Council takes first step to set budget, raise occupational tax, utility rates
By JIM BROOKS
Nelson County Gazette
Wednesday, June 15, 2011, 1 a.m. – The Bardstown City Council approved first reading on utility increases, changes to the city occupational tax and its 2011-12 budget in a contentious meeting Tuesday night that saw tempers flare.
Councilman Tommy Reed listens during the discussion about his proposal for a sunset clause provision in the revised occupational tax ordinance (click photo to enlarge).
OCCUPATIONAL TAX. Bardstown’s current occupational tax is paid by those who work inside the corporate city limits; the tax is applied to earned income between $15,000 and $75,000. The changes that saw first approval Tuesday night will eliminate the exemption for income under $15,000, and remove the $75,000 cap.
The changes weren’t without considerable debate by the members of the council.
Councilman Tommy Reed asked the council to consider a “sunset clause” for the occupational tax. Under such a provision, the tax would expire by a given date. A sunset clause would force a future council to review the occupational tax and renew it, amend it, or let it expire.
The changes to the occupational tax will generate nearly $1 million dollars in new revenue, Reed said, and that’s nearly four times the amount needed to balance the 2011-12 budget. If not renewed, the entire occupational tax would go away – a notion that prompted disagreement from Mayor Bill Sheckles and several members of the council.
Councilman Francis Lydian discusses the proposed "sunset clause" for the occupational tax ordinance (click photo to enlarge).
A council can revisit the occupational tax at any time of their choosing without a sunset clause, Sheckles told Reed. “There’s nothing that says you can’t look at it again in two years,” he said.
“I think it [the sunset clause] shows we’re good stewards,” Reed said, pointing out that the occupational tax brings in about $800,000 now, and the requested changes take another $800,000 out of the pockets of those who work in the city limits. “You have to remember we’re in a recession, and you’re going to double [the tax revenue]?”
“I’m hoping it will bring in more than anticipated,” Sheckles said. Having some extra income will give the city “a chance to make some aggressive moves when the opportunity comes along.”
Councilman Francis Lydian told Reed that it wasn’t necessary to force a future council to review the occupational tax because they can do so at any time.
“You’re right,” Reed said, “And you can – but you won’t.” He said he wanted to be certain a future council reviewed the occupational tax. “It will never come otherwise, that maybe we don’t need this much money, or maybe we do need to put this money back in the hands of the taxpayers.”
Mayor Bill Sheckles reviews a draft ordinance during the June 14, 2001, city council meeting (click photo to enlarge).
During the discussion about the sunset clause, Lydian told Reed several times that he felt Reed had a problem with taking the cap off the occupational tax, prompting Reed to finally respond, “Francis – read my lips: SUNSET CLAUSE, that’s all I’ve said the whole time.”
In an attempt at a compromise, Sheckles passed out a copy of draft resolution that would ask a future council to review the occupational tax, but the resolution didn’t meet with Reed’s approval.
Sheckles said he couldn’t support a provision that would allow the occupational tax to expire. “That’s a decision for a future council,” he told Reed.
Councilman Fred Hagan voiced his disagreement with the sunset clause concept. “I think it’s arrogant of us to think that we have to ride herd on a future council,” Hagan said. “It’s arrogant of us to think we know better, or that we need to make sure [a future council] does its job.”
When Reed was asked if he would support the occupational tax ordinance without the sunset clause provision, he said he would not. Councilman Bobby Simpson said he was “against the ordinance – period.”
Raising revenue via the occupational tax is easiest way to fund the general fund without requiring the transfer of utility revenue, Sheckles explained. The general fund pays for police and fire protection, street repairs and other services, he said.
Councilman Fred Hagan (click photo to enlarge).
Reed continued to push for adding a sunset provision to the occupational tax ordinance. When asked for his opinion, Mike Abell, city chief financial officer, paused before saying that in his opinion a sunset clause was bad policy. If the city had excess funds from the occupational tax he would suggest putting the funds toward improving police and fire protection.
Reed’s subsequent motion that the council accept for first reading a new occupational tax ordinance that included a sunset clause died for lack of a second.
Councilman Fred Hagan made a motion for the proposed occupational tax ordinance without a sunset clause. The motion passed 3-2 with Joe Buckman, Hagan and Lydian voting for the measure and Reed and Simpson voting against it.
CITY SERVICE RATE HIKES. As part of the new 2011-12 budget that will go into effect July 1, the council approved rate hikes on the city water, sewer, garbage and cable television.
Councilman Bobby Simpson gestures while making a point during discussion of the proposed cable TV rate increase (click photo to enlarge).
CABLE TV. Basic cable TV subscribers who live in the county will see a $2 increase in their bill ($17.20 to $19.20). The basic cable rate for city residents will remain at $14.45.
The cost of expanded basic cable TV (channels 23-74 on the city cable system) will increase $3 per month for all subscribers regardless of location. The cost to reconnect service after a disconnection for nonpayment will increase from $20 to $25 for city residents, and from $28 to $40 for county residents.
Councilman Bobby Simpson asked if the rate hikes were partly due to the expansion of city cable into the Chaplin area.
City engineer Jeff Mills explained that expanding to Chaplin was a good move due the concentration of customers. The rate hikes are due in part to increase expenses for operating the cable system and to programming costs.
Simpson said he had been getting feedback from constituents questioning how cost-effective the Chaplin expansion was despite the potential revenue it will eventually generate. “It’s a good deal, but can you afford it?”
Simpson argued that the cable rate hikes may be a burden to some people. Cable TV isn’t a necessity, and even with the rate hike, the city’s cable TV is still a better deal than the competition, Sheckles said.
The cable TV rate hike was approved 4-1, with Simpson voting against it.
Councilmen Bobby Simpson, left, and Tommy Reed look over data displayed on Reed's laptop during the city council meeting Tuesday night (click to enlarge).
GARBAGE. The city council approved 5-0 first reading of an ordinance to raise the monthly household garbage fee by 80 cents, going from $13.25 to $14.05. Rates for commercial customers increased by the six percent.
WATER. The council voted 5-0 to raise the rates for city water after a discussion of the impact that a current rate study may have on the final rates for water and sewer.
The minimum monthly bill for the first 2,000 gallons of water will increase $1, from $9.49 to $10.49 for city customers. County water customers will see their minimum water bill increase from $13.75 to $15.37.
SEWER. The council voted 5-0 to raise sewer rates, noting however that these rates may need to be amended after a utility rate study is complete in August.
Sewer customers in the city limits will see their minimum monthly bill increase $2.25, from $15 to $17.25. Customers outside the city limits will see their minimum monthly bill increase $3.34, from $15.60 to $18.94.
2011-12 CITY BUDGET. Without a great deal of discussion, Sheckles asked for a motion to approve the 2011-12 budget. The vote to approve the budget mirrored the 3-2 occupational tax vote, with Reed and Simpson voting against the budget, and Buckman, Hagan and Lydian voting for it.
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