Matt Lasley | GC News-Gazette The Leitchfield City Council meets in regular session on Tuesday.

Matt Lasley | GC News-Gazette

The Leitchfield City Council meets in regular session on Tuesday.

Despite passing a city budget with no property tax increase earlier this year, the Leitchfield City Council on Monday voted to move forward with raising the rate following a lower-than-expected 2019 property values assessment.

According to Leitchfield Finance Officer Kim Sowders, last year saw the value of properties in Leitchfield increase by about $5 million over the previous year.

When finalizing the city's budget for Fiscal Year 2019-2020, the newest property values assessment had not yet been completed, so city officials budgeted the city's tax rate based on last year's assessment.

However, after receiving this year's assessment, it was determined that the real property valuation in Leitchfield had increased by only $559,000, rather than the estimated $5 million. According to Sowders, the city then had to re-evaluate its property tax rate because, without an increase, property tax revenues would increase by only $1,011 over last year.

With a 4 percent increase in tax revenue, on the other hand, Sowders said, the city can earn an additional $44,759 in revenue from this year's property taxes.

She said that, with the city's many projects on the horizon, such as the move to the former Rite Aid building, she recommended the city take the 4 percent revenue increase.

Leitchfield City Councilman Kelly Stevenson, who served on the city's budget committee this year, said that the city was anticipating assessed values being higher when the committee opted not to budget a tax increase and, for that reason, he recommends the increase to ensure the city does not fall behind financially.

The 4 percent increase in tax revenue would raise the city's real property tax rate from 13.3 cents per $100 of assessed value to 14.5 cents per $100 of assessed value and result in $388,535 in revenue. The 4 percent increase in tax revenue would also raise the city's personal property tax rate from 17.61 cents per $100 of assessed value to 17.96 cents per $100 of assessed value and result in $140,073 in revenue. The motor vehicle rate will remain the same at 12 cents per $100 of assessed value.

Stevenson said this increase, for the average household, would equate to the cost of a pack of cigarettes on a tax bill.

City Councilman Billy Dallas echoed Stevenson's sentiment, saying that, while no one wants to see taxes raised, the city's surplus funds have fallen significantly, from around $7 million at the start of the year to around $3.8 million currently.

Dallas added that, at some point, the city will have to offset its losses by raising its tax rates.

"If you're going to succeed, you have to," he said.

City Councilman Raymond "Tooty" Cottrell noted that other governing bodies, such as the Grayson County School Board, increase their tax rates every year, and the city will have to make up the money it is spending.

Leitchfield Mayor Rick Embry, after the council's discussion, then entertained a motion to move forward with the property tax rates that would result in a 4 percent increase in city revenue, and the motion passed on a five-to-one vote with only City Councilman Clayton Miller voting against it.

Following the vote, the city held the first reading of the 2019 Property Tax Rate ordinance with the increase. A public hearing on the tax rates, as well as the second and final reading of the 2019 Leitchfield Property Tax ordinance will be held on Thursday, Sept. 26 at 4 p.m.

In other business, the city council:

*Voted, on Embry's recommendation, to approve a $2 per hour raise for one city employee and $2.50 per hour raises for two other city employees. City Councilman Harold Miller suggested that, in the future, the city may want to look into setting a pay scale, so city employees know exactly how much they will make during their career.

*Voted to finance the Leitchfield Fire Department's new fire truck on five annual payments of $29,535.07, following an initial down payment of $133,375, at a 3.39 percent interest rate. The truck will be financed entirely through Leitchfield's county fire dues revenue.

*Voted to give Jeremy Woosley authority to spend up to $200,000 on bids for the new softball concession stand.

*Entered into executive session to discuss pending litigation, but no decision was made nor action taken.