05/14/2026
5/7 Regular Meeting Notes:
***Joyce Absent***
Meeting Minutes from April 16th (Attached) Special & Regular - Amanda Motioned to approve. Red Seconded, All Yes.
We then went into a water and sewer rate discussion for city customers. Specifically 4 different "categories" of city water and sewer customers- City Residential, City Commercial, Outside City Residential, Outside City Commercial. If you live within the city limits, you would fall within City Residential. There are about 200 customers that are non city residential, most of which are on reservoir hill, south of town (Cardinal Ridge IS within city limits - the map gets a bit weird south of town). 5 businesses that are outside city limits. We will be restructuring our rates to resemble close to what Mayor Mason D. Taylor did in Butler in 2023. The city residents especially has took the brunt of the impact of rate increases to keep the water and sewer departments barely in the black because of the lack of wholesale increases and the mishandling of making the sewer plant as a true regional plant, leaving the city to hold the bill. The water department has barely broken even, while the sewer department has largely been bailed out by electric. This "robbing Peter to pay Paul" must stop and the primary way to stop it is to adjust rates accordingly, but also fairly. *****This means my push is to see a 0% city resident rate increase for the 2026-2027 fiscal year*****, and a small-to-none increase for the 3 years after that. Instead, the rate increases would be passed to city commercial, as a comparatively small increase, numbers to be determined over the course of the next few weeks. I will share numbers once we have settled.
Outside city customers will see the sharpest increase, upwards of 6% to 10% the first year and then 25% per year for the next 3 years after that. This could see the outside city residents paying upwards of DOUBLE of what the city residents pay per 1k gallons of water. To avoid this, if the outside city residents can allow their properties/neighborhoods to be annexed- this will drop their rates back down to the city residential rates.
Again, these numbers are just speculation, but as always I will keep you informed as things happen. Ideally this will be settled before July 1st as the new rates would be key in the new fiscal year's budget. But if that can not happen we may have to assume the rates will stay the same, pass the rate restructure, and then amend the budget.
I'll go on to explain more in my ordinance write up, but you may wonder "man why do they need to increase everything?" The city government has 2 funding "buckets" General Fund and Utility Fund. These funds can not cross-fund. General Funds pay for Police, Fire, City Governmental operations (Mayor, Council, City Attorney, duties of the City Clerk outside of utilities, parks, etc.), Streets Sidewalks. Utility Funds pay for utility maintenance and infrastructure (Water plant, sewer plant, water mains, sewer mains, pump stations, hydrants, electric poles, wiring, etc.). So the ordinance I will discuss later takes care of the first bucket. The water/sewer rate increase discussion would help take care of the utility side. Mayor Sabrina Hazen was telling us during the meeting that the primary goal is to increase the sewer revenue by about $300k per year to have that department in a better spot it is in today, which then can help alleviate the strain on electricity and water to then those funds can be properly rolled back into those utilities. Everyone can agree that the infrastructure needs help, this is how it can be helped to right the ship. If the electrical grid was sold (completely separate conversation for another day). The revenue stream that is keeping the utilities afloat would completely disappear. So before we could even consider that we have to get the water and sewer rates fixed first.
Audit Services - We received one response (Attached). Mayor Sabrina Hazen will be following up on price as it was a bit of sticker shock. We were used to paying closer to 12k for an audit with Paul Maddox, this firm was coming in at around 30k. Paul will also assist and see if he can find any other resources or bites on auditing resources. Attorney Doan also informed us there is some changing state legislation with regards to audits so this may change in the future, but would still be applicable this fiscal year.
Ordinance 2026:01 Second Reading of the Occupational/Income Tax. Mr Moreland asked Council and the Mayor several questions about how the city residents were informed of this possible tax. If you are here on this page, then I believe you would not be surprised by my eventual answer of how we've been keeping the citizens as informed as we realistically could short of bothering every person at home by knocking on their door. He asked if the ordinance was posted in the The Falmouth Outlook, which is a valid question however something I did not realize until just a couple months ago that every ordinance is required by Kentucky law to be posted in the local newspaper after it passes, before it can take effect. The outlook does not do this for free. It costs the city several hundred dollars to publish an ordinance in the paper, the more pages to publish the more it will cost. Posting every ordinance before it has been voted on is not a fiscally wise move, because if enough changes occur after the first reading, a first reading must occur again with the changes. Posting these summaries and documents on Facebook is free. All my posts and photos are public, you do not need a facebook account to view this, so it can be shared or accessed anywhere you have internet. Councilman Stephen Gales Jr. then mentioned that he had talked to several city residents who were not happy about the potential tax but understood why it was needed. I made a motion to pass the Ordinance, Amanda Seconded, Rollcall vote Joyce: Absent, Amanda: Yes, Me: Yes, Craig: No, Councilman Stephen Gales Jr.: No, Steve Jenkins: Yes. Ordinance PASSED 3-2.
My "Yes" votes boils down to the fact that the city has limited avenues to obtain funding on the General budget side. The usual way is Property Taxes. The state of Kentucky allows for cities to increase property tax rates 4% year over year as a simple ordinance change. The city could try to increase it more than 4% but then that opens up the door for the citizens to petition the change, add it to the next election ballot, and overturn the increase, rolling it back to the previous tax rate before the proposed increase, and the city does not get a re-do the next year for 8% to catch up, they are still capped at 4%. During our city leader training it was suggested to always go for the 4%. The city has historically been known to NOT take the 4% leading to our general fund revenue to flounder. Because we can not play the catch-up game here we must look to other more stable revenue streams. Occupational taxes is the primary one that is allowed. There are 3 types: Payroll tax, Net Profits Tax, and Gross Receipts (revenue) Tax. The city chose to implement 2 of the 3. You may wonder what the difference between the gross receipts tax is and the occupational license fee based on gross receipts. The Occupational License is a pre-business fee to be granted the privilege to do business within the city limits. The first year any business would pay the $50 as their revenue within the city would be unknown at that time. Each year after based on their tax forms for the net profits tax, their license renewal fee would increase based on how much revenue they generated from the previous year. This will make it more fair that Dollar General, CVS, other large corporate owned businesses would pay a higher license fee than say, the Mystery Box or Smoking Pig. If it were a tax, it would be a percentage and be payable after business is performed, the license is payable before business can be performed or continue to be performed. The Business Net Profit Tax (1%) is a wildcard as it's currently unknown how much this will bring the city in revenue as we have no data to compare against like we could with payroll with the county payroll tax. This is based on NET profits so if a business is not doing well, their tax burden will be much less than a business bringing in substantial profits. Finally the payroll tax- 1.5% We know from the county figures at 1% they bring in about $180k, so 1.5% should bring the city about $270k which can then be turned straight into repaving a couple streets per year, replacing some needed sidewalk sections, things long neglected because there was no money to do it. We are listening to your desires, this is us laying the first steps to make that happen and set up future councils to be in a better spot financially than we were given.
Ordinance 2026:02 First Reading (Attached) - Proposed current budget amendment to get us through the end of fiscal year, I went into more detail in a previous set of notes. https://www.facebook.com/share/p/1J3X9RkMuX/
Resolution 05:07:26-1 (Attached) Wholesale rate increase- I attached an UPDATED wholesale rate study. It was found a sewer project was incorrectly classified fully into the water rates which inflated the wholesale rate. The new rate was $3.28 / 1k gallons which is still an increase over the current rate. The districts stated they will not be appealing this increase. Once we get the Scripps loan finalized we will be doing a supplemental rate study and increase the wholesale rate again later this year. Amanda Motioned, I seconded, All Yes.
Resolution 05:07:26-2 (Attached) Accepting road aid in the amount of about $42k. This is not the funds that Mark Hart Secured for us, but in addition to. Amanda Motioned. Councilman Stephen Gales Jr. Seconded, All Yes.
Resolution 05:07:26-3 (Attached) Appointing Jo An Cordray to the Code Enforcement board for a 3 year term. Amanda Motioned, Steve Jenkins Seconded, All Yes.
Resolution 05:07:26-4 (Attached) Appointing David Huck to a 2 year term to the Code Enforcement board. Councilman Stephen Gales Jr. Motioned, I seconded, All Yes.
Resolution 05:07:26-5 (Attached) Appointing Carolyn Reid to the Code Enforcement Board for a 1 year term. I motioned, Councilman Stephen Gales Jr. Seconded All Yes.
Resolution 05:06:26-6 (Attached) Appointing Stella Hayes to a 3 year term as an alternative member of the code enforcement board. Amanda Motioned, Councilman Stephen Gales Jr. Seconded, All Yes.
Side note here- All board positions on all city boards are UNPAID. The board requires 3 members to meet, we can have 2 alternatives appointed, Stella is one of them, we have an opening for one more alternative. This gives more flexibility for the board to meet when needed.
Resolution 05:06:26-7 (https://www.facebook.com/share/p/1EwwK2bKvd/) Accepting the "Lease" (Loan) agreement for the Scripps loan, which will be used for some water/sewer projects. This was a part of the requirements to receive their grant as well. The loan will be for $1.175m, with an interest rate of 2.25% and a lease term of 20 years- 40 semi-annual payments. The grant will be in the amount of $965k. So between the two the city will receive an injection of over $2m to put into utility infrastructure. Amanda Motioned, Councilman Stephen Gales Jr. Seconded, All Yes.
Proclamation 05.07.26 (Attached) - National Treatment Court Month. A proclamation does not require council approval. Mayor Sabrina Hazen read the proclamation declaring Treatment Court Month be established during the month of May.
Mayor Sabrina Hazen asked me if I could be the city representative at the NKADD June 2nd public forum, I accepted. More on that in the next couple weeks!
We then discussed Employee Health Insurance Plans. The employees have very good health insurance with a $250 deductible and the premium being fully paid by the city. We will stick with the current plan. There's not really a tangible benefit to changing, and the employees - at least Megan, the city clerk - seems very happy with it as-is.
Ordinance Committee report out covered in the water/sewer rates notes above.
Safety Committee - Councilman Stephen Gales Jr. reported on they talked over the PD status with Chief Hart and Assistant Chief Timon. Their budget wish was $770k, which is down from last year, and a more reasonable number. Prioritizing low to no OT. Use what we have for as much coverage as possible. No one from the Fire Department was able to attend, but they will meet with them later.
Public Comments - David Huck spoke about the disappointment for the city to retire it's K9 officer already. Mayor Sabrina Hazen as well as assistant chief Timon empathized with with David but explained how it was the only logical, allowable, and correct choice as the dog was not being utilized to her full potential, was increasing the costs of the PD by way of trainings and other needs, and the trainers would not accept her as a return to be reused at another department or re-train her with another officer.
Next Meeting: We will NOT have our next regular meeting on the 21st as Mayor Sabrina Hazen will be out of town that day. It will be called as a Special Meeting for May 28th, 7PM.
