Lexington Mayor Jim Newberry proposed a 20 percent rollback in the city garbage tax Tuesday, phased in over the next two years.
If the change is approved by the Urban County Council, property owners who get city trash collection would see a reduction in their property tax bill in October.
For a homeowner with a $150,000 house, the cut would be an estimated $24 the first year and another $24 the second year.
The reduction would affect the tax bills of 89,000 property owners. Residents who have private trash collection would not be affected.
The cuts would be possible because of several planned measures, some cost-saving, some income-producing, said Cheryl Taylor, commissioner of environmental quality. These include increased collection and sale of recycled material and more efficient collection routes.
Also, waste management has accumulated a surplus of $24 million, built up over several years, because it failed to invest in capital expenditures, and because of a high employee vacancy rate, said Brad Stone, administrative officer in the department of environmental quality.
There are 49 vacancies in waste management, or about 20 percent of its work force.
At a council work session Tuesday, Newberry said he was "very comfortable" with the first-year 10 percent tax reduction.
Phasing in the cut over two years will give the city time to implement several changes to save money in garbage collection, the mayor said.
These include introducing a computerized global tracking system to plan the most efficient routes for garbage trucks, which would save fuel, Taylor said.
The city also is moving toward a "single stream" garbage-collection system, so one truck can pick up garbage, yard waste and recyclables.
"That saves on man hours on the road, lower fuel costs and less maintenance because of fewer trucks," Bill O'Mara, acting director of finance and administration, said before the council work session.
Newberry said the council had little time to decide on the tax rate. From Aug. 5, when the state certified the county's property tax roll, the city has 45 days — or until Sept. 18 — to set the final rate.
While saying they supported tax cuts, several council members expressed reservations about Newberry's proposal.
Councilman Kevin Stinnett questioned how long waste management had maintained a multi-million dollar surplus and wondered whether people are being overtaxed. He asked Taylor to report on how much was accumulated each year.
Councilwoman Linda Gorton wanted to know how the city's proposed recycling center, if it is built, would be paid for. "I'm a little tiny bit uncomfortable" reducing the garbage tax until the cost of the center and the financing for it have been determined, she said.
Councilwoman Diane Lawless said she thought the $24 million had been saved specifically to build the new recycling center.
After the meeting, Taylor said the money had accumulated "for a number of years." Using it to build a new recycling center, with triple the current center's storage and processing capacity, is an option, she said. "But I don't know that it was saved for that purpose."
Taylor said her preference would be to use the surplus for operations and to replace aging equipment and float a bond issue for the recycling center.
The tax reduction will be discussed again at next Tuesday's work session.