Middlesboro Mayor Bill Kelley sent a budget message to the city council near the end of June pertaining to his budget proposal. The goal of the budget, to provide services as planned to the city for the entire year without exceeding the funds available.

“There are no significant changes proposed to goals or administration regarding the budget,” said Kelley in the budget message. “In most areas, appropriation levels have been relatively unchanged. Some budget items have either increased or decreased for reason such as vendor rate changes or anticipated usage. Salaries in each department were calculated based on current or planned employment levels.”

One small change Kelley proposed in his message was a 2.5 percent pay increase for city employees. The money for the increase will come from a bond paid off last year pertaining to the State Retirement System.

“I am proposing that the funds freed up be given to the employees in the form of a pay increase,” he said. “Regrettably, this will be a small increase…but I believe the employees deserve any raise we can provide, since it has been several years since they received a pay increase.”

The budget provides full employment, continuation of employee benefits including health insurance and the purchase of vehicles and equipment.

The budget also showcases the city’s continued support of the main street program. Kelley proposed the full funding of the main street director’s position, along with appropriations for building condemnation and removal and funding of downtown revitalization programs.

“The budget funds another year of the main street director salary. We will continue to work with this organization in their efforts to revitalize our downtown area,” said Kelley. “The 50 percent increase in funding for condemned house disposal originally proposed four years ago has been retained this year.”

With this being the final budget message for Kelley, who was defeated in the primary election, the mayor issued a warning of potential dark times to come.

“While I am proud that this administration managed to make it through the last seven years without any tax increases or service cutbacks, I am deeply concerned that these warnings (of revenue shortfall) have fallen on deaf ears,” said Kelley in is budget message. “In the preparation of this budget, we are finding it increasingly obvious that hard times are near. Retirement costs are just one example of the rising expenses we face.

“Health insurance has also been a problem – along with utilities, fuel and the fact that our employee’s pay rates are not keeping pace with inflation. The problem remained the same, a stagnant revenue stream. We are by no means unique. As I write this, every small city in the state is facing the same problems we are. There are very few options allowed by Statute for cities to gather new revenues.”

Kelley said in spite of the gloomy outlook, there are still positive aspects of the current situation.

“Revenues are remaining steady with slight growth in some categories, and we should be able to provide the same level of service this year,” said the mayor. “We have maintained a very good collection rate. This is important because focusing on strict enforcement of collection procedures ensures that no taxpayer is forced to pay more than his or her fair share.”

The city has several sources of revenue included direct taxation, licensing fees, collections from enterprise funds (sewer, ambulance and sanitation) along with other governmental sources such as Municipal Road Aid and Local Government Economic Assistance Funds.