A week after the possibility of a property tax increase came up, Loudon City Council approved the hike Monday during its regular monthly meeting.
The 6-cent increase will raise Loudon’s property tax to $1.2367 per $100 of assessed value.
“As far as voting for this tax increase, it has to do with funding for street repair, street paving and infrastructure work,” Tim Dixon, councilman, said. “That might even be earmarked for that only. We will not be able to take that money out as long as this council is here to be able to use for any other purpose. It will only go for what we have said it will go for.”
Councilman Tim Brewster raised the possibility of the increase during a May 13 workshop to cover the costs of paving.
He estimated an 8-cent hike would provide $216,000, which could pave 2.5 miles of city roads, while 12 cents would provide about $304,000 for 3.5 miles of paving.
Council settled on a 6-cent increase, which Ty Ross, city manager, said would be part of a $2 million paving budget for the 2019-20 fiscal year.
“There is new spending for infrastructure and paving,” Ross said. “The budget includes $2.6 million spending on infrastructure and equipment, 76 percent of which is for long overdue paving.”
The total new revenue from the tax increase is estimated at $160,000, which Ross said would be leveraged with about $800,000 in state grant aid and $400,000 from Loudon Utilities Board to funding the significant increase in paving spending.
The city also plans to pave the parking lot at Loudon Municipal Park, which is currently gravel.
While the first reading of the tax increase passed unanimously, Johnny James, councilman, said he hoped to repeal the increase prior to the next city election in 2022.
“I feel like most of the people I’ve talked to, they were for it, but the next question out of their mouth is, ‘What happens when all the infrastructure is done and the improvements are through? Will the tax stay on?’” James said. “Well, I don’t want it to stay on. When we’re through and we’ve done what we wanted to accomplish … then there’s no need to keep taxing you all.”
Council also passed the first reading of the city’s 2019-20 budget.
In addition to infrastructure spending, the budget included an additional public works employee, $75,000 for radio upgrades for the police and fire departments, an additional patrol officer for the police department, $100,000 for preliminary engineering and federal permitting for a riverwalk in downtown Loudon, a 2 percent salary increase for employees and a funding formula for the employee benefit plan.
“It took a long meeting on Wednesday, but I think we had some good feedback, some good ideas and I think we accomplished quite a bit with our budget as far as the funding goes,” Jeff Harris, mayor, said. “I think paving and maintenance and some of those things were priorities and I think we addressed those.”
In other business, council members:
• Approved a bid of $845,504.86 from APAC-Atlanta Inc., for paving of Blair Bend Drive.
• Approved on second reading the continuation of an interlocal agreement with Loudon County for planning department services.
• Approved on second reading an amendment to the 2018-19 fiscal year budget.
• Approved on second reading a comprehensive revision to the city’s personnel rules and regulations.
• Approved on first reading the designation of two handicap parking spots near the intersection of Grove and Wharf streets.