Whitesburg KY
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Workers in W’burg will be taxed 1.5% on their paychecks

In a move that will put Whitesburg level with most surrounding cities, the Whitesburg City Council voted unanimously at its September meeting to institute a one-and-ahalf percent payroll tax on people working in the city. The tax would not affect retirement benefits or entitlements including unemployment and Social Security.

The move came after the council heard bad economic news about issues with the city waterworks and met in executive session to discuss pending litigation with Veolia Water, which ran the city’s water and sewer operations for a number of years. No action was taken during the executive session.

The vote came after Mayor James Wiley Craft outlined the dire straits the city finds itself in economically and reminded the council that for the past two years he has stressed how important it is for people who work in the city to pay their occupational license fees and participate in purchasing city auto stickers.

Craft said that so far this year, out of 2,000 notices that were sent out by City Hall concerning occupational licenses, the city has received payment for only 200. Craft added that of 2,000 city auto stickers printed and purchased by the city, only 600 have been sold.

Craft told the council it is no longer possible for the city to operate in the 21st Century on revenue streams that were designed to provide cities with income in the 1950’s. He pointed to increases for insurance for police officers and firefighters as an example, and said that while costs for nearly everything else have also gone up the city’s revenues have remained static or gone down.

Craft also told the council the city has set up a one-day-per-pay-period (two weeks) furlough for all city employees except firefighters and police officers. He said the furloughs eat into already low salaries for city workers, many of whom already make the minimum wage of $7.50.

Councilman Tom Sexton said he’s embarrassed that the city can only afford to pay its employees minimum wage. Other council members agreed the city has a fine and dedicated work force that deserves better.

“I have people at City Hall getting $7.50 an hour,” said Craft. “Now they get 72 hours instead of 80 (per pay period). They have families and bills to pay but they are sacrificing to see that we can function.”

Craft said he had already cut his own pay in half, from $8.00 per hour to $4.00 per hour and added that the city is currently moving forward development-wise and cannot afford to move back.

Craft said that although as the Letcher County seat, Whitesburg is home to the county courthouse, county health department, the county’s $6 million recreation center, two schools, the ARH hospital, Mountain Comprehensive Health Corporation, and several other state and federal agencies, none of those buildings are subject to city property taxes. He said the failure of people working in the city to pay for occupational licenses and to buy city stickers leaves the council with little choice. He added the city has three doctors on the delinquent rolls for occupational licenses and one of those hasn’t paid in two years. Craft then suggested instituting the one-and-ahalf percent occupational tax, saying that if the tax passed it would put an end to the occupational licenses and city stickers

Council member Robin Bowen Watco said it pained her to make the decision but added that the council’s first obligation is to the city and the city must be preserved. Watco made a motion that the council institute the requested occupational tax and Sexton seconded. In the discussion, Councilman John Williams said he would prefer a one-percent tax but added that anything that would resolve the situation with Veolia would sound good to him.

“Whatever it takes to get Veolia out of our hair,” said Williams. “They are destroying us.”

The council voted unanimously in a roll call vote to approve Watco’s motion, which also authorizes the city attorney to draft the ordinance authorizing the tax.

Craft said the council has to conduct two readings of the ordinance before it can pass, giving the council time to fine tune the ordinance at the time of the first reading.

In other business, Water Maintenance Director Chris Caudill delivered a report that showed the council the need for action as he told them that the city will need about $70,000 to address problems with the city water system and will need it sooner rather than later.

Caudill said lightning from recent storms struck two different pump stations and two pumps burned out. The two pumps that were destroyed have proven impossible to replace. Caudill said there are no replacements to be found and the pumps will have to be fabricated at a cost of at least $7,700 each. He added that another pump that was thought to be down is all right but the variable speed controller that allows it to work in conjunction with the other pump at the station was destroyed and will have to be replaced. He said that the total costs of the pumps and other equipment and service calls will be about $40, 000 and added that the problems with the city water line crossing the Kentucky River near the Craft’s Colly railroad bridge are getting worse and the section of line will have to be replaced soon, at a cost of at least $25,000.

Paul Nesbitt of Nesbitt Engineering told the council that his company is working with Caudill to find funding to address the problems at the water plant and with the pumps but added that the funding climate is very harsh right now. Nesbitt said he will probably be telling them the same story for a while but it will take quite a bit of time to come up with the necessary funds to take care of the city’s water needs.

Lee Anna Mullins of the Mountain Heritage Festival Committee addressed the council and asked for the city’s customary cooperation for the festival. Mullins said that would include the usual police protection and sanitation department pickups, use of the city’s parking lot, and “all you have done in the past.”

Councilman James Bates moved that the city extend its usual hospitality and cooperation to the festival and the vote was unanimous to approve the motion.

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