By Angie Mayes
Special to Mt. Juliet News
About 25 citizens and 10 city leaders met Thursday night at the Mt. Juliet Police Department to present a proposed tax increase plan.
The proposed increase, which would bring the tax to 59 cents for every $100 of assessed property. The increase, like others, would be on all land, homes and businesses in the Mt. Juliet city limits.
Thirty-nine cents of the proposed rate would be earmarked and specifically used for the Fire Department of Mt. Juliet. Among the items it would pay for would be a fully equipped and manned fire station on the north side of the city.
Currently, the station in the center of the city behind City Hall, responds to the north side. The response time is more than nine minutes versus the response times for the central and south districts, which have stations in the area.
The other 20 cents would be used for infrastructure improvements and other costs.
After a 25-minute presentation, members of the public, as well as the city commission, talked about their ideas of an increase. No citizen in the room appeared to be for the increase, but some spoke to just get more information.
The current property tax rate is 16.64 cents. When the property tax was first levied, it was 20 cents, but due to reassessment of property two years ago, it was lowered so residents and business owners would not have to pay more.
On a $150,000 home, residents pay $62 per year. For a $300,000 home, the owners pay $125 per year. For a $500,000 home, they pay $208 per year.
Within the presentation, city finance director Dana Swinea laid out the proposal in a multi-page PowerPoint program. Mt. Juliet fire Chief Jamie Luffman and assistant public works director Andy Barlow also spoke about fire and transportation needs, respectively.
According to the presentation, the fire department’s budget is in a deficit of $450,000. Next year’s projected budget at the current tax rate, the deficit would increase to $565,000. The tax bills are mailed Oct. 1, and the majority of tax revenues come in between December and February.
The deficits are paid by the general fund, but Swinea said when that happens, there is less money for other departments. The current general fund balance is about $1.8 million, she said.
The location for a new fire hall scheduled for the north side isn’t finalized. There is a building pad that was created next to the new Green Hill High School, but it isn’t platted yet, so there is no option for the city to build the station on that land, according to City Manager Kenny Martin. He is also looking for other land, specifically a parcel, which could be donated to the city, he said.
Estimated costs for the new station are nearly $4.14 million, which would include construction, equipment and furnishings, fire apparatus equipment, radios, turnout gear and uniforms. That would be a one-time cost. The annual expenses, which would include payroll, maintenance, fuel, tires and other items come to nearly $1.2 million, Swinea said.
The recommended property tax rate to fund the fire department only would be 39 cents. Included in that number is 23.75 cents to fully fund the current operation, 11 cents to fund the operations of the north station, and then the center station itself would be 4.25 cents.
If the proposed 39-cent property tax increase is approved, owners of a $150,000 home would pay $84 more for a total of $146. For a $300,000 home, the payment would be $168 more for a total of $293. For a $500,000 home, the tax rate would be $280 more for a total of $488.
The Insurance Services Office rates fire departments by response times, hydrants, etc. Currently the city’s rating is a public protection rating of 5. Luffman said currently, the cost of insurance for a $150,000 home is $732. With a new station, insurance premiums could go from the $732 for a ISO of 5, to $600 for a ISO of 4 and $468 for the department’s goal of a ISO of 3. The rates depend on the age of the home and other factor, he said.
Mayor Ed Hagerty said he hasn’t seen a decrease in his rates when the ISO went from 6-7 to 5. He said he doubts there would be a decrease in insurance rates.
The additional 20 cents would be allocated for infrastructure projects. The city has a number of projects underway, including Lebanon Road widening, Old Lebanon Dirt Road widening, the Mt. Juliet Road bridge widening over Interstate 40, the new Central Pike interchange and Central Pike widening.
Some of the projects are mostly covered by grants, but the city will still have to pay its share of the project, based on grant rules. Although the presentation said the projects would cost $194 million with the city to pay $40 million, Barlow said he believed the cost would be much more.
With the full 59 cents approved, property tax rates for a $150,000 home would be an additional $159 for a total of $221 per year. For a $300,000 home, the rate would be an additional $318 a year for a total of $443. For a $500,000 home, the rate would be $530 more for a total of $738.
There are other potential funding sources such as holding a referendum for the citizens to vote on a sales tax increase from 9.25 percent to 9.75 percent. Wilson County recently held a referendum to do just that, and it was defeated.
The city could transfer money from the general fund. That fund supports all of the other city departments and includes current transfers to the state street aid fund, debt service fund and capital projects fund.
During the town hall meeting, there was heated discussion between Hagerty and Vice Mayor James Maness, Commissioner Ray Justice and Commissioner Brian Abston.
Justice said in 2011, the Wilson County Commission voted to basically force Mt. Juliet to start its own department, eliminating the use of the Wilson Emergency Management Agency covering fire protection within the city.
However, Justice said, the citizens still pay a tax within the county property tax rate for WEMA.
Hagerty said it’s is the same with other departments such as the Wilson County Sheriff’s Office.
“But the sheriff’s office has a jail and gives us the school resource officers,” Justice said.
Maness created a spreadsheet seven years ago that outlined estimated costs for the fire department during a five-year period.
Hagerty said many of the estimates were not accurate, and the revenues and expenses were higher than anticipated.
Abston said Hagerty shouldn’t blame Maness for his plan.
“He referenced equipment that was bought used, not leased like we do,” Abston said. “[Hagerty] voted for it, and we agreed to lease them at $300,000 a year.”
Abston said it was “not right to keep the level of service to the city. If we do nothing and the city has to lay off firefighters, [that would be a problem] if something were to catch on fire.”
Hagerty said, if the 39 cents rate were to go into effect, “you would be overtaxing the people, because we don’t even own the land for a future station. I’m not ready to put that burden on the people.”
After the meeting, Hagerty handed out a single-page flyer.
“This is not a revenue problem. There is a spending problem,” Hagerty’s flyer said. “The proposed property tax increase is from 16 cents to 59 cents, a proposed increase of almost four times. When created, it was promised that the new fire department would be a group of firefighters, that it would not become a bureaucracy like so many other government agencies.”
Hagerty said the spreadsheet prepared by Maness seven years ago, gave estimates of the revenue and expenses of the new department for the next five years.
“On the revenue side, we received tax revenue for the first year of $1.3 million, as predicted,” Hagerty said. “This year, it was nearly $2 million, an increase in funding of 42 percent in only five years. This was actually far above, far better than, the vice mayor’s projections. On the expense side, the department spent $2.6 million last year, rather than the projected $1.3 million as predicted by the vice mayor.”
Hagerty also said the department spent $1.9 million on payroll alone.
“If you take $1.9 million divided by 24 paid positions it equals $80,000 per person,” he said in the flyer. “That includes benefits, workman’s comp and more, which factors in a 41 percent add-on to salaries.”
He said the differences in firefighter ratings gave way to the various salaries throughout the department. Not everyone received $80,000. A firefighter 1’s salary tops out at $37,509, not including benefits. An engineer tops out at $51,813, not including benefits.
He also said the fire department bought four brand new fire trucks, “one at $800,000 is largely unused.” They also bought two “fully outfitted pickup trucks for part-time employees. The department has 11 vehicles and only eight people on duty at a time. [There is also] expensive equipment unused in a closet and now out of date.”
Hagerty’s solutions were to reduce spending and increase the sales tax that is paid by everyone, through a referendum.
A second town hall meeting will take place May 6 at 6:30 p.m. at Mt. Juliet City Hall, and Martin hopes more of the public will give their opinions.
Commissioners will vote on the 2019-20 budget in two meetings scheduled for May 13 and June 10.