By Patricia A. Scheyer
NKyTribune reporter
The specially called meeting of Ludlow city council Monday evening, barely a day before July 1, was fraught with contention, and ended with neither side of the argument satisfied.
The issue was the budget, which by Kentucky law has to be passed by council before the beginning of the fiscal year, which is today (July 1).
At meeting last week, on June 25, not one, but two first readings occurred, each approving a different budget for the city.
The first budget, the original budget, was drawn up by Mayor Sarah Thompson, with help from a consultant and council member Stephen Chapman Sr., since she has no City Administrator, and during the previous two meetings, council members had very significantly changed the numbers in the budget. Mayor Thompson vehemently disagreed with the changes.
Knowing that the second reading of one of the versions of the 2026-2027 budget had to be held on Monday evening, she sent out word of the changed budget over the weekend hoping to reach as many residents of Ludlow as possible to warn them of the altercations.
“Because the budget has not yet received its final reading, I believe it is important that the residents have the opportunity to understand the proposed changes before council takes its final vote,” she said in missives to local news organizations.
Apparently Council added approximately $360,000 to the Fire Department so they can hire three new full time EMT’s to the staff, while simultaneously subtracting funding for the lighting project on Hollingsworth Field from the budget to offset the new addition.
At the next meeting, Council members voted to approve $680,000 in additional cuts affecting administration, infrastructure, maintenance, economic development, public works, police technology, community events and other city initiatives.
The mayor led off the meeting Monday night, going to the podium and pleading for the original version of the budget to be passed, saying that this budget is not just a budget, it is a statement of who they are as a city.
“Tonight’s vote should be about the people, not about you, not about me,” she said. “It is about the taxpayers who trusted us with their money.”
Although several people attended the meeting, only three people stood up to comment.
Council member Chapman spoke up, defending the original budget, but saying that both of the budgets would work.
“The budget that I was for will work as well, even though at the end of the year, the expenses outweigh the revenues,” he said. “We were still over $2 million dollars with the carryover budget, not even mentioning the reserves. The last two years that we were audited we have been over, last year we were over budget $1.2 million dollars, the year before that $1.4 million dollars. I know years before that we were over budget. We have over spent. But a lot of the overspending didn’t even come clear to council because every time we looked at the general fund we were still over $2 million. We have had a $2 million general fund for quite a while. One thing we did lack was a rainy day fund and we really needed one. Now we have a $1.5 million rainy day fund. We could even add to that rainy day fund. We are still at a healthy balance. I think we could fund everything we want to do, all the upgrades to the city and everything else.”
He said the city has no large businesses so the tax burden is mainly on the residential, and he mentioned that the number of homestead homes are growing, to the tune of $3 million, which will be subtracted from assessments.
Council member Meagan Guthrie spoke next.
She said that there have been a lot of questions about the fund balance, and she said the actual fund balance is $3.9 million but $900,000 of that is assets, which can’t be touched. She said the rainy day fund should be 3-4 months of operating expenses. So for the proposed budget of $6 million, there should be $1.5 to $2 million in reserves.
She said last Wednesday night, before the last meeting on Thursday, council asked to have the requests from the fire department for three new EMT’s and Stryker equipment added to the budget. She explained that they had to make cuts to offset those additions, and she said the mayor had told council no. But Guthrie also added that they won’t know some of the revenue figures until the fall, so she proposed that since they will have a better idea of exact numbers in the fall, they could make a budget amendment in the fall like they did last November. She also said they may be looking at a new council next year.
“I do not want a new council to inherit a budget that has a deficit,” she said. “They are going to have their own priorities that they are going to want to see.”
One of the cuts that were made in the amended budget is $408,000 from the Administrative department, which Mayor Thompson said will require her to get rid of one employee, and since she is already down a city administrator, the mayor considered that cut too draconian. When Guthrie suggested that they could put some money back in an amendment, Thompson argued that the damage will already have been done, because the law will demand that the mayor execute the budget that is passed, not considering future amendments.
Thompson brought up cuts like $72,000 for the business district, $150,000 for repairs and maintenance and $63,000 in capital outlay projects. There was also a cut of $45,000 for a roof for the city building, which had already been approved in last year’s budget, and she brought up that there was at least one active leak in the building at the moment and others imminent. Thompson said insurance might not cover the cost of a new roof if the city knew all along that it had to be replaced, since it is 20 years old.
She said she really wants EMTs for the Fire Department but it is such a large amount of money she didn’t think council would approve it.
Guthrie said the roof is still in the budget, but Thompson told her they can’t go by line item.
“There is no money for the roof, we’ve cut anything additional that we can, we’ve wrung this lemon dry,” said Thompson. “I just described everything we’re losing, in addition to a full time staff member from administration. I think you’re looking at this like we are playing monopoly and we’re looking at amounts, and you can just lob off an amount, but it doesn’t work this way. That is not how city budgeting works. I agree that you would love to get expenses to be $10,000 under revenue, but what is the effect on this community? I propose that if you implement the budget as I gave to you, that in January, if it’s me, if it’s not me, I will make a promise to sit down with council and the community and departments, and come up with a five-year plan of how we want to spend money over the next five years. But today there are investments in this community that are needed.”
Guthrie said those are conversations that should be had anyway. She didn’t want to debate any further.
“I just don’t think the sky is falling,” she said. “I can’t, in good faith, vote for an unbalanced budget.”
“It is balanced!” Thompson insisted.
The two sides seemed far apart, and bitter.
Council member Julie Terry Navarre, who will run against Thompson in November, tried to see a compromise.
“I would really like for us at this point to not pass something tonight and for us to start over again and have conversations about ways we could make some of this work,” said Navarre. “I think we can have compromises that can make everybody feel good about where we are, and not touch so much of the reserve money. I would like to make that motion.”
She said she did not want to walk away having people feel like one side won and the other side lost. She said they all care about the city, so they should come together and compromise.
“I am not willing to cut fire, because I think public safety should be critical, and our aging population dictates that we have to have reliable staff available to take care of people,” she said. “I do want to do things for the business district, I do want to do things for the downtown area, but we have to come to some kind of compromise.”
Mayor Thompson acceded that she would be willing to take Hollingsworth field off the table, at $150.000, and that would make the money taken from reserves to be $200,000. She said she would add in the Stryker equipment, and the three EMT’s. But she said it would not be good to cut Administration so drastically and add to the Fire department so drastically because that would not be good for morale, having one department think they were passed over for another department.
Thompson said if they pass the original budget, they would meet again in a month and decide to fund a full year of EMT salaries.
For a moment it did look like they were making progress in negotiating, but it was not to be. Neither side trusted the other to pass a budget and then reconvene and give some money back that had been cut.
Thompson said what Guthrie is proposing, coming back this fall, and redistributing money to the Administrative department could not be accomplished because once the money is cut, Thompson cannot legally spend money to rehire if it isn’t budgeted.
Both Guthrie and Navarre said they could not in good faith vote for an unbalanced budget.
A motion was made to pass the original budget, but there was no second.
Another motion was made for the amended budget, but again there was no second.
Then a motion was made to table the issue of the budget and there was a second, and a unanimous vote.
In not passing a budget, the previous year’s budget would go forward and that would mean no raises for anyone on July 1. The city is also in violation of Kentucky law until they pass a budget.