Fayette County

Lexington council votes to table proposed increase in franchise fees

Lexington's Urban County Council, in an 8-7 vote Thursday, tabled a motion until August to increase franchise fees on utilities by 1 percent.

The fee increase had been on the docket for second reading, meaning if it had been approved, it would have taken effect immediately.

Council member Ed Lane said the increase would impact every residence and business in Fayette County.

Council member Bill Farmer said he hated to raise these fees "before we absolutely have to." He moved that the proposed increase be postponed until the August meeting of the council's Budget and Finance Committee, when the city's fund balance will be discussed.

Part of the revenue was to be transferred to supplement the street light fund, which has run at a deficit for several years. Currently, installation and maintenance of street lights is funded through a property tax assessment, which has not been sufficient to cover the costs.

Farmer said it's possible street lights could be paid for without raising the franchise fee.

The increase was included in Mayor Jim Gray's proposed 2014 budget and was projected to bring in approximately $4 million to the city.

"Our estimate is it will affect the average household by $1 to $2 a month," said finance commissioner Bill O'Mara.

Voting to table the motion were Jennifer Scutchfield, Ed Lane, Bill Farmer, Chuck Ellinger, George Myers, Julian Beard, Kevin Stinnett and Jennifer Mossotti.

Opposed were Harry Clarke, Peggy Henson, Chris Ford, Linda Gorton, Steve Kay, Diane Lawless and Shevawn Akers.

The council and the administration had been near the end of deliberations on the mayor's proposed 2014 budget, but the council's vote to table the franchise fee increase apparently leaves a $4 million hole to be plugged. A budget has to be approved by the end of the fiscal year on June 30.

The city is required by law to have a balanced budget.

Vice Mayor Linda Gorton asked the administration to bring a proposal on how to deal with the situation to a budget meeting council scheduled for 9 a.m. Tuesday.

Gray called the vote to table "a precipitous decision. It clearly illustrates a divided council with a vote of 8 to 7."

Raising the franchise fee, "It was the last thing we suggested we needed to do," he said. "It's very likely some very significant investments, and a lot of pain may occur as a result of this vote today."

Council member Peggy Henson asked the administration for information on alternative ways to fund the street light fund if the franchise fee is not increased.