Nola Sizemore

Staff Writer

After a lengthy discussion and a vote of 4-2, members of the Lynch City Council recently adopted and imposed a new license fee ordinance for insurance companies engaging in the business of insurance within the corporate limits of the city. The license fee rate was set at 8 percent, and includes collections of insurance for casualty, automobile, inland marine, fire and allied perils, health and life.

Several council members questioned if the new fee will cost residents any more money.

“Does this come down to now the insurance companies can raise your insurance rates?” asked council woman Betty Hudack. “Can the insurance companies now say, well your insurance is going up to cover this 8 percent fee?”

Mayor Johnny Adams said the fee is not being imposed on residents and they will not receive a bill in the mail. He said the fee will be collected by the insurance commission and then a check will be mailed to the city. He went on to say the city is now collecting only $17,000 per year in property taxes, which he contributed to a lot of the residents being eligible to claim the homestead exemption from property tax because of their ages, and this new revenue is badly needed for the city.

“I just don’t know any other way of generating more revenue,” said Adams. “We’ve went from five maintenance workers to three. During the winter months we have big KU bills coming in. You have chemicals needed for the city — which have gone up and our revenue is staying flat. As far as taxes, you’re probably paying less in Lynch than anywhere else in the country.”

City Clerk Erica Eldridge said according to the insurance commission, 8 percent is the maximum amount the city can set for the license fee. She said she was told even though the 8 percent is approved by the council, that may not be the amount allowed by the commission.

“We’re going to have to do something to generate revenue or else we’ll lose our little city,” said council woman Linda Adams.

Councilman Winston Yeary asked how much the city will generate from the newly imposed fee.

“Cumberland told me they are generating approximately $8,000 per quarter from this same fee,” said Adams. “Of course, Cumberland is a bigger city than we are. I just want to keep our city going. If we combine with another city this fee will still be there. I’d love to see my children and grandchildren stay here and live in Lynch. I don’t want to lose our little city and this is one way we can help save it.”

After a roll call vote, councilman Terry Lewis and Hudack voted no for imposing the Insurance License Fee Ordinance.

Reach Nola Sizemore at 606-573-4510 or at nsizemore@civitasmedia.com