The Cherokee Village City Council hosted a crowded council room and much discussion for the April 21 meeting. The main discussion, regarding the establishment of a franchise fee, brought on a lot of interaction among both council members and the audience. The franchise fee, along with passing an ordinance to get a one percent sales tax put on the ballot for a special election, both came up for debate. These two items were presented in response to last week's Financial Task Force meeting, where the city discussed budget shortfalls and a variety of options to cut the budget.
Prior to the meeting's start, Alderman Tom Thone questioned the franchise fee and sales tax being on the agenda, asking whether this was the way the city planned to address budget concerns.
A 4.5 percent franchise fee was proposed to be added to the city water bill and implemented at the end of July. Thone was adamant that the city needed to explore other options before raising taxes, including reducing spending. The council eventually passed the ordinance, reading it by title only the second and third time. Thune was the only council member to vote "No" to the franchise fee. The Mayor said the franchise fee will bring in $30,000 to $40,000 annually.
The one percent sales tax also drew a lot of discussion among the audience and council. Thone first asked council, in reference to the last meeting when a specified percentage rate was not discussed, "Why one percent? There has to be some sort of logic, not just pick a number." He also asked how much revenue the tax would generate and was told by the mayor it would be around $50,000 a year. The special election will cost the city between $2,100 and $2,800.
Resident Dave Gruger then spoke to council asking about if the tax would also be on top of the franchise fee, making residents pay taxes on the 4.5 percent franchise fee as well as on other utility bills, making them higher overall.
He said "Slapping a tax on everything is going to keep businesses from coming into the area." The mayor assured him the issue is something the city is putting before the people and they will have the right to vote on it.
Lastly, Steve Thompson spoke to the council about the budget shortfalls. Thompson is a financial advisor who owns a local business and is also a resident of Cherokee Village. He explained that the reason the city's financial records from last year look good was primarily because of reimbursements from FEMA for disasters in 2009 and 2010.
He also said the council voted to spend $87,000 on a building for a farmers market, while the number one need is a reliable and responsible medical system. "You need to prioritize," he said.
Another suggestion was an Advertising &Promotion tax as a means for increasing revenue.
Thompson said, "Lynn Maxedon came to the Cherokee Village Business Association and presented the A & P and we were unanimously against it. We asked you to try to be conservative and I don't think spending $87,000 is wise. We need to think of cutting and being conservative. We look to you, as a group, as leaders. I respectfully submit that you as a council have turned a deaf ear on us."
The mayor responded, "You have to see both sides. We plan to utilize the building as a shelter also to help those in the community in times of need."
Council voted to put the tax on the ballot as a first vote.
Council must vote twice more to get the sales tax on the ballot in a special election.