Note: This story was last updated at 10:05 a.m. July 28.
There will be a $3.50 increase in the monthly trash fee, and more money—$260,000—will be reserved for capital projects such as buildings and schools, while city officials are not expected to change the new property tax rate provided by the state after five-year reappraisals completed this year.
The trash fee will increase from $7 to $10.50 per month. That change is expected to provide another $335,000 per year in revenue.
The new tax rate—state officials call it a tax-neutral rate—is $2.52 per $100 of assessed value. It was approved in the first of two readings by the Oak Ridge City Council during a three-hour special meeting on Monday. The second reading hasn’t been scheduled yet, but the meeting is expected soon.
The new tax-neutral rate is up 13 cents from the previous $2.39. That’s because overall property assessments went down in Anderson and Roane counties. The tax-neutral rate is designed to bring in the same amount of revenue after a five-year reappraisal as before, so when total property assessments go down, the rate goes up.
The Oak Ridge City Council can make changes to the tax-neutral rate by raising it or lowering it. But a proposal to reduce the tax rate to $2.50 failed on Monday.
Oak Ridge has proved to be the exception among some local cities and counties that have either raised their tax rates or approved budgets that anticipate tax increases above the change in the tax-neutral rate. Among those that have approved increases or approved budgets that anticipate them are Anderson and Roane counties, and Clinton, Oliver Springs, and Rocky Top.
The budget that passed Monday includes 2 percent pay raises for Oak Ridge municipal staff members. It’s meant to provide enough money for 2 percent pay raises for Oak Ridge Schools teachers and staff—rather than the 3 percent they requested—but it’s not clear yet how the municipal budget passed Monday will affect the schools. The Oak Ridge Board of Education, which has already proposed dipping into its fund balance, will meet on Monday, August 3.
“I think what you see here is good collaboration between the city and schools,” Oak Ridge Schools Superintendent Bruce Borchers said. He said educators appreciate the roughly $325,000 increase in the amount transferred from the city to the schools, which totaled about $14.9 million.
The schools had initially requested the equivalent of a seven-cent tax rate increase, and the municipal staff had requested a one-cent increase, or eight cents total.
But the budget proposal discussed and considered by City Council last week and this week included some revisions by Oak Ridge City Manager Mark Watson and some new revenues, including from the anticipated tax rate increases in Anderson and Roane counties. Among the changes: adding $220,000 in growth during the past five years; removing $100,000 for storm water funding; and reducing the amount for educator raises from 3 percent to 2 percent, shaving about $325,000 from anticipated expenses.
In another significant change, the 10-cent tax rate increase approved by the Anderson County Commission on July 20 is expected to generate another $423,000 for Oak Ridge Schools.
The new revenues of about $115,000 from the anticipated 30-cent tax rate increase in Roane County are expected to be about a “wash” because of an expected decrease of $120,000 based on actual receipts from fiscal year 2015, said Karen Gagliano, Oak Ridge Schools director of business and support services.
Watson had initially proposed a $1 increase in the trash fee starting in November as city officials begin transitioning to a user fee system for garbage pickup. It’s now heavily subsidized by the city’s general fund, which city officials say is unusual. The extra $1 was expected to generate another $95,000.
But Oak Ridge City Council member Rick Chinn proposed doubling the trash fee, raising it from $7 to $14. He said $7 of the service is now being subsidized by the city’s general fund, where it affects the property tax rate.
“Let the users pay for the trash pickup,” said Chinn, who advocated for lowering the tax rate to $2.50. “We are compared daily to our competitors. Make it a user fee.”
But after further discussion, Chinn and four other City Council members voted for the smaller $3.50 increase in the trash fee. Joining Chinn in voting in favor of it were Oak Ridge Mayor Warren Gooch and City Council members Kelly Callison, Charlie Hensley, and Chuck Hope.
Voting “no” were Mayor Pro Tem Ellen Smith and City Council member Trina Baughn.
Smith had objected to the larger proposed $7 increase, saying it would be an unexpected burden on the lowest-income residents and she didn’t want to increase the fee all at once, especially without notice, while Baughn said it was taking more money from residents.
In a subsequent motion, Chinn then tried to reduce general fund spending by $335,000—equal to the amount of new revenues provided by the higher trash pickup fee—but that proposal failed.
Baughn and Chinn voted in favor, but other Council members voted “no.”
Those who did not want to reduce general fund spending said there are some unmet capital project needs, including in the schools and city, with several citing roads as an example.
“We need to keep up with some things that we’ve deferred over the years,” Smith said.
A motion by Baughn to reduce money for expenses related to the Oak Ridge Chamber of Commerce from $175,000 to $90,000 failed because it did not get a second. Another motion by Baughn to cut the city manager’s budget by $85,000, the equivalent of one penny on the tax rate, also failed.
Baughn also proposed reducing the amount transferred from the city to the schools to about $14.6 million, the same amount as in the fiscal year that ended June 30. Voting in favor were Baughn, Chinn, and Smith. The others voted “no.”
The motion by Smith to appropriate $260,000 to the capital fund to accommodate projects like those Council had been discussing passed 5-2. The two “no” votes came from Baughn and Chinn.
Baughn and Chinn also cast the only two votes in favor of reducing the tax rate to $2.50. Chinn said that rate was revenue-neutral, and Baughn has said taxpayers are “getting squeezed from all sides.”
But other Council members had expressed concern about reducing the rate below the tax-neutral rate recommended by the state. They said they were worried about doing anything that could have a negative impact on the tax increment financing, or TIF, for Main Street Oak Ridge, the redevelopment of the former Oak Ridge Mall. A TIF relies on new property tax revenues generated at a site to help cover public infrastructure costs.
Voting in favor of adopting the $2.52 tax-neutral rate provided by the state were Callison, Gooch, Hensley, Hope, and Smith. Baughn and Chinn voted “no.”
Hensley had said he would favor an even higher rate for more money for roads.
Each penny on the tax rate generates about $85,000. Chinn said a one-cent decrease in the tax rate might not mean much to a small home owner, but it would mean a lot to commercial property owners who own many properties.
“I’m not just talking about myself,” Chinn said.
Monday’s special meeting was actually a set of special meetings, one to approve the city’s budget on second and final reading and the other to adopt the tax rate on first reading.
More information will be added as it becomes available.
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Dave Smith says
This article is a succinct, fair and accurate reporting of the council meeting deliberations, by my recollection. Nice job.
Thank you, Dave.
Philip W Nipper says
I don’t have a big problem with the increase in the refuse collection fee other to point out that in March of 2009 the fee was raised from $5.00 a month to $7.00 a month to cover the costs associated with the new and improved recycle collection service. The increase as I understood it then was to help with the cost of the new brown wheeled bins and the associated electronic weight measuring system/software on the trucks to register the amount of recyclables each household was generating. This went hand in hand with the recycle bank program where households earned points for coupons and discounts at area stores, etc. Not sure exactly how long that program was in operation, but it went away after a period of time. However, we continued to be charged the extra $2.00 a month for a program that was and is no longer was in operation. I want my $2.00!! With that being said, I was not aware that the refuse fees do not cover the entire cost of the refuse contract and that it has to be subsidized via monies from property taxes. Not sure that really makes good sense. Maybe the contract needs to be re-negotiated. Maybe we need to change from “back door” pickup to curb pick up like most communities. City utility fees that routinely increase more frequently than other communities is probably not a good tactic for increasing our population and improving upon our reputation.
As I recall from the contract negotiations at the time and based on what Ellen Smith said last week, city officials think we have a good deal on the current trash pickup contract. At a work session last week, Smith said Oak Ridge is paying $14 per resident for weekly pickup, including for back-door pickup and recycling. She said other communities are paying more for less service. We have a good deal, Smith said, and re-opening the contract negotiations “doesn’t look like a good deal.”
I’ll try to get more information on what happened to the RecycleBank program and whether there is an additional cost for back door pickup service.
Philip W Nipper says
Thanks John, additional real data regarding the refuse program would be most welcomed.
Philip, I wasn’t able to get in touch with Gary Cinder of Public Works today, but I’ll try again later this week.
Joseph Lee says
Baughn failed to get a second on both of her attacks on the Chamber of Commerce and the City Manager. Maybe there is hope for this council and city. Note to council: If you don’t second her stuff she will not be in a position to burn your meetings to the ground. Every minute counts too.
Jason Allison says
Will the increase mean I’ll stop having to call because they failed to get my trash because I didn’t drag it to the curb?
Mark Caldwell says
Maybe it’s time we all place our garbage on the street. I’d imagine that would decrease costs considerably.
Philip and Mark,
I did recently talk to Public Works Director Gary Cinder about the trash pickup contract. He reiterated that city officials think we have a good deal on the current contract. We are currently paying $14 per month per resident, including the portion subsidized by the general fund. That includes recycling and back door pickup, which is usually very expensive and labor-intensive. It’s my understanding that Oak Ridgers are not paying a premium for this service.
“It’s a sweet deal,” Cinder said of the current contract, which was renegotiated in late 2008 or early 2009, had a few extensions, and now runs through 2021.
In comparison, Cinder said he’s heard residents in other communities pay $15 per month for just curbside trash pickup, for example. And a Waste Management bid 20 years ago in Oak Ridge would have charged $35 per month for citywide backdoor pickup.
I have more information on the recycling program also if you’re interested.
Philip W Nipper says
Thanks for your diligence John on this story and the others as well. Next maybe you could look into the asphalt issues we seem to have in town. Manhattan Ave and Raleigh Rd are two roads that come to mind. Thanks again!