Council holds hearings on water, sewer, tax hikes

By MIKE WILLIAMS

The Patriot

Pulaski Town Council held public hearings Tuesday night on proposed water and sewer rate increases, and a possible 3-cent increase in the real property tax rate.

While few citizens voiced opinions on the proposed increases, their comments prompted a wide-ranging discussion among the mayor and councilmembers on a whole host of issues facing the town – everything from sulfates to economic development.

A 4 percent across-the-board increase in both water and sewer rates is being proposed. Town Manager Shawn Utt explained that, if approved, the increase in water rates would mean the average customer would see their water bill increase by just under a dollar per month.  On the sewer side, the average customer would see about a $1.10 per month hike.

Both the water and sewer funds are enterprise funds and are supposed to be self-sustaining.

However, earlier financial and utility rate studies by Davenport and Co. found that the town’s water and sewer funds were not on solid ground, with little or no reserve in case of emergency.

Davenport advised then the town conduct a five-year program of raising water and sewer rates by 4 percent annually to make the two funds self-sustaining, and to create at least a 90-day reserve fund in case of a costly emergency.

The proposed increases are part of that program.

Mayor Nick Glenn commented during discussion on the proposed rate increases that, considering the town’s aging water and sewer lines, “We’ve got problems waiting to blow up in our faces.” He said the increases would allow the town to build a reserve to begin making necessary repairs.

While the sewer and water rates appeared to be headed for approval as early as next Tuesday’s council meeting, the same can’t be said of the proposed 3-cent increase in the real property tax rate.

Currently, Pulaski’s rate is 34 cents on every $100 of assessed value.  A 3-cent increase would take the rate to 37 cents.

Utt said a 3-cent increase would mean the average homeowner in Pulaski – with a home valued at $106,000 – would see about a $32 increase in their taxes annually.  A homeowner living in a home valued at $200,000 would see an increase of about $60.

Utt said he is proposing the tax increase to provide money for the town to start addressing a long list of capital improvement needs – needs that in past years have gotten little of no attention.

Several on council spoke on the proposed increase.

Councilman Jamie Radcliffe noted the losses the town has sustained in the closings of Jefferson Mills, Xaloy, Pizza Hut and Rite Aid. He then turned his attention on the town government’s spending, saying the “holes must be plugged,” in the town’s spending and things “tightened up” before citizens should be asked to pay more through a tax hike.

Vice Mayor Greg East agreed, saying too often the town focuses on tax increases more than on “what is going out.” And, he wondered, if the tax increases aren’t actually stifling the town’s growth.

Councilman Joseph Goodman noted he could possibly stomach an increase that goes only to capital improvement needs.  “If we can’t find cuts, we’re going to have to do something to invest back into the community,” he said.

East then steered discussion in the direction of possibly holding off on a tax increase, considering the county’s real estate reassessment is coming up in a couple years and that will affect the town’s tax rate. “It might be a bit premature,” he said.

Goodman suggested council consider possibly tapping the town’s reserves to cover the most pressing capital needs, rather than passing a tax increase. He noted citizens have seen tax increases of one form or another almost annually the past several years.

Utt said the town’s reserve fund, at the end of 2016, stood at some $1.7 million, or “19 percent-ish.”

He urged council, however, that if reserves are used they be used only on one-time purchases and not on-going expenses.

Radcliffe noted he is “very uncomfortable” over the next couple years. “With reassessment coming up, uncertainty over the school issue … I’m not sure the citizens can stand what might be coming down the road,” he said.

Goodman also suggested council might consider a sunset clause that would cause a tax hike to expire at the end of two years.

East said considering the use of reserve funds would force council to “look at what we’re doing” in the area of spending.

Glenn said council hasn’t yet done what he would like to do and take a line-by-line look at the entire town budget.  “Going line by line lets you find out where things are you need to fix,” Glenn said.