About 20 people attended a special public hearing this week in Fairfield on a proposed utility tax, and opinions were split between those adamantly against any tax and those who said that while they didn’t like the idea, they understood the need for it.
The Fairfield City Council is proposing a 6 percent utility tax on all Avista electric bills, a move that would bring in about $37,000 in revenue each year. It would add an additional $4.50 to a $75 electric bill and $12 to a $200 bill. “Our budget has been shrinking,” said Mayor Ed Huber. “Our expenses are going up.”
The council has been considering such an idea for years, but has now reached a crisis point. In 2010 the town applied for a Transportation Improvement Board grant to fund a $600,000 project to rehabilitate Main Street. Huber said small towns usually have to apply for such a large grant for several years in a row before being awarded their request. Grant money has been particularly tight recently because of the economy.
The town put in its first request last year and to its surprise received the grant. The town now has to come up with $30,000 in matching funds, Huber said. The situation has put the council “in a position none of us are real comfortable with,” he said. “We felt, as a council, we wouldn’t get funded this year.”
The town of 587 only brings in about $84,000 a year in property taxes, making it impossible to fund such an expense in a time when the street maintenance fund is already struggling, Huber said. “Short term, we could probably fund this,” he said. “We could probably make it work this year but in three years we would be in huge trouble.”
Councilwoman Mary Branon said the town’s declining revenues mean the tax would be needed anyway. “It’s not just about the grant,” she said.
Randy Noble of the engineering company Thomas Dean & Hoskins presented a drawing of what the rehabilitation project might look like. It would include new sidewalks along the city park from Highway 27 to Railroad Avenue, new curb and gutter on both sides of Main, replacement of the railroad crossing, and an asphalt overlay of the entire street. Drainage improvements would also help fix some problems with gravel washing away. “We’ll do the design work this year and start construction next year,” he said.
Resident Larry Zeug questioned why the project was even necessary. “Whose idea was this?” he said. “You’re trying to change our town and make it like Spokane.” Noble said it was up to the council to make the decisions on the project, not his company.
“Is this a forever fee?” asked resident Marie Hahner.
“Right now we really can’t determine how long this would last,” Huber said. While the town only needs one year’s worth of the tax to pay for the grant project, there are other ongoing needs, he said. The town needs to start putting aside money to replace road equipment like its single snowplow, which has been having mechanical problems.
The town also needs a new emergency generator for the town’s water supply. The current generator is of military 1952 vintage, and public works director Travis Glidewell describes it as “slightly beyond its prime.”
“It won’t run steady enough to keep a well running,” he said. It is also located on a well that doesn’t produce enough water to supply the entire town in the event of a power outage. A new generator on a better-producing well would cost about $25,000.
The bottom line is that such expenses can’t come out of the overextended budget, Huber said. The 2010 street fund budget of $71,000 includes more than a third of the year’s property tax collection. It costs $13,000 a year simply to keep the streetlights on, which matches almost exactly the income the city gets from the state gas tax, Huber said.
“I think it has to happen,” Huber said of the utility tax. “I don’t think we have a choice.”
“I don’t want to pay it,” said resident Todd Verhei. “I really don’t.” However, he said that if the city uses the money wisely, it will pay for itself in the long run.
Resident Ted Saselli said the town should look at making cuts first and questioned why there was a deputy city clerk on staff. Branon pointed out that the position is only for 16 hours a week.
“Having a part-time employee is not going to put this town in debt,” said Councilman Brian Kauffman. “You are talking pennies.”
Huber said the council reduced the budget in almost every area for 2011. “We’re here today to tell you we have a need,” he said. “We’re not doing this because we want to. We’re doing it because we need to.”
Resident John Jesseph said the residents could always vote the council out if they don’t like what is done with the tax. “The stuff that you are talking about are basic infrastructure,” he said. “I understand the need.”
Huber noted that the town sent out postcards to every resident notifying them of the public hearing. By law the city can impose a utility tax on electricity, natural gas, cable, telephone, cell phone, water and garbage without a public vote or even a public hearing. Huber said the hearing was held to go the extra mile in explaining why the tax is necessary. “It’s a poor time to do this, I know that,” he said. “We promise to spend it wisely.”
Jeannie Jesseph thanked the council for having the hearing. “You could have just shoved this down our throats,” she said.
The council is expected to vote on whether to enact the utility tax at the end of March or the beginning of April.
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