By Angie Mayes
Mt. Juliet News Correspondent
Mt. Juliet Commissioner Ray Justice gave an optional city funding presentation to a proposed property tax increase Friday at a Mt. Juliet Chamber of Commerce meeting.
Justice told the crowd of various options to fund the fire department and help fund infrastructure needs.
The original proposal from city staff was a property tax increase to a total of 59 cents, which would be broken down to 39 cents specifically given to fire department needs and 20 cents directed to infrastructure projects.
“In 2011, Wilson County passed a resolution that stated Wilson County would not cover the fire services for the city of Mt. Juliet above what they were currently providing,” Justice said in his presentation. “Any enhancement to the city of Mt. Juliet’s fire coverage by the city itself would result in the city having to take over all fire services. The funding of this project would fall to the city taxpayers to fund. Our taxpayers had to have fire service. It had to be funded.”
He said the tax rate for the city of Mt. Juliet was not lowered, although the service was no longer provided.
It was lowered from 20 cents to 16 cents in the past due to reappraisal of properties, according to Mayor Bill Hagerty in a Mt. Juliet City Commission meeting a few months ago.
“The current property tax funds the Mt. Juliet Fire Department,” Justice said in the presentation. “[We have the] lowest city property tax rate in Wilson County. [The] proposed city property tax rate increases to 59 cents or 39 cents would still be lowest city tax in Wilson County.”
The current property tax on a $150,000 home is $62 per year. On a $300,000 home, it is $125. On a $500,000 home, it is $208.
“The current budget deficit for [the fire department for] fiscal year 2018-2019 is $450,000,” he said. “[For the] 2019-2020 projected [fire department] budget deficit at the .1664-cent property tax rate is $565,000. [The] majority of property tax revenue is received between December and February. Depleting reserves creates cash flow problems from July to November. [The] current plan for construction and operational cost of additional fire station is why we are having these discussions.”
To build a proposed fire hall on the north side of the city near the new Green Hill High School, the cost is estimated to be $4.138 million, while operating costs would be just less than $2 million.
Justice said there are additional needs for the fire department. An increase of funding would help the department “close existing budget deficit [of $565,000], add staffing for at least one ladder company [at 12 personnel with four per shift]; critical need based on increasing number of multi-story facilities, including assisted living complexes; staffing could be phased in over time.”
Also, the city would need to replace self-contained breathing apparatus and turnout gear, replace the Center City fire station behind city hall and replace squad 103 and engine 104 in 2023. The need to add staffing for a dedicated shift commander of three personnel with one per shift, and replace compressor and radios, Justice said in the presentation.
Justice said under the first option, which was previously proposed, the city would raise taxes. To fully fund the current operation, it would levy a 23.5-cent tax increase. To fund the operations of the north station, the cost would be an additional 11 cents. To cover the additional needs for the north station, and then the City Center station would cost 4.25 cents, for a total of 39 cents.
The increase for a $150,000 home would be $84, which would bring the total to $146. For a 300,000 home, the cost would be an additional $168, which would bring the total to $293 and for a $500,000 home, the increase would be an additional $280 to $488.
A second option would be to increase the tax rate to 59 cents. That would increase the tax rate for $150,000 from $159 to $221. For a $300,000 home, the increase would be $318 to $443. For a $500,000 home, the increase would be $530 to $738.
Other options include a sales tax increase from 9.25 percent to 9.75 percent, which would generate an estimated $555,000 annually. That would require a public referendum to pass or fail the measure. Last year, Wilson County proposed an increase by referendum, but voters rejected it by about 2,000 votes.
There could be general fund transfers to cover deficit. The general fund supports all other city departments and includes current transfers to state street aid fund, debt service fund, and capital projects fund, Justice said.
Impact fees are also an option, Justice said.
“Impact fees for infrastructure are very common for cities and counties,” he said. “Justification studies are underway to determine actual cost of growth. [We can use] per-capita costs of growth. Williamson County recently was allowed to implement and take advantage of [an] impact fee by the courts.”
The newest option is to use half of the hotel-motel tax that guests pay in their bill and is collected by the hotel or motel. The funds were originally dedicated to parks capital improvements, Justice said.
“[It is] now bringing in about $800,000 per year,” Justice said in his presentation. “A cap of $400,000 would continue to be dedicated to capital parks projects. The remaining $400,000 would be directed to the fire department to help offset the current deficit.”
Fees for infrastructure are about $1.8 million.
“TDOT has announced four projects being placed in the three-year plan for Mt. Juliet-west Wilson County, all as a result of the IMPROVE Act,” he said.
That includes an interchange at Central Pike, right-of-way acquisition on Lebanon Road and right-of-way acquisition on South Mt. Juliet Road, from Central Pike to Providence Drive, according to the presentation.
“The total cost for road and greenway projects between 2020 and 2024 is estimated to be $37,841,438,” Justice said.
The city projects nearly $17.1 million would come from state and federal grants, the presentation said. City funds for the projects are estimated to be nearly $19 million that would be spent in the next four years, according to the presentation.
For a project, the estimated costs, which would affect road projects are $75,000 for turn lanes, $180,000 for a red-light addition, $300,000 for a road widening and $70,000 for sidewalks along peripheral roadways, for a total of $625,000, Justice said. The per-home impact fee would be $2,500 and with the increase, would be used to help pay for infrastructure projects.