Utility tax in Edgewood?

Edgewood voters will get a say in the financial fate of their city April 27.

Edgewood City Council approved a resolution 4-0 on Feb. 16, to place a 3.5 percent tax on all utilities (except water) on the ballot for the next special election.

Councilmembers Steve Cope and Dave Olson were not present to cast their votes.

This decision follows an ongoing debate between council members and the community on whether or not to implement the tax. In December 2009, the council approved the tax. Following council approval, an anti-utility tax group gathered 1,201 signatures in petition of the decision. Petitioners needed a minimum of 950 signatures.

Council members present at the Feb. 16 special meeting agreed that they were uncertain whether or not the measure would pass, but that putting the issue to the people was the only option to save the city’s financial future.

Cope issued a letter to be read on his behalf, urging the council not to place the measure on the ballot, and look for other revenue-saving options instead.

Cope said he believes the ballot measure would not pass, based on collected signatures and the failure of the 2005 utility tax vote. He also noted having the measure on the ballot would cost the city additional money, further hurting its financial situation.

He suggested cutting two additional full-time employees, allocating right of way acquisition revenue from the State Route 161 widening project to the general budget (an amount that currently cannot be disclosed due to ongoing negotiations) and using $79,000 of the city’s reserve funds to help balance the budget for 2010.

Councilmember Paul Crowley said he believed not placing the $500,000 revenue increasing tax measure on the ballot would be irresponsible, and the issue would likely resurface again next year.

“Pretending we can do anything at this point without raising taxes is going to make it worse,” Crowley said. “Maybe this could be resolved for another year, but then we’re right back here next year with the same decision.”

Crowley also noted that he felt voters would see that approving the tax is a necessary decision, unlike the higher-rated, highly controversial utility tax proposed five years ago.

“This is a targeted, limited and short-duration tax” to keep the city afloat, he said. “There really is no other way we’re going to do it.”

If the tax is approved, it would generate about $500,000 a year for three years, covering the city’s $450,000 budget shortfall and maintaining reserves. At the end of three years, the tax would expire. The tax would add an extra $14 a month to utility costs, based on a home that spends $400 a month on utilities.

If the tax is rejected by voters, the city will be forced to make further cuts to staff, and police staffing will drop below 24-hour coverage. The city would also likely have to use its reserve funds of about $2.2 million to help cover the city’s operational costs.

Mayor Jeff Hogan said he was not enthusiastic about placing the measure on the ballot, or increasing taxes, but not doing so would be “postponing the inevitable.”

“Burning through reserves… we’ve done that for two years now – we can’t keep burning through reserves,” Hogan said. “And those cuts (to staff and police) can be made – but it’s going to be very painful (for the citizens). I don’t know what else to do.”

The public can expect to hear campaigning on both sides of the issue before casting their ballots in April.

The measure requires a simple majority (50 percent and one vote) approval to pass.

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