Journal-Times (Grayson, KY)

October 2, 2013

Olive Hill Council once again settles on payroll tax

By Joe Lewis - Staff Writer
Journal-Times

OCT. 2, 2013 —

After two hours of deliberating various revenue options last Thursday night, the Olive Hill City Council eventually settled right back where it started – on an occupational payroll tax.

A special committee appointed by Mayor Kenny Fankell was on hand and offered various suggestions for raising money, many of which involved the sale of surplus property, such as the airport, to provide a one-time boost to the city’s coffers.

If we have assets that we can sell for market value, regardless of what special interest groups might want, including ones that I’m a part of, then we have to make tough decisions as a community and liquidate them if possible,” said Jonathan Lewis.

The consensus between the City Council, the committee and those in attendance was that a payroll tax is the most feasible solution raise city revenues over the long term.

According to committee estimates, a one-half percent occupational tax would bring in approximately $120,000 in additional yearly revenue – roughly double the current budget shortfall.

The occupational tax is the only tool that small governments have to raise revenues over the long term,” said Asst. Fire Chief Jeremy Rodgers.

One Olive Hill resident in particular communicated a strong sentiment shared by those in favor of the tax.

We need to be good citizens. I would be ashamed of myself to come make a living in a city that provides utilities and services and not be willing to give a tiny bit out of my check to help fund fire and police protection,” said Richard Short.

Selling the city-owned utilities was also discussed by the Council and those who attended the meeting. Such a move would carry some potential cost-savings, but would also come with drawbacks.

It may save the city money on having to upgrade equipment, but all that cost will just get passed on to the rate payers if AEP and American Water have to come in and put a lot of money into the system,” said Jerry Callihan.

Salaries for city employees that are paid out of utility revenues, such as the City Clerk and the Asst. City Clerk, would then become new general fund liabilities, which could actually add to the overall budget shortfall.

While the city has depended on grants in the past to help assist in the cost of undertaking major capital projects, some on the Council feel that such funding sources cannot be consistently relied upon in the current economic climate.

Everyone’s talking about grants, but you can’t depend on those. They are drying up all the time,” said Council Member Glenn Meade. “When you hear words like ‘sequestration’ it should clue you in that federal dollars just aren’t coming down the pipe anymore,” he added.

The committee also recommended re-examining the city’s health insurance plan for the 17 employees who still receive full family coverage.

So you’re saying we should punish the 17 people who still get family insurance so we can save a few dollars?” asked Callihan.

The committee clarified, however, that they weren’t suggesting terminating anyone’s health insurance benefits.

Citing the rising costs of private insurance and potential volatility in the market over the next several years, the committee only suggested that the city examine any potential savings that the recently enacted Affordable Care Act might offer.

Mayor Fankell was visibly emotional as the meeting drew to a close. Holding back tears, he offered a rare moment of personal reflection on the challenges he’s faced since being appointed to the position last January.

When I took this job, I asked the Council members to give me time to get the issues sorted out. It’s been a rough past six months, but I’ve done my very best,” he said.

Council met in special session Tuesday night to perform the first reading of a new payroll tax ordinance. The ordinance will have to pass a second reading and be published in the Journal-Times before it officially becomes law.

 

Joe Lewis can be reached at jlewis@journal-times.com or by telephone at 286-4201.