An ordinance enacted in the 1980s to collect fees from residents and businesses in Walnut Ridge to support the local fire department is likely illegal, and has been rescinded. Mayor Charles Snapp said residents can claim a refund for the fees.
Residents have been charged $3 per month on their water bills since 1987, according to records released. During that time, local businesses have been charged $2.50 per month, and industries have been charged anywhere from $10 to $30 per month. The fees are tantamount to a tax, and the city has been advised it is essentially a tax, and without a vote or consent from residents, it’s illegal, Snapp said.
“There’s no better time than right now to do the right thing … we need to do what’s right, and that is my intention,” the mayor said.
Doing the right thing may be costly for the city of about 5,000 residents. Reimbursements of this kind can only go back three years, meaning each resident and business that paid the fee can only be compensated for up to three years. That means a resident who paid the fee for all three years will get a check for $108, according to city info. If all residents and businesses seek a reimbursement, it will cost the city about $240,000.
The city has the money to pay for the reimbursements, but Snapp said money was being saved for a different purpose. Since he took office in 2015, Snapp has slashed spending with the city and has eliminated several top department jobs in order to save money. The result has been a nearly $350,000 savings on the city’s $2 million appropriated budget in 2015, alone, according to the city.
That money was going to be used in industrial recruitment, Snapp said. If an industry wanted to build on the outskirts of town where no water or sewer pipes extended, the money would pay for that type of project. It would have saved the city from going through the bonding process, or finding the funds from somewhere else, he said.
Many residents have told city officials they do not plan to seek a reimbursement. Social media sites have been abuzz with many saying the amount of money is minimal, and the secondary costs to citizens could be dramatic.
The fee placed $80,000 per year in the fire department’s coffers, or about 18% of its total budget, according to the city. The city enjoys a relatively low ISO rating of 3. The rating is based upon how well the fire department functions, water pressure, and other intangibles that insurance companies consider when setting home owner insurance rates in an area.
Without the money, the ISO rating might rise if the department loses personnel, equipment, or other cutbacks have to be made, Snapp said. Someone might gain a dime in the short-term, but it will cost them a dollar in the long run, he said.
If enough residents don’t seek a reimbursement, the city may still be able to move forward with its industrial recruitment plans, unaffected. The city council will consider a measure later this month to make the fee voluntary, meaning residents will have to agree to it, and there has been a lot of support for that, Snapp said.
The alternative is not so popular. Aldermen could enact a 5-mill property tax hike to cover the loss of revenue, the mayor said. No one wants to do that, but fire protection and safety cannot be compromised, and the city has done a good job in the last year and half recruiting job creators to Lawrence County’s hub city, he said.
“We’re making a lot of progress … we can’t stop now,” Snapp said.