Simpson Fiscal Court approved first reading of ordinances increasing the county occupational tax rate, placing the 911 service fee on water meters and adopting the county's Fiscal Year 2019-20 budget at its May 21 meeting.
The votes to pass first reading of each ordinance were not unanimous with magistrate Marty Chandler voting no on each ordinance. All other members of the court voted yes on each ordinance.
A county ordinance must pass a first and second reading court vote and be published before taking effect. The budget ordinance must also receive state approval.
The county's 2019-20 Fiscal Year begins July 1.
The court is proposing to increase the occupational tax rate paid by all persons employed in Simpson County to one percent. The current rate is three quarters of 1 percent.
If approved on a second reading vote, the increased tax rate would take effect July 1 and would generate an estimated $730,000 to $750,000 additional revenue for the county during Fiscal Year 2019 - 20.
Simpson County Judge/Executive Mason Barnes issued a prepared statement about the occupational tax increase.
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"The decision made by fiscal court regarding the budget ordinance was not one that was made lightly," Barnes said. "We had several budget sessions and gathered copious amounts of information on the pension issue and 911 funding. Ultimately, we decided it was in the best interest of our community to address both issues in our budget. During the 2018 campaign, I spoke at length about my thoughts, that the county's cash position had us ill-prepared to handle the increase in pension liability. Our current cash position will only cover approximately two months of operation.There is current state legislation, KRS 61.565, which clearly states that we will experience an annual retirement contribution rate increase of not more than 12 percent, beginning on or before July 1, 2018 and going through June 30, 2028. We've seen an over $135,000 increase in pension contribution from the previous fiscal year to our current fiscal year. We are also facing an almost $120,000 increase in pension contribution from this current fiscal year to the next. That trend will continue as long as KRS 61.565 is law. What does that mean? It means, that had we taken no action, and continued taking no action, at the end of Fiscal Year 2023-24 our cash balance would be approximately $120,000 in the negative. It is extremely fiscally irresponsible to know that you are facing a situation such as this and choose to ignore it. Thankfully, we did not choose to ignore it. It is worth noting that this pension issue was not created by us, nor did it just now arise this year. This situation has been staring us in the face for the last two or three years. I believe the Magistrates who voted to affirm this ordinance are to be commended. I have said before, that saying no can be very difficult, but sometimes saying yes is even more difficult. This was definitely one of those times where saying yes was more difficult. The occupational tax rate will go from 0.75 percent to one percent. Even with that increase we will not be collecting enough revenue to cover the pension cost by fiscal year 2025/26, but we will have built the reserves to a point that we can cover it, and by June 30, 2028 we will still have at least as much cash reserve as we currently have on hand. There are still two outstanding issues concerning the pension we are unsure of at this time. The first being, the state auditor's pension report shows Simpson County's unfunded liability at $9.6 million. The increased rates we are facing due to KRS 61.565 have absolutely nothing to do with addressing our unfunded liability. We are still unsure how that will be dealt with. The second being, funding for our local health department, in light of the pension issues they are facing. At this very moment it appears that as of July 1, 2019 their pension rate will jump from 49 percent to 84 percent. Simpson Fiscal Court is obligated to fund our local health department, and we will ultimately have to deal with this also."
If the ordinance is approved on a second reading vote it would be the county's first occupational tax rate increase since the county adopted an occupational tax in 2003.
The ordinance placing the two-dollar 911 service fee on water meters places the fee on each and every water meter in Simpson County with the exception of agricultural irrigation water meters.
The ordinance says every water company, water association or other entity operating a water distribution system in Simpson County will collect the fee.
The Franklin City Commission has already approved waiving administration fees for implementing the 911 fee on city water meters.
The fee on water meters would replace the $2 911 fee charged on landline telephone customers in Simpson County by January 1, 2020.
The change in how the 911 fee is collected is being proposed due to a decrease over the years in the number of land line telephone users.
The county oversees funding for 911 dispatching provided by Kentucky State Police in Bowling Green.
And, the county's proposed Fiscal Year 2019-20 budget is balanced with revenue and appropriations both at $15,089,475.
All six funds within the proposed budget are balanced.
The general fund totals $7,407,172; the road fund totals $1,908,365, the jail fund totals $4,373,638 dollars, the Local Government Economic Assistance Fund totals $175,400; the federal grants fund totals $1 million and the 911 fund totals $224,900.
Following the meeting Chandler talked about his no votes on the three ordinances.
"I voted no on the budget ordinance to begin with because I think in the future there may be a time when we need to raise taxes, but I didn't feel now is that time," Chandler said. "There are revenue sources I don't feel like were looked at correctly and we don't know for a fact that those pension numbers are exact, they are projected, but projections can change. So for that reason I felt like it wasn't a good time to raise the tax. I only want to raise a tax when it is absolutely necessary. I'm not proactive when it comes to raising taxes, I am reactive to it."
Prior to the votes on the ordinances Barnes said the occupational tax increase ordinance and the ordinance placing the 911 fee on water meters were both tied into the budget ordinance as it was presented.
Also at the meeting the court awarded 2019-20 bids for road salt, asphalt and rock. IBG Magic of Kentuckiana, LLC was awarded the salt bid, Deweese Construction was awarded the asphalt bid and Hanson Aggregates was awarded the rock bid.
The annual Barren River Area Development District Aging Services Agreement was approved. The agreement allows the Barren River Area Development District to administer donated funds for social services.
Approval was given to a resolution and memorandum of agreement with the Kentucky Transportation Cabinet. The documents relate to the recent announcement that $562,332 in state funds are allocated to Simpson County for resurfacing on six county maintained roads.
The six roads the funds will used to resurface include Dinwiddie Road, Duers Mill Road, Henry Clay Smith Road, Peden Mill Road, Gregory Road and Brizendine Road.
A resolution and authorization to apply for a Kentucky Office of Homeland Security grant were approved. The grant would fund equipment for Franklin-Simpson Fire Rescue and a backup generator at the communication tower. It is unknown the amount of funding in the grant.
And, Mike Simpson, manager of Oasis Restaurant, was appointed to the Simpson County Tourism Commission to fill an unexpired term that runs through March 17, 2021.