SHEPHERDSVILLE - It came down to a tie and mayor Scott Ellis knew what he had to do.
To fulfill the obligations promised to creditors and to meet budget expectations, Ellis voted in favor of a 4 percent tax increase on real property owners in Shepherdsville.
On a $100,000 home, the increase from 14.3 cents per $100 of assessed property to 15 cents will result in an increase of $7 to $150 a year.
In making his tie-breaking vote, Ellis said there was really no choice.
He said spending cuts have been made since he took office in January and part of those cuts have included a decrease in the number of police officers on the force.
Ellis said it would be very difficult to cut any further in either the police or fire departments. While people may be unhappy, they would be even more unhappy if response times for emergency services increased.
“It’s a difficult decision,” admitted Ellis. “But I know the city made agreements with the bank and I signed those agreements.”
Part of the pain can be attributed to the city’s constant practice of lowering tax rates and not taking the 4 percent allowed.
The 15-cent rate is the same charged in 2000 but it much lower than the 22 cents charged in 1981.
Councilmembers Don Cundiff, Alan Wetzel and Bernard Brown voted in favor of the increase, while Larry Hatfield, Garland Miller and Faith Portman voted against.
Prior to the vote, there was much discussion from both the council and members of the audience.
Portman wanted the council to delay any action. She said a businessman called asking to see if they could get a number of business owners together to lend the city the money that would be generated.
Hatfield said he also got a call asking for a delay. The businessman was concerned about the affects on the larger companies and on how it could hurt in recruiting others.
Miller, who was attending just his second meeting as a member of the council, said he could agree to delay the vote. He was concerned that the council recently increased sewer bills by 66 percent and there are people who are suffering through tough times.
But Brown questioned what happens if the business consortium can’t generate the $400,000, which is the estimated amount the city would generate with the tax hike.
Wetzel felt it would take too long for everything to happen when the tax bills should be ready to be sent out in couple of weeks.
But Cundiff said he was upset that the city had a plan for a financial recovery and now some want to back down.
After listening to the advice of finance expert Marty Brown, Cundiff said the council agreed to the bond issue and the revenue needed to make the annual payments. Now, he said people are backing away from that pledge.
Wetzel added that even with the increase, the tax rate would be lower than it was 30 years ago.
City attorney Joseph Wantland said that the officials did make commitments. He said the council agreed that the sheriff would collect the taxes and they would raise the occupational tax to 1.5 percent. They also agreed that they would take the 4 percent allowed by law on the property taxes.
“We did make that commitment,” said Wantland. “If we don’t take this tax rate, then what tax rate?”
Bonnie Enlow, who recently moved out of the city and resigned from the council, encouraged the council to take the tax increase.
“You do need to pass this today,” said Enlow. “We made a promise.”
She said no one wanted to increase taxes but the city can’t continue to lose services. Many people who attended Monday’s council meeting agreed to the higher rates if it meant retaining fire and police services.
Instead of worrying about re-election, Enlow said they must make the right decision for the city’s future.
Daryl Lee, who is the city’s representative on the planning commission, said growth is aided by lower tax rates. He said many don’t understand why the city hasn’t annexed vacant property, especially where the new $7 million sewer line was installed.
He encouraged the officials to listen to the business leaders. However, the bottom line is looking to the future.
“We’ve got to have some type of vision,” said Lee.
Jim Enlow, a former fire chief and police chief for Shepherdsville, said the tax increase is not too much to ask.
But Glenn Fleming said the taxpayers don’t want any increase. He said those in favor at the last meeting had some connection to the government.
Portman agreed that most people are against any tax increase, especially after the increased sewer bills.
But Tom Rosselli said the city officials gave their word to creditors and they should keep it.
“Let’s bite the bullet,” said Rosselli.
The retired Kentucky State Trooper remembers the days of having one officer on duty per shift in Shepherdsville. Going back to those days is not something the city can afford.
George Miller said the city increased sewer rates at least 66 percent just 10 weeks ago. The city also increased the occupational tax on July 1.
If the public could see some actual cuts, they might be able to better accept the tax increase, said Miller.
He felt the city must look at other options to provide fire service. The city will spend $1.4 million on the fire department and Miller said there must be some discussion on other possibilities. However, that is a taboo subject, said Miller.
Also, he said without the fire department, the city wouldn’t need the large government center, which is costing $500,000 a year for maintenance and utilities.
“It needs to be up there on the table,” Miller said of all the options.
Steve Larimore asked if the city could meet its budget if the business community provided the $400,000 and no tax increase was approved.
Hatfield said he didn’t know.
With that, Larimore called the council financially irresponsible for the past eight months.
“You guys have failed to make decisions to come up with a plan,” said Larimore.
He appreciated the comments by Cundiff on the council’s failure to back up its prior commitments.
Without making the tough decisions, Larimore said the city council would be still having these discussions for years to come.
Tax bills will be delivered in early October to property owners. A 2 percent discount will be allowed if paid by Nov. 1, 2011.