MOUNT WASHINGTON ee" Three Mount Washington city councilmen have devised a proposal that could prevent the city’s water and sewer rates from increasing another 17.5 percent in 2010 ee" but it would require a 1 percent hike in the city’s occupational tax and reallocating additional funds from water and sewer tap-on fees.
Councilmen Dale Walter, Larry Porter and Dennis Griffin all agree there is an alternative way to fund construction of the city’s new $15 million sewage treatment plant other than raising rates again in 2010.
Rate payers already saw a 17.5 percent increase this summer that is helping fund the plant. That increase is also subsidizing increased Louisville water costs and needed sewer system repairs.
But the city is expected to need another 17.5 percent increase enacted by June 30, 2010 to help fund the project.
According to the plan, the council would approve the 17.5 percent increase but rate payers would receive a monthly credit on their bills. Walter said if the proposal were to be enacted, it would be as if customers experience no increase.
“The chances are real good that (customers) won’t see this increase,” Walter said.
According to the plan, raising the city’s occupational tax to 2 percent would allow half of that revenue to be allocated for the loan repayment. Walter estimated the 1 percent tax increase would equal $625,000 for the 2009-2010 fiscal year. The plan projects that $190,000 will be needed from tap-on fees yearly, equaling $815,000 annually to go toward the new treatment plant. If the treatment plant costs near projections, the city is estimated to have a yearly loan payment of $722,000.
Walter hoped an ordinance increasing the occupational tax 1 percent could be passed by October 1 of this year.
But Mayor Joetta Calhoun said she still has many questions about the idea and that the proposal could take away from other city sewer improvements. She said Friday that she had seen the proposal for the first time Thursday and had many unanswered questions.
“From yesterday to today I haven’t had time to truly get the input needed to let you know (my opinion). I need to talk to the billing clerk, computer programmer, supervisor of public works, city attorney, our auditor and city treasurer,” Calhoun said.
Although Calhoun wasn’t opposed to the plan, she said she hadn’t time to research its feasibility. She said taking money away from the city’s water and sewer tap-on revenues might put other major projects in jeopardy, like replacing miles of antiquated and leaky pipes.
“Just getting a new plant doesn’t mean all the other problems have gone away. I’m certainly not discounting (the proposal). Hopefully it is fiscally and legally possible. I believe I can speak for all the other council members when I say that. At this point I think it’s very premature,” Calhoun said.
City Attorney Norman Lemme was investigating the proposal Friday but declined to answer questions.
“If it’s legally feasible, I can’t answer that at this time. I have researched it, and until I give a formal answer to the council I would feel inappropriate giving a statement,” Lemme said.
Porter said the proposal was like an insurance policy for the city because if the occupational tax and tap-on fees didn’t come in as estimated, the credit would be removed from the monthly bill.
“I think this is good,” Porter said of the proposal. “It’s just so cut and dry, black and white.”
Walter admitted there weren’t answers to all the questions surrounding the plan but said it was a good beginning to helping relieve some of the citizen’s burden when funding the new treatment plant.
Walter, Porter and Griffin agreed the proposal would help Mount Washington’s lower and middle class families the most. Walter said although he didn’t want to raise taxes, he felt raising the occupational tax helped more evenly distribute the financial burden onto customers who might be more able to pay increased taxes and rates.
Calhoun said she was concerned that if revenue didn’t come in as the proposal planned customers would be confused when the bills increased. She added that it would also take a lot of manpower to calculate bills from month to month.
She said raising the occupational tax could discourage many businesses from locating the community.
“We have trouble getting businesses in here now,” she said.
But Walter disagreed with that point and said he expected growth residentially and commercially to grow in the coming years.
“I foresee a whole lot more businesses in here,” Walter said. “The economy is going to get better. There’s going to be more houses.”
There are also questions about if the proposal would affect the city’s current low-interest loan agreement with the Kentucky Infrastructure Authority. Calhoun said if the city lost that loan, customers could be looking at subsidizing a much higher-interest loan.
Walter said the proposal requires no changes be made to the KIA agreement.
Walter said he, Porter and Griffin planned to discuss the proposal at tonight’s city council meeting, 6:30 p.m. at the City Hall Annex on Branham Way. He said he hoped citizens and other council members would have ideas they could contribute to the proposal.