Covington commission resists property tax increase, still undecided on salary increases, public safety

By Greg Paeth
NKyTribune Contributor

The Covington City Commission may wind up raising property taxes and parking rates and establishing more paid parking in the MainStrasse neighborhood as the city tries to find another $800,000 to pay for more police officers and firefighters and a modest raise for other city employees.

A proposal presented to the commission Tuesday night by City Manager Larry Klein calls for the city to use money from seven different sources to pay the salaries of five firefighters and four police officers just one month into the new budget year.

That $800,000 target includes about $149,000 that would be used to give non-union employees a three percent raise, their first since Jan. 1 of last year, Klein said.

Although a nearly four-hour meeting ended without any final decisions on funding for salaries for any of the city employees, it seems that the commission has little appetite for a special property tax for public safety that would have to be voted on in November by city residents.

The deadline to submit a tax increase question for the ballot is next Tuesday and no one on the commission emerged Tuesday as a staunch supporter of a referendum.

Commissioners Steve Frank and Jordan Huizenga both seemed to favor the idea of a city-wide vote. “I like the idea. I don’t think it hurts to ask them (the voters) what they want,” Frank said at one point.

“I’m not going to approve a tax increase of any kind,” said Huizenga, adding that “…letting the voters decide is a novel idea.”

But neither commissioner pushed for a property tax showdown at the polls.

“The voters elected us to make these decisions,” said Commissioner Chuck Eilerman, who made it clear that he’s against deciding tax questions at the polls.

Huizenga said the city can’t tax its way – or cut its way (cut expenses) – out of its budget problems. “The only way we can get out of this situation is to grow our way out of it,” he said.

Commissioner Bill Wells made it clear that he supported raises for the non-union employees.

Because the tax question was on the agenda for a first reading Tuesday, it could – in theory — be submitted to the Kenton County Clerk for the November ballot, according to Assistant City Manager Frank Warnock.

“It’s an option, but I sense some reluctance,” Warnock said.

Besides the special property tax, there was also discussion Tuesday about raising the city’s existing property tax enough to produce an additional four percent of revenue – about $200,000 – in tax bills that would be payable next month.

The city’s current tax rate is about $3.045 for every $1,000 of assessed valuation or about $304.50 a year for the owner of a home valued at $100,000. Klein had said tax bills on that $100,000 home would increase by about $12 if the city attempts to collect four percent more than it did last year, when property taxes produced revenues of about $6.8 million.

Klein said the staff has not yet calculated the new tax rate, which would have to be approved by the commission.

Frank emphasized that a small percentage of the city’s $47 million budget comes from property taxes that are paid by homeowners. Both he and Klein said that upwards of 80 percent of the city’s tax revenue comes from businesses, especially from the city’s payroll tax, which is expected to produce just over $22 million for the city treasury this year.

Other sources to come up with the $800,000 are raising the parking meter fees from 35 cents to 55 cents for a half hour, which should produce an additional $100,000 per year, and increasing the monthly charge at city parking garages by $5 per month, which could raise $41,000, according to Klein’s proposal.

Klein said a detailed plan to increase paid parking in the MainStrasse neighborhood would be presented next Tuesday. The proposal calls for the installation of some parking meters in a neighborhood where many of the city’s bars and restaurants are clustered. The plan also calls for more tightly monitored paid parking in two city lots.

Other money would come from a reserve account, an expected carryover balance from the last budget year, and the re-allocation of some of the revenue from the tax on insurance policy premiums, according to the plan Klein presented.

One major unknown at this time is whether the city will receive all or part of a $360,000 grant that the city applied for from the Federal Emergency Management Agency. If approved as submitted, the SAFER (Staffing for Adequate Fire and Emergency Response) would cover the salaries of five additional firefighters and nearly half of the $800,000 that the city needs for personnel.

Fire chief Dan Mathew said some departments have received word about the grants. Covington has heard nothing at this point, Mathew said.