not what he really wants, laughing as he cited a helicopter would be nice.  As the council erupted in laughter, he said in all seriousness, the department needs to add more manpower to be able to properly police the needs of the city.  He said police work has changed over the years and the crime rate is on the rise.  He told a story of four officers taking down one man hyped-up on meth at Centre Court gas station in Leitchfield over the weekend.  He said it takes more officers to handle these kinds of situations, which he said are happening more often.
 
Henderson also requested new vehicles be automatically added into the yearly budget so the department did not get back into its current situation of not having an adequate fleet.  He said he was driving his personal truck since one police vehicle was inoperable as of that morning, causing a shift in vehicles for officers.  He said he and Erin Embry worked out the numbers that showed the city could keep a vehicle for about eight years.
 
He also asked that the council go ahead and purchase two Dodge Charges that can be picked up immediately, since the city is still waiting on two vehicles purchased months ago from Dan Powers.  The two Chevrolets are being made in Australia and it has caused a lag in a delivery date.  Elder made the motion and Margaret Fey seconded the motion to buy the Dodge Charges. 
 
After much discussion about increasing the IPTR, the council decided to hear the first reading, which does not make the ordinance law.  The council will hear the second readings of both ordinances at their next meeting.

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