By Jeremy D. Wells
Carter County Times
Olive Hill City Council met in special session on Monday night, mostly to discuss budget issues and to enter into the first reading of a budget ordinance that must be passed before the July 1 start of a new fiscal year.
The budget presented by city clerk and treasurer Chimila Hargett included significant cuts to insurance benefits for city employees and removes the school resource officer position from the city’s police budget.
But though Hargett promoted the lowest of three insurance tier options presented to council – which is still $11,000 more than the city was paying for their plan, council chose the middle tier option, at a cost of $16,000 more than the current costs.
Keeping their current coverage, which would increase costs by around $38,000 for the year, wasn’t an option anyone was willing to entertain. However the increase in premium for employees with the lowest tier plan – which would increase employee out of pocket costs by around $1,000 even if they never use their insurance – wasn’t an option councilman Justin Dixon or Eric Rayburn wanted to pass on to employees.
While he acknowledged council needed to look out for the interest of tax-payers and the city’s bottom line, “we’re supposed to be looking out for our employees as well,” Dixon said.
But Hargett noted that with the second option there was up to a 20 percent co-pay, up to the out of pocket maximum of $3,5000. That means, depending on their healthcare needs, employees could end up paying more for the middle tier plan if they have a lot of expenses. If they don’t have any major issues that would require that co-pay, however, the middle tier plan would leave more money in employee pockets.
Rayburn recommended the city find some way to finance the additional $5,000 in costs for the plan – a plan that Dixon moved to adopt after much discussion among council of the various pros and cons.
Instead of moving forward with a budget that was not balanced, or significantly reworking the budget, Hargett recommended council approve the budget as presented. She said she would then determine the increased cost for each department and deduct the difference from their supply budgets to keep the budget balanced while providing the middle tier of insurance championed by Dixon and Rayburn and approved by council unanimously.
The budget, which Hargett said projects a half million dollars more in income for the city than last year, also includes an increase of half a million dollars in costs.
“So, we’re basically holding steady,” she said.
But the city is still around $103,000 short on what they need to fully fund their budget, even with the projected increases, Hargett said.
As far as taxes and other funding sources, Hargett noted there is “little we as a city can increase,” to make up that budget shortfall. One of the few options the city does have is to increase occupational taxes. Otherwise, Hargett noted, “the general fund is where we need to make some hard decisions.”
One of those decisions was to remove the position of school resource officer. Though that position is funded mostly through the school district, Hargett noted that the cost for officer salary during the summer months is not covered by the school district. Those costs, including salary for the three months of summer break, and retirement and other benefits, cost the city around $25,000 a year, Hargett said.
There was brief discussion of making one of the city’s part-time police position a full-time job, but that would cost the city an additional $50,000 a year at a time when they are attempting to cut costs.
Though council discussed other ways of raising funds without tax increases, including extending utility services outside the city and annexing more land to increase the city’s tax base, Hargett told council she doesn’t see any other way to guarantee the money is available as budgeted.
If they can’t increase the tax rate enough to raise $103,000 in occupational taxes for the year, Hargett said, they may have to cut their budget again.
Councilman Chris Bledsoe suggested making a motion to add the additional occupational tax. However Hargett said she wasn’t yet sure of the total increase required to raise the necessary funds. She suggested waiting for the next regular meeting, and voting on the increase when they pass the budget, and Bledsoe’s motion died for lack of a second.
Before entering into he first reading of the budget however, council discussed the school resource officer position. Mayor Jerry Callihan noted that it was the responsibility of the school district to fund the school resource officer (SRO) position, but that they didn’t need to fund the position during the summer months. The school district isn’t required to work with the city police department to fill the position either, he said. They can also contract with the sheriff’s office, or another municipal system. Callihan noted that the SRO was only stationed at the high school anyway, so would need to respond off-campus for any incidents arising at the middle or elementary school. And, he noted, even if they removed the SRO from campus, that didn’t mean Olive Hill Police wouldn’t respond in an emergency situation. The elementary, middle, and high schools are all within city limits, he said, and police would respond as quickly as possible in an emergency.
Council moved to approve the first reading of the budget after returning from executive session to discuss possible or pending litigation.
That budget includes $1,155,785 in the general fund, $70,859 in municipal road aid, and $5,379,953 in the utility fund budget.
Though individual line items aren’t broken out in the preliminary budget Hargett shared, it does show an estimated total of $959,000 in tax revenue collected for the general fund – a significant portion of the more than $1.1 million budget total for that fund.
In other action, council let an agenda item related to the clean water grant resolution die for lack of a second. A representative with FIVCO explained that there are additional steps that need to be taken before that resolution may be passed. He asked council to vote down the current resolution, or to let it die for lack of a motion – with council choosing to let the measure die for lack of a motion.
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