Walker County Residents May Face Special Levy To Deal With Erlanger Debt, Penny SPLOST Transportation Tax On Top Of 2 Mil Property Tax Rise

Thursday, August 17, 2017
Commissioner Shannon Whitfield outlines budget woes
Commissioner Shannon Whitfield outlines budget woes

Walker County, Ga., residents may face a special levy to deal with the Erlanger Health System debt as well as a new penny SPLOST transportation tax - on top of a planned two mil property tax rise. The two mil would equal to $80 on a $100,000 home.

Sole Commissioner Shannon Whitfield said all of that is to take care of mountains of debt he said he inherited from the Bebe Heiskell administration.

Commissioner Whitfield held a two-and-a-half-hour session at the Walker County Library In LaFayette as the first of five public meetings on the property tax increase he announced earlier.

The commissioner said a special debt levy for a specified time is one option for paying the almost $10 million the county now owes to Erlanger over the Hutcheson Hospital debacle. One figure mentioned was $133 per year per parcel owned. Several of those at the meeting indicated they would be supportive of the county moving forward to deal with the hospital debt, with the federal court consistently ruling in favor of Erlanger. The commissioner said he does not plan any more litigation or appeals on the issue, saying that cost the county several hundred thousand dollars.

Commissioner Whitfield said the penny transportation SPLOST sales tax proposal will be on the ballot in November. He said it would bring in some $3 million, including $2.5 million for the county that would be earmarked for road projects, mowing, ditch cleaning, etc.

He said Walker County has $1 million in the bank that came from the state and another $1 million coming in December for road paving. However, he said the money cannot be used until Walker County comes up with a 30 percent match. He said $600,000 is needed, and he does not want to borrow that money.

On the property tax rise, he said "We are seeing a shrinking tax digest" and, even with the $2 million in new revenue it will bring, Walker County is still looking at major cuts to break even. 

He said the Heiskell administration spent $30.3 million two years before he came into office and $26 million the last year. He said he has made some $2 million in cuts, including having 25 fewer people in departments under him. 

Commissioner Whitfield said he has spent less than $20 million this fiscal year, but the final numbers are likely to be around $24 million. He said all the requests of county departments and elected officials total almost $27 million for the next year.

He said, "We've got to work with the department heads and the elected officials to cut about $4 million (from the requested almost $27 million) by Oct. 1."

Commissioner Whitfield said he has held three meetings with Erlanger CEO Kevin Spiegel and been told that the hospital wants to begin to be paid what it is owed. He said, "I am trying to work out some sort of a payment plan, but that is not going too good." He said Erlanger wants to get paid at a rate of $1 million a quarter.

The commissioner said he learned that Ms. Heiskell signed documents calling for, in the event of a default, a property tax millage rise of up to seven mils to cover the debt. He said Erlanger could go to court to force the execution of that promise. Under that scenario, he said, county property taxes would almost double over a period of about two years.

Commissioner Whitfield said the landfill and Mountain Cove Farm property have been losing over $1 million a year. He said he is working to erase that debt, and he said a public safety charge will cover the costs for fire and ambulance service - not the general fund as before. He said Mountain Cove Farm is worth from $6 million to $7 million, but has a lien against it of $15.3 million.

He said the county is paying $1 million per year related to county bonds and has that obligation for 19 more years. He said an official of the bonding company told him a requirement had to be put in that the money had to be put in escrow in January when tax receipts were being received, though it was not due until October (to make sure money was still there in October to pay it). He said the bonding official said the company had not had to take that approach anywhere else. "We had a laugh over that," he said.

He said the Heiskell administration spent money on industrial parks instead of paving roads and mortgaged not only Mountain Cove Farm, but the Civic Center and the Agricultural Center. 

Asked if he had found anything that was done illegally by the prior administration, he said, "I've not seen or found anything, but I've been looking."

Asked if the county should declare bankruptcy, he said, "I would love to, but it's against the law in Georgia."

He said a wheel tax is also not an option under current law.

The commissioner said the county may start issuing business licenses to bring in about $200,000.

He said the budget does include debt service payments for money owed other than Erlanger, but he said it would take about 20 years to pay them off at the current rate. And he said other needs are out there - including fixing leaky roofs on five county buildings.

Commissioner Whitfield said he wanted to make the county's finances completely transparent. He said the entire budget will be posted on the county website. He said the prior administration only held the minimum three public budget meetings "and one was at midnight."

He said previously there was no budget detail other than "a magical three-page sheet" that summed it all up.

He said the county's fiscal woes were pointed out (in technical jargon) in prior audits, but he said he and others failed to pay any attention to them.

The budget he inherited had a $7.5 million deficit, he said. In the first few weeks he said he had to start borrowing money from the Bank of LaFayette to clear up a pile of bills. He said there were notices that utilities would be cut off at county offices.

He said, because the county did not match state road paving money, it lost out on enough funds to pave over 150 miles of roads. He said, "When I saw that I thought I was going to be sick."

He said take-home cars have been curbed. He drives his own personal vehicle.

One citizen said those on fixed incomes need the option of a payment plan. He was told under state law that the only thing available is to make payments in October, November and December.

Another person at the meeting said the tax increases "will affect people who are struggling."

One man in the crowd said, "A lot of people are on fixed incomes. This is going to put a hurt on them."

Commissioner Whitfield said he is already "taking a beating on social media," and he said some are talking about a recall. But he said the problem is "inherited" and he said it is "all of our problem."








Fire Chief Blake Hodge and Commissioner Whitfield
Fire Chief Blake Hodge and Commissioner Whitfield

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