Leachville City Council rescinds mayor's veto

Thursday, April 14, 2005

The Leachville courtroom was packed with interested townspeople and guests when the city council met in regular session on Tuesday evening, April 5.

The council worked through a full agenda before discussing Mayor Ralph Wells' veto of the council's March 10 meeting, when five employees were laid off and one employe's hours were cut in half in an effort to cut expenses to meet past federal and state tax liabilities.

Updates on departments and reports from committees constituted the majority of the lengthy meeting.

Sandra Kennett, Leachville Industrial Development Committee treasurer, gave an indebted report of the committee's business dealings through the fiscal year 2004, which included a trial balance, balance sheet listing assets and liabilities, and journal list of all accounts (general ledger). Kennett distributed copies of the 11 page committee report to all council members and guests wishing to have a copy.

"Please review the LIDC financial report for the past year," Kennett said. "This is nothing new for us, as we have been doing this since 1985. I started with a simple ledger book when we met at the community center and elected officers and have been doing it ever since. We have our records audited every two or three years, do tax reports every year, and keep a notebook per year of transactions."

Kennett reviewed the report with the council and opened the floor for questions. Gilda Kay Hultquist was also on hand to answer questions and give details leading to the success of the committee, as well as the obligations and commitments incurred.

"The LIDC is not the governing body of the city, but rather a leg of the city," Hultquist said. "We are all volunteers and pay for our own expenses, phone calls, trips, out of our pockets. We believe in what we are doing and have come to know it has helped the city of Leachville grow."

Hultquist listed many businesses the LIDC has been instrumental in helping get started in Leachville.

The mayor and council thanked Kennett and Hultquist for their report, which will be helpful in establishing funds available for city use.

Tommy Spencer had requested to be on the agenda to speak to the council about city property but was not in attendance.

Roger Davis inquired about purchasing properties on the corner of 6th and Nelson, in order to build two houses. The council discussed passing an ordinance waiving competitive bidding, with consideration given to written offers received. The council requested that Davis present his offer in writing for consideration at the next council meeting.

The council discussed the already adopted city employee handbook, and City Attorney Mike Bearden addressed the issue.

"Personally, I'm against handbooks," Bearden said. "You can hire and fire for any reason and have to follow recourse. You can find yourself where you have applied it unfairly or can't afford to do what you have committed."

Council members expressed their opinions about the handbook and asked Bearden to review the current handbook to see if revisions or updates need to be made.

The council suspended the rules, declaring an emergency, and passed a new ordinance on the first, second, and final reading, reaffirming Ordinance 2002-2, passed Feb. 4, 2002. The 2002 ordinance raised water and sewer rates. The original document is missing, and the new ordinance will reaffirm it for city business purposes. The new ordinance is retroactive.

The council discussed garbage pickup and community free dumping.

"Free dumping is very expensive, and some thought has been given to having it done by local people," Wells said.

"We paid over $2,000 last year for dumping fees, which is what the landfill charges," said Ruth Ann Keith.

The council agreed to check into alternatives to current pickup. Eddie Bolar expressed his interest in doing the job, should the city decide to make changes.

Mayor Wells reviewed improvements made in the city, during the years the taxes were not paid. He listed improvements of $156,000 that were made during that time.

"We had no way of knowing that the money in the general fund was not available for making improvements to the park, ballpark and other business needs," Wells said. "We were thinking we had money to spend, and the council and I approved expenditures for city needs. All these things don't come free. We were having books audited and they did not even find that we were not paying our taxes."

"Tax consultant Frank Heath sent forms to Ruth Ann Keith to fill out, listing assets and liabilities, and expenses of the city," Bearden said. "So he can offer a compromise to pay the amount owed to the federal government, in a lump sum, in order to take care of all the tax liabilities for all those years. The paper work is done but has not been sent in yet. We can probably work out something for the state after solving the federal problem. We have to have all the documents up to date, to hopefully abate taxes. We will give priority to working out something with federal first."

Mayor Wells reviewed sales tax issue, designating 1/2 cent to water and sewer, and 1/2 cent to the general fund. He reviewed several areas of funding and groups and committees who had accounts.

"Some people think these little groups are separate groups but they all are a part of the city," Wells said. "General fund salaries are paid, heat and air is paid, rural fire fees are collected, and do not belong to them. These funds can all be used by the city if needed. We are not going out there to use these groups money, but rather as needed by the city."

"At one time an ordinance allowing the firemen a clothing allowance and rural fire money was placed in a discretionary fund to do what we needed to do with the fund," said Fire Chief Jesse Johnson. "We have worked hard for the money and we want to keep it. The ordinance has never been recended."

"If the IRS needs it, then I bet they get it," Wells said. "We will get through this. We have never had a sales tax, but we need one now."

Mayor Wells read his rights to veto and his reasons for vetoing action taken by the council during the March 10 meeting.

"On Jan. 15, 2005, we passed a city budget and they met a month later saying the city was broke and couldn't meet their payroll," Wells said. "That's terrible. There was $179,042 in funds available for the city.

"This has been hard on my family," Wells said. "If you override my veto it won't be a vote against me, but against the City of Leachville. I have been mayor for 23 years. My job is not city finances, but rather the day to day operations of the city."

The council unanimously voted to override Wells' veto.

"Are ya'll going to let people know about their jobs, as acting mayor?" Wells asked.

"No, Mayor," said councilman Sheila Spurlock. "That is your job."

Spurlock read a prepared statement listing the council's reason for overriding the mayor's veto.

"The council did not ask the mayor to call a special meeting on March 10, only to attend a called meeting," Spurlock said. "Playing politics or a power struggle was not the intent of this council. The operating budget approved on Jan. 11 did not include federal taxes owed. We cannot control our income, but can control our expenses. We cannot operate smoothly and efficiently if it (our money) runs on unknowns. We cannot operate efficiently if our payroll exceeds a reasonable amount and we cannot meet other obligations or debts without borrowing or cashing in CDs in order to make payroll."

"The layoffs were based on seniority and necessity of the position, not the person," Spurlock said. "The ability of those employees was not questioned. The cutbacks were done in the fairest way we know, two from each department. Our city, based on population, has been overstaffed for a long period of time.

"the meeting was not held in order to cause bad publicity for anyone or our city. These problems have been ongoing for several years and was brought to the attention of the public two years ago. It is time to settle this problem and pay the debt the best way we can, and layoffs are necessary due to overstaffing. The city needs to show an effort in resolving the tax debt, before the debt is passed on to our citizens.

"Changes are necessary in order to be able to move forward," Spurlock said. "The true secret of harmony is each of the council members wanting the city's will and not their own way."

"That sounds very good, but can you make it work?" Wells said. "They (council) are asking me to lay off these people. I'm only a part-time mayor."

"That is what supervisors are for," said councilman Bill Hetler.

"Can't we get help from the county?" asked alderman Anna Beth Thomas.

"That is hard to get," Bearden said.

The next regularly scheduled council meeting will be held at 7 p.m. May 2 at city hall.

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