Council approves utility tax

Edgewood Council passed the final reading of a 3.5 percent utility tax five to two, as well as the 2010 budget, on Dec. 8.

Council members Donna O’Ravez and Steve Cope cast the dissenting votes on the tax.

Council members in support of the tax hope it will cover the city’s looming $450,000 shortfall, an amount that has been chipped away at line item by line item for months.

“We have spent a very, very long time on this budget,” said Councilmember Paul Crowley before voting to approve the budget. “This has been a pretty contentious time… (with) differing opinions on what should or should not be done. I think this is the best budget we could put together under the circumstances…(we have made some) pretty tough cuts.”

Cuts include the loss of three law enforcement positions and three city staff. Council also put a freeze on staff salaries and increased benefit contributions.

The council made its final decision after months of discussion, six budget workshops, two public hearings and a public forum on financial options for the city.

At the meeting Dec. 8, council heard largely words of support for the tax as a way to keep the city alive.

Small business owner Robert Robinson said he appreciates what the city had done prior to implementing a tax to reduce expenditures. Retired resident Ken Fernandez said he supports the tax to ensure residents would have adequate police protection. Resident Fred Brown noted that a week prior he was “1,000 percent against a utility tax” but now supports what he views as a necessary cost.

Chris Zezek said he was “for the utility tax” but did have some concerns.

Frank Hagel and Marsha Walker wrote a letter to the city sharing that they “totally supported” the tax.

Former council member Rose Hill said she supports the tax, but encouraged the council to go to a vote of the people.

Parks and recreation advisory board member and retired librarian Diane Kerlin noted a utility tax is Edgewood’s only option.

“My city is very important to me and I can scrape together enough to pay utility taxes,” said Kerlin, who is on a fixed income.

Adding expenses to residents who may be already facing financial hardships due to a fixed income or because of the tight economy was a concern for many council members.

Finance Director Janet Caviezel noted the approved tax, which puts a 3.5 percent tax on all utilities except water, would cost an average of $14 per month based on a home that paid $400 a month on utilities.

“This (tax) isn’t for anything new, it’s to sustain what we have and (what we have has) even been reduced,” Mayor Jeff Hogan said.

Despite the support for the tax that the council heard Dec. 8, not all residents feel a utility tax is the answer to the city’s financial woes. Following the decision by council, Edgewood resident and business owner Eric Docken filed a referendum on the tax to the city Dec. 14. Docken and other utility tax opponents have 30 days to gather 950 signatures of registered voters in Edgewood to repeal the tax. Docken was unable to be reached for comment by press time.

If a petition is unsuccessful, the 3.5 percent utility tax will take effect Feb. 14. The tax will expire at the end of a 36-month period.

If the tax is repealed, the city will need to operate on reserve funds until another revenue source or cost-saving option is implemented.

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