The Danville City Council has once again adopted the budget and tax levy for the upcoming fiscal year on the same night in December, with the tax levy required to be turned in by the end of the month. But it was a hard road during Tuesday (Dec 17th) evening’s meeting getting to the $70 million budget on the agenda. Dominating the first half of the meeting were the gasoline tax increase; and the settlement with the municipal funds recovery firm the city hired that found the problem.
The gasoline tax will initially go up from around ten cents per gallon to around 14. It barely passed 7-6, with Mayor Rickey Williams, Jr casting the deciding vote. (“No” votes came from Michael O’Kane, James Poshard, Bob Iverson, Jon Cooper, Ed Butler, Vice-Mayor Tricia Teague.) Aldermen Heidi Wilson and Rick Strebing were not in attendance.
Alderman Mike O’Kane was able to pass an amendment to the gas tax increase beforehand, requiring it to be reviewed as an individual budget item every year. He was glad to see the amendment pass 7-5. He says with all the variables in gasoline prices, including changes in the state gasoline tax, it’s a good idea to just stop and take a closer look at something like this on an annual basis.
AUDIO: It changed over the years; and we had no supervision of it or no oversite of it. I think we need to keep the oversite for the future.
Prior to that was perhaps the moment that woke everyone up. After the Public Works Committee meeting last week, the Council was called into closed session. During Tuesday night’s meeting, it came out that the topic of that conversation was that Azavar; the fund recovery firm that found that the city could be charging more in gas tax; was threatening to sue the city if an agreement was not made on how the city would pay their bill for Azavar’s work. The city has agreed to pay $1.35 million, in various annual amounts, between now and 2029. The Council passed the agreement 8 to 4. (Michael O’Kane, Ed Butler, Jon Cooper, and Vice-Mayor Tricia Teague voted “no.”)
The city’s actual bill was much higher than that. Why? Because the contract with Azavar called for them to charge the city 45% of the amount of lost revenue that was found, EVEN IF THE CITY NEVER ACTUALLY SAW THE MONEY. Therefore, the revenue that Danville COULD HAVE RECEIVED if they had charged the full gasoline tax Azavar says they were allow to, was figured into the bill.
Alderman and Public Works Committee Chairman Michael Puhr says the decision for the city to sign the contract with Azavar back in 2019 to help the city find lost money is certainly now debatable.
AUDIO: Knowing what I know now, they did find us some money. (But) with that Motor Fuel Tax that we hadn’t charged, I don’t know how you can charge a percentage on something we never intended to collect. You know, it’s not worth going to court over to have that determined. It causes more legal fees, and everything else, and what we agreed to pay them as part of a settlement.
Ironically, some of the additional Motor Fuel Tax funds collected from the gasoline tax increase will now be used, between now and 2029, to pay off this settlement.
Mayor Rickey Williams, Jr repeated what he stated last week; in that with what Azavar did find to improve how the city was handling it’s revenue and finances; it should still pay off in the long run.
The budget itself passed 7-5 (“No” votes from Bob Iverson, Jon Cooper, Ed Butler, Michael O’Kane, and Vice-Mayor Tricia Teague.) The tax levy passed unanimously. The new fiscal year begins next May 1st.
