The Nov. 22 meeting of the Georgetown City Council may have arguably been Mayor Tom Prather’s most frustrating in all his terms in office.
It began during mayor comments when Prather alerted the council his plans to convert the city’s net profits tax to a gross receipts tax was being shelved.
“There will be no further immediate consideration on the gross receipts tax,” Prather said. “I had hoped the equity issues we raised could be addressed and I hope that we can look at that further down the road.
“There were eight one-on-one meetings with the council that essentially stopped any further discussion in the current time frame.”
Those “one-on-one” meetings were with Toyota Motor Manufacturing Kentucky officials. TMMK officials held individual meetings with city council and Scott County Fiscal Court members annually to discuss the Kentucky Jobs Retention Act and expansion plans at the plant.
Previously, TMMK officials had expressed concern that if the gross receipt tax were implemented, its individual suppliers each would be taxed ultimately resulting in TMMK being taxed at several levels resulting in a higher price for its vehicles.
“I had hoped we would have had an opportunity to meet with the business community, and to discuss how this would help small businesses,” the mayor said. “I don’t think we ever really had the opportunity to explain that.”
Later in the meeting as the council began to formally finalize its transition to privatize garbage collection, Prather was taken aback by a proposal by council member David Lusby. The city had been negotiating with Republic to take over the city’s garbage collection, and an ordinance was to be introduced to finalize that agreement, which included Republic paying a 10 percent franchise fee, which would generate about $210,000, according to city officials.
The city had planned that some members of the city’s sanitation crew would be hired by Republic, but as it turned out, no one wanted to leave the city. Prather and other city officials had promised that no one would lose their job due to the transition. The city had also planned to add seven additional employees to the city’s Public Works department. The net result was a $490,000 deficit for the city.
When Lusby heard about the deficit, he asked, “That franchise fee an arbitrary number? Is there a limit? We’re going to have a pretty good short fall, this first year especially. I would hope we could adjust it to cover the shortfall.
“Why not 15 percent? Why not 17 percent? Why not? Now is the time.”
“It seems a little late in the process to me,” Prather said.
“I think it’s worth talking about,” Lusby said. “This seems like low hanging fruit to me. It’s not too late. Things happen.”
Other council members seemed to rally to Lusby’s side.
“I hate to get into this on the back end, but this is probably the wisest time to do it,” said Tammy Lusby-Mitchell.
City attorney Devon Golden and chief administrative officer Andrew Hartley each pointed out they were unsure if the city would have to issue new bids if the franchise fees were adjusted.
“Rebidding this would be a disaster,” Hartley said.
In order to preserve the process the council held first reading on the ordinance giving Republic an exclusive franchise to collect the city’s garbage and to begin a recycling effort. This ordinance sets the franchise fee at 10 percent.
As of Monday, city officials have learned there does not have to be a rebidding process, so the council may reconsider the franchise fee at its next council meeting in early December.
“We know we have a really good bid,” Prather said. “But this is something the council can consider. We went through a very thorough vetting process, including verifying with the council all the elements including the franchise fee.
“At the State of the City address I announced the residents’ fees would be $15.68 per month. This will obviously increase that rate. The suddenness of this does not feel right. But I understand where the council is coming from. The city needs more revenue.”
At the council meeting Golden emphasized that any increase in the franchise fee would be passed directly onto the taxpayers. City officials estimated that an increase to 15 percent franchise fee would add $1.50 monthly to the resident’s sanitation fee, and increase the city’s revenue to about $280,000 from the franchise fee.
Lusby stressed that it had been 15 years since the city had increased the cost of its sanitation services.
“Why would we want to continue with a loss year after year,” Lusby said.
“And we’re adding recycling services,” said Lusby-Mitchell.
Mike Scogin can be reached at email@example.com.