Hillsboro City Council’s Finance Committee on Tuesday entertained discussion regarding the city joining Paint Creek Joint Fire/EMS District as a member or continuing to utilize its services on a contract basis.
As previously reported, council has heard two readings of a resolution to join Paint Creek for a seat on its operating board. Until now, the city has contracted with Paint Creek for fire and EMS services. Currently, the city pays for those services out of the General Fund.
If the city joins the fire district, a 5.5 mill property tax will be imposed to pay for membership, as is the case for townships that have joined the district. The increase in property tax would amount to about $170 per year for each $100,000 of valuation.
The resolution was set for a third reading at the February council meeting, but council did not take action.
Councilman and Council President Pro Tempore Justin Harsha last month placed the issue in the Finance Committee, where he serves as chairman.
Since four of the seven members of council took office for the first time in January, Harsha said he wanted to give new council members an opportunity to hear more about the issue.
The Finance Committee is made up of Harsha, new Councilwoman Mary Stanforth and returning Councilwoman Ann Morris. No action was taken at Tuesday’s meeting.
Also present Tuesday were new council members Wendy Culbreath and Brandon Leeth, as well as Safety and Service Director Mel McKenzie.
Discussion covered a variety of topics, mainly in regard to the city’s taxes and ideas for alternative funding methods.
Morris said the last tax put into place in Hillsboro was an income tax hike in 1986.
Prior to that, an income tax put in place in 1978 was 4/10 of one percent to support the Hillsboro life squad and other municipal expenses, according to Morris.
That tax was repealed in 1986, when a new tax was put in place totaling 1/2 of one percent, Morris said, and that revenue was earmarked for municipal operations, maintenance and equipment.
Morris said it’s “hard to run a city on an ‘86 budget,” adding that infrastructure improvements and replacements are sorely needed around town and there’s not enough money to pay for it.
Morris said members of the public who have said placing a property tax on Hillsboro residents would be a “double tax” are wrong, since the 1986 tax was not dedicated to fire and EMS.
Leeth said while the label on the tax may have changed, residents are still paying the tax.
After the meeting, Morris told The Times-Gazette that if the city joins Paint Creek and puts any kind of tax in place to pay for it, more General Fund dollars could be used to pay for street, sewer and water system improvements.
Culbreath asked what the advantage of joining Paint Creek would be, and Morris said if the city had a seat on the Paint Creek board, as all members do, it would have a say in Paint Creek’s decisions.
Harsha, who was recently named council liaison to Paint Creek, said he is “confident” the city won’t have an issue in that regard if it continues with a contract.
Harsha said he is in favor of pursuing a one-year contract with Paint Creek and revisiting the issue near the contract’s end. The city’s contract has been for roughly $570,000 per year, the equivalent of how much would be generated if the 5.5 mill poperty tax increase was imposed.
McKenzie said not having a fire and EMS levy is unusual for a city, and communities without such taxes often attract property buyers who want to own property but not necessarily live in or contribute to the area.
In a way, McKenzie said, having a low property tax rate is equivalent to “subsidizing landlords.”
Leeth and Stanforth argued that having a higher property tax rate would drive businesses and prospective property owners away.
Culbreath and her husband, Creed Culbreath, suggested placing a special fee on items that cause fires, such as cigarettes and propane, to offset the cost of the contract from the General Fund and free up cash for capital improvement.
Bill Fawley, the county auditor, has said previously that joining the fire district makes the property tax automatic. Fawley said Wednesday he had spoken to an attorney familiar with state law, who agreed that joining the district requires the imposition of the additional property tax.
Creed Culbreath said when property taxes were raised at Rocky Fork Lake, some local residents and property owners left because they couldn’t afford to pay the difference.
McKenzie, who used to work construction in South Carolina, said the county in which he worked made a substantial amount of revenue from a one-penny sales tax on all items, although he said that would be difficult to approve here.
McKenzie told The Times-Gazette on Wednesday it’s expected that council will decide one way or another on the Paint Creek matter at its regular meeting Monday.
As previously reported, the city and Paint Creek agreed on a temporary contract that will conclude at the end of March.
In terms of the contract negotiation, McKenzie said it may be possible for the city to continue the contract on a month-to-month basis until a more permanent agreement is met.
Reach David Wright at 937-402-2570, or on Twitter @DavidWrighter.