Calling it a “dire emergency situation” Cumberland Mayor Carolyn Elliott attended a special called meeting of the Harlan Fiscal Court on Thursday asking for a $33,000 short term loan to pay an annual bond payment to the U.S. Department of Agriculture/Rural Water.
“The city has a water bond, which has gone up from $125,000 to $135,000 this year. I ask why it was going up and they told me that’s just the way bonds work,” said Elliott.
“We’ve had this bond since the 1960s and we have paid $35,000 to $40,000, I don’t have the exact figures with me, on it. As you know, it was a terrible winter this past year and we had to put out all kinds of money on supplies, fixing broken lines, replacing 60 meters, and that might not sound like a lot but it is to a city. Revenue has gone down, tax base has gone down, everything has gone down and prices go up.
“Therefore, we’re at the point now we owe $99,000. I went to the bank and the bank will not lend you any money unless you have money.Well, if I had money I wouldn’t go to the bank. So, I’m asking you all for a loan for $33,000 so we can pay this bond payment. We have to pay it by Aug. 31 or we’re going to lose all federal funding — it cuts off.”
Elliott said she was only asking for a short term loan until November when the city’s tax revenue begins coming in.
“The county collects our taxes, so you will be guaranteed your money,” said Elliott. “Last year I think we took in by the first of November $86,000. So, you know we’re going to get at least $33,000 in. You will have your money back by then.”
Magistrate David Kennedy added he attended a recent council meeting and the council held a first reading to assess an additional tax on each water bill both inside and outside the city limits.
“This is going to increase their revenue,” said Kennedy.
When asked why she wasn’t prepared for this large bill by Magistrate Delbert Stephens, Elliott said she “thought she had 90 days.”
“If you lose your federal funding you might as well forget it,” said Elliott. “This is the situation I’m in and it’s a dire emergency situation.”
Kennedy said the county is suffering from coal mining job losses, but the Tri-City area has “suffered more than any other section of the county.”
“If we don’t step up and help them (the city of Cumberland) now, it’s going to cost the county from now on, because it’s all going to come back on the county,” said Kennedy.
Magistrates unanimously agreed to loan the money to the city of Cumberland after a short-term contract is prepared by the county attorney and signed by both parties.
“It’s hard to sit here and agree to this, because everybody owes us for interest on the FEMA grant,” said Magistrate Jim Roddy.
Elliott, who said she has only been mayor of Cumberland for the past year, responded by saying she “didn’t know she had to pay the county back.”
Stephens then asked Elliott how she plans to operate the city with the loss of tax revenue to pay this loan back, to which she said she hopes the proposed additional tax on the water services will fill that gap.
Kennedy added he feels the cities of Cumberland, Benham and Lynch need to merge their water and sewer systems, along with their police departments, “in order to survive.”
“It’s going to have to happen,” said Elliott. “I realize that. You are talking to the preacher to the choir. What people need to know when you merge your water and sewer, and things, you are still responsible for it in your city. You’re not going to totally lose it — it will be just one system.”
Lynch Mayor John Adams, who was also in attendance at the meeting, agreed with Elliott and Kennedy, saying he is for merging services.
“We’ve just got one entity in the middle that won’t agree,” said Adams.
In other action, the court approved:
• Application for the 2015 Litter Abatement Grant Funding;
• An Energy and Environment Cabinet 2013-2014 Recycling Grant Fund check in the amount of $4,000;
• The 2014-2015 Waste Tire Grant in the amount of $4,000;
• Accepted the Harlan County Sheriff’s Office’s 2013 tax settlement for standard tax, gas tax, 2012 and 2013 oil tax, limestone, sand and gravel tax, franchise tax, telecommunications tax, additional tax, bank shares and unmined coal tax;
• paying bills and add-ons and budget transfers.
Nola Sizemore may be reached at 606-573-4510 or on Twitter @Nola_hde