Loyall City Council discusses money woes

By Mark Bell - For the Enterprise

It’s a new year but the same story – the city of Loyall doesn’t have enough money to keep things going for long.

During their regular monthly meeting on Monday, Mayor Clarence Longworth reminded everyone again of the hard choices they will be facing if city officials do not come up with more ways to increase revenues.

“Otherwise, the bottom line is we will have to start making some cuts, ” he said at one point. “If we don’t, we’re not going to have a city.”

The problem with making cuts is the city has few options other than laying off employees, Longworth said, and the staff is down to the point that further reductions will reduce basic services everyone expects for the taxes and fees they already pay.

While the balances in the city’s various funds are currently sound at over $80,000 in total – with some slowly growing – the mayor reminded the council, employees and citizens who gathered for the meeting that whatever extra was now being saved was going to disappear halfway through the year when a large insurance premium comes due.

The city’s policy is underwritten by the Kentucky League of Cities and covers workers compensation, vehicles, property and general liability. Last year the city paid over $36,000 for the policy. The clerk estimates payment for the current year could be as much as $38,000.

Property tax revenue continues to decline as more exemptions are granted and fewer homeowners, as opposed to renters, reside in the city limits. As a result, Longworth said raising money from property tax was not a promising option. Council members agreed it wasn’t fair for a few property owners to carry the burden for all others.

Paul Collins, operator of the waste water treatment plant, asked the council to consider a “maintenance surcharge” for water and garbage customers as other communities have done. This would at least help cover the increasing costs for maintenance costs and inspection fees in the sewerage system, he said.

Councilman Clark Bailey asked about the possibility of turning the sewer service over to Harlan’s regional system, a plan which Longworth said was still under consideration.

While that would relieve the city of the costs of operating the system, the mayor said, it would also cut off one more source of city revenue and deprive the city of the staff currently employed to manage it as well as work with other departments on shared responsibilities and projects.

Current city employees include two police officers, two maintenance department employees, and two clerks who deal with the increased paperwork required to manage daily and monthly city hall business. The city also provides for two citywide garbage pickups per month, Longworth noted.

“We just don’t have anybody we can make things work without,” he said.

The city’s LGEA (local government economic assistance) fund, which the city has used to help cover the costs for its police force, is provided to coal-producing counties and funded largely by coal severance dollars. The recent collapse of the coal industry has meant those dollars have dropped from $17,000 per year to between $5,000-$6,000, the mayor added.

“As you can see, the LGEA fund is essentially zero right now,” Longworth noted.

New sources of revenue have been rental fees the city has charged to various groups for the use of city hall’s property, a former school building, and new privilege licenses that police have been diligent about collecting, Longworth said.

David Lewis, the newest council member appointed late last year to fill an unexpired term, suggested the council look at some sort of utility tax, which would also be a more fair approach as it would probably spread the cost across the most people.

“We need to do something before the next budget to keep us afloat,” Longworth commented. “Nobody likes it but to keep this town afloat, we’re all going to have to pay a little bit.”

By Mark Bell

For the Enterprise

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