After two citizens stood up and asked the council to rethink the rate increase, Craighead said the ordinance would be pulled because Ward 6 Councilor Kathy Warmath was absent from the meeting. Warmath has been hospitalized with pneumonia.
Howard Thompson, a retired accountant, asked the mayor and council to clarify why they were asking for rates to increase by 14 percent. Craighead said the increase would cover $4.5 million improvements to infrastructure and higher costs for operation.
(The Tennessee Department of Environment and Conservation) is requiring us to treat our water to a certain standard, Craighead explained, adding TDEC could dictate rate increases and force the city to improve infrastructure if the city does not carry out the work on its own.
Jeff Baines, commissioner of public works, said if TDEC comes in to dictate the work and Water and Sewer rates, the city and its citizens will be worse off because the rates will be much higher than what is proposed.
Ill assure you we wont like that, Baines said of TDEC dictating the rates, adding, None of us like to do this.
Thompson said the cost of living is not getting any cheaper and peoples incomes are not increasing. He said it would be very difficult for many citizens to afford the rate increase.
Ward 1 Councilor Alex Buhler pointed out that since 2005, Water and Sewer rates have gone up by 26 percent. He said people will be hard-pressed to find the money to pay for an additional increase, especially with high unemployment and a poor economy.
I didnt vote for the increases in 2005 and I wont support this one, Buhler said.
Craighead pointed out the city also bears the burden of higher costs, especially a steep rise in the cost of chemicals required to treat water at the citys treatment facility.
Another citizen, Ronnie Sellars, said that he works closely with fixed-income individuals and said they are already scraping by and an increase on their Water and Sewer rates will endanger their ability to buy necessities.
He said to let TDEC come in and dictate what needs to be done and have them do the work. Sellars noted that fixed-income individuals and senior citizens simply cant bear the weight of another increase, noting, Thats devastating to them.
Craighead then informed the council the ordinance would be pulled due to Warmaths absence. He said the ordinance would appear on the agenda as soon as she recovers from illness and returns.
Ward 2 Councilor Kevin Huddleston said he didnt like having the ordinance pulled and asked for another Public Hearing to be held before it is placed back on the agenda.
They wanted to see and hear how we voted on it, Huddleston said of the citizens who spoke up.
City Attorney Andy Wright said they are not required to have another public hearing, but said they could hold another if they wanted to and Craighead indicated they would have one before the ordinance returns to the agenda.
When the council got down to voting, the proposed budget that was placed on the agenda for first reading drew much conversation and disagreement. The council felt they should not vote in support of the budget due to a lack of consensus and still no way to cover the deficit.
Russell Lee, commissioner of finance and revenue, said voting on the budget on first reading would be the smart thing to do because it can still be amended between first reading and the required second and third readings.
I would encourage you to approve the budget to give us the formal document that can be amended, Lee said.
I dont understand the concept. I dont understand why were going to vote on something on first reading that we dont have a consensus on, said Ward 3 Councilor Rob Cesternino, who said he would vote no on the proposal.
Buhler said he was surprised by the budget when he looked at it and noticed a 10 percent property tax increase was included to cover a remaining deficit of $850,000. He said he didnt want to go on record as supporting a tax increase, even if the budget is later amended before becoming final.
Ward 5 Councilor Haywood Barry supported the vote because he wanted to spur the process along and admitted the proposal before them Tuesday night was not the final budget.
Weve got to have a public hearing and were not meeting tomorrow (Wednesday) and we have a deadline, Barry said. Im not saying this is the final piece of work.
The council asked Wright about the deadline for passing the budget, and his response was simply,
You are strongly encouraged to pass a budget by July 1. However, Wright said with the continuation budget, if there is no tax increase, they can continue without deadline. If theres no tax increase, theres no deadline, Wright said.
The State Comptrollers Office passed a certified tax rate to the City because of the statewide property reappraisal, proposing a 34.5 cent property tax. The rate is currently at 33.5 cents. Wright said tax rates have to be turned into the Comptrollers Office by Sept. 1 at the latest.
Buhler pointed out the $7 million in the citys Rainy Day Fund is the peoples money and borrowing from that fund does not put the city into a deficit because the city is essentially borrowing from itself.
Cesternino has repeatedly said the money in the Rainy Day Fund needs to be used for things like paving and improving infrastructure. He pointed out the budget proposed only $173,000 in paving for the next fiscal year, despite recommendations from Baines that they allocate $900,000 for paving.
That money can be used on our roads, echoed Huddleston, who said the budget proposal has too much money being given away.
Huddleston pointed out in the Water and Sewer fund, $19,000 is given to the Senior Citizens Center and $13,000 is given to the Lebanon-Wilson County Public Library.
We need to quit taking money out of those funds. I think we need to reevaluate how much money we give away, Huddleston said.
When Buhler proposed further cuts to the citys budget, Craighead asked what service he wanted to eliminate to make up the deficit. Buhler insisted he was not asking for services to be cut, but pointed out theres a lot of money going to other things.
Theres nothing wrong with government cutting, theres stuff were giving money to that has nothing to do with that (city services), Buhler said.
Cesternino said the city does not have a spending problem like the Federal government, but rather a revenue problem. He felt they had cut back a lot and said he wanted the city to provide its services exceptionally well. Instead, he said revenues are going to have to be increased.
He has supported a large property tax increase to raise the tax rate to around 99 cents in order to not only erase the deficit, but give the city a surplus to take care of things such as Water and Sewer infrastructure as well as road paving.
Eventually, were going to have to find a way to increase our revenues to provide the basic services, Cesternino said.
The council failed to pass the budget on first reading with Buhler, Huddleston and Cesternino voting against the budget. Ward 4 Councilor Joe Hayes and Barry voted in favor of the budget and Warmath was absent.
Instead of their customary Wednesday budget meetings, due to multiple councilors being unable to meet, the next budget work session was set for 5:30 p.m., Monday, Aug. 8, in the Town Meeting Hall, City of Lebanon Administration Building at Castle Heights.