Council shoots down two revenue proposals; mayor says more layoffs in store

Huntington Common Council members Erv Ebersole and Brooks Fetters (from left, backs to camera) listen as Huntington resident Mark Krumanaker discusses a proposed trash fee during a packed public hearing Monday, Nov. 23, at Heritage Hall.
Huntington Common Council members Erv Ebersole and Brooks Fetters (from left, backs to camera) listen as Huntington resident Mark Krumanaker discusses a proposed trash fee during a packed public hearing Monday, Nov. 23, at Heritage Hall. Photo by Cindy Klepper.

A shocked Mayor Steve Updike was left trying to figure out what to do next after the Huntington Common Council on Tuesday, Nov. 24, shot down both of his proposals for keeping the city from drowning in red ink.

"I am just overwhelmed," Updike said as he stood in his office following the two-hour council meeting. "I am speechless. I thought that vote was in."

The result, he says, will be the loss of more city employees.

"Layoffs are coming," Updike said. "I have to save money.

"We'll do every kind of thing we're going to have to do to scrimp and save money."

Both a trash fee and an increase in property taxes for 2010 were rejected by the council, which also voted to table until its Dec. 8 meeting a proposal to abolish the park board.

The council, on a 4-3 vote, rejected the proposal to charge each city resident a monthly fee for trash pick-up. That vote came after an hour-long discussion in which the proposal was amended to lower the proposed fee from $10 to $3 a month and to put a one-year limit to the time the fee could be collected.

A number of other proposed amendments to the trash fee proposal were rejected.

Council members Joe Blomeke, Erv Ebersole, Jason Fields and Steve McIntyre voted against the trash fee, with members Jack Slusser, Keith Eller and Brooks Fetters casting votes in favor of the fee.

Slusser and Eller cast the only two votes in favor of the request to initiate an appeal with the Indiana Department of Local Government Finance. That appeal, if it had been successful, would have resulted in every property owner in the city being charged an increased amount in 2010, and in 2010 only, to make up for a nearly $1.4 million shortfall in the amount of property taxes received by the city in 2008 and 2009.

Voting against the appeal were Fields, McIntyre, Blomeke and Ebersole; Fetters had to leave the meeting before the matter was put to a vote.

"So we're back to square one and have no generation of revenue at all?" Updike asked after the vote.

"Correct," Clerk-Treasurer Christi Scher replied.

City officials say they became aware of the shortfall only last month. Refunds had been paid out to city property owners who filed successful appeals of the assessed values on their properties.

A public hearing on the two proposals - the trash fee and the tax appeal - had been held the previous evening.

Of the 300-some people who turned out for the public hearings on Monday, Nov.23, just 16 chose to address the proposed trash fee. A majority of the 300 left Heritage Hall before a second public hearing - scheduled to gauge public sentiment on the possibility of temporarily increasing property taxes in the city - even began. Those who did speak were mostly opposed to paying any additional fees or taxes.

"Enough is enough," Joe Gamrat told council members during the Nov. 23 public hearing. "We have got to cut the reckless spending in the city."

Capt. Pat Scher, representing both the Huntington Police Department and the Fraternal Order of Police, told council members during their meeting on Nov. 24 that his survey of the city showed that most Huntington property owners are paying less in taxes today than they were five years ago.

The amended trash fee proposal would have brought in about $200,000 a year with its $3-a-month charge. That might help in getting the city through its current crisis, Fetters said.

"It may mitigate some of the issues as we try to prioritize essential services and how we deliver them in the most efficient way," Fetters said.

"The problem is, we're running out of time," Updike told council members. "After the county pays us our (property tax) settlement, we will not have enough money. We will be in the red."

Saying the city is "close to a financial abyss," Fetters urged his fellow council members to approve a comprehensive analysis of city services, costs and revenue, something the council had previously discussed with Umbaugh, its financial consulting firm.

Umbaugh representative Todd Samuelson said during the Nov. 24 meeting that his company would charge an hourly fee not to exceed $60,000 to conduct such a study. The process would take four to six months, he said, and would "study every process the city has."

Fetters also asked that council members receive monthly executive summaries of the city's income and expenses throughout the year.

Blomeke agreed with Fetters.

"We need to fix ourselves within, not keep reaching out for more money," he said. "We need to get a plan."

Updike said he proposed the elimination of the park board because council members had previously expressed a desire to have more direct control over the spending of funds allocated to the parks and recreation department.

When McIntyre asked for an explanation of how elimination of the board would benefit the city, parks and recreation department Superintendent Denise Bard replied that it probably wouldn't - and it might even cost the city money.

"Without the park board, we lose the opportunity to pursue several grants," she said. "Some grants require that there be a park board in place."

In addition, she said, "It's advantageous to have five different opinions."

Each of those five board members, she said, is paid $50 a month, and several of the members have offered to forfeit that pay and even return what they've already been paid this year.

In tabling the proposal until Dec. 8, council members said they wanted to get input from city residents before voting.

Residents who gave their input during the Nov. 23 public hearing were nearly unanimous in asking city officials to look for ways to cut expenses rather than increase fees paid by citizens.

Charles Chapman, raising the question of how a new fee would affect economic development, urged the city officials to "look at other ways to remedy the shortfall" - perhaps by instituting four-day work weeks and furloughs for city employees.

Some just wondered how the city had gotten to this point.

"Why did this happen?" Rosella Corll asked. "Who takes care of overseeing the finances of the city?"

Neal Bales and Teresa Kaylor, who both own rental properties, noted that 37 percent of the homes in Huntington are rentals and that a large number of those renters - 60 per-cent of his tenants, Bales said, with Kaylor saying 28 percent of hers - are already behind in paying their water bills. The proposal called for the trash fee to be added to the water bill.

James Smith, one of the few who supported the trash fee - at least as a temporary measure - said he was surprised to learn there was no trash fee in place when he moved to Huntington.

Josh Miller, while saying he understood the need to increase revenue and could afford to pay the trash fee, worried about those who are struggling to make ends meet.

"That $10 a month increases the pressure," he said.
Miller argued that instead of canceling recycling services, the city should look for ways to make recycling profitable - as, he said, it is in other communities.

"I'm concerned about how our money is being spent in our city," Cindy Gamrat said, urging council members to put together a long-term financial plan. "I support our fire-fighters, too, but I do not support propping up a mismanaged system."

The city's Board of Public Works and Safety had previously voted to lay off six Huntington firefighters as a cost-cutting measure; soon afterward, yellow signs declaring "We support our Huntington city firefighters" sprouted in yards around Huntington.

In all, about a dozen city employees have been laid off in the past month.

John Backes, too, urged city officials to stand back and take a good look at the situation.

"I think a total assessment needs to be done before you start stabbing at, grabbing at an answer that may not be the answer you need," Backes said.

The proposal to increase property taxes in the city for 2010 drew fewer comments than the trash fee, but the speakers were uniform in their distaste for the plan.

Huntington businessman Ed Smith, whose family has owned Smith Furniture for three generations, told the council that he operates a successful business with two old buildings and three old trucks -- successful because the people of Huntington have supported it; old buildings and old trucks because he can't afford to buy new.

His property taxes on those two old buildings, he said, were $17,000 for last year and $22,000 this year.

"Any more is probably going to put us under," he said. "I don't want to do that."

City officials need to consider the timing of any increased fees or taxes that could chase residents and businesses out of the city, said Ken Zuk, a Census Bureau employee. The census numbers recorded in three months will have an impact on the city, and possibly the funding it receives, for the next 10 years, Zuk said.

"It's exactly the wrong time to have people not in Huntington," Zuk said. "We need them here in order to have those numbers for the next 10 years."