Benham City Council held a special-called meeting on Wednesday to deal with the fallout after the Internal Revenue Service placed liens and garnishments on some of the city’s accounts.
A previous report states the council learned in September that $38,000 in taxes had not been paid, and the IRS was looking into possible misappropriation of funds. The city has been dealing with the issue since that time, attempting to work out a plan to satisfy the IRS.
City Clerk Jessica Smith updated the panel on the situation, saying she had received a notice of liens on Friday.
“What happened was I got a call from Scott Sherman (a representative of BB&T) on Monday or Tuesday. There’s copies of each of the four accounts that you’ll see a note on them levy/lien/garnishment IRS,” said Smith.
Smith said the accounts impacted included the depreciation fund (bond payment for sewer plant), the coal severance account and the water deposits account.
“We had been struggling for a long time,” said Smith. “It had progressively gotten worse in the last little bit, people are paying a little slower and there’s been a lot of people to move out.”
Smith said the city was just about to make a payment on the past due taxes when the IRS wiped out the accounts where the funds were located.
According to Smith, the city is attempting to work with the IRS to help resolve the issue.
Smith informed the panel of a few measures that had been suggested to help with the financial predicament, including cost-cutting measures, collecting overdue property taxes and instituting a temporary water rate increase.
“We’re going to have to do something to raise funds, because we have to pay the people that work here,” said council member David Kidwell.
After some discussion, the council decided to pursue a temporary increase on the city’s water and sewage rate.
“Either we pitch in together as a town, or just be gone,” said Kidwell.
Though all council members voiced regret at the decision, a motion to approve a temporary rate increase in water and sewer rates of 6.34 for a period of three months passed without objection. The council plans to re-evaluate the rate when the three months expires.
No further action was taken by council at this time.
In other council activity, the council accepted the resignation of Benham City Fire Chief Tyler Cornett.
Joe P. Asher may be reached at 606-573-4510, ext. 1161 or on Twitter #joe_hde