Mayor Brad Cole proposed the privatization and sale of Carbondale’s water treatment, water distribution and sewage services at the City Council meeting Tuesday as one of many suggestions to alleviate the city’s projected $5.8 million deficit for fiscal years 2011 and 2012.
The proposal would immediately grant the city $42 million, which would be used to completely restore the depleted fire and police pension funds and repay city debts, Cole said.
Other Illinois cities, such as Cairo, Champaign and Peoria, have privatized their water and sewage services as well, Cole said.
Cole said he would expect water rates for the consumer base to increase under his suggestion, and said it was simply one of many he asked the council to consider.
Other options discussed at length by the council, which were also part of Cole’s list, included increasing the city’s sales tax rate and levying a city property tax for the first time in seven years.
Councilman Steven Haynes said a property tax levy would put the burden on one portion of the citizenry.
Carbondale’s sales tax rate is one of the lowest in the region and can be raised without consequence, Haynes said.
The city’s sales tax rate is 7.75 percent. The rates in nearby Herrin and Marion are at 8.5 percent.
Councilman Chris Wissmann said he also prefers a sales tax increase.
“We all have to live somewhere, (but) we all don’t have to spend money,” Wissmann said. “Sales tax increases do encourage people to save.”
The only advantage to a property tax levy over a sales tax increase is that it would provide an incentive for landlords who own unoccupied properties to find tenants, Wissmann said.
Corene McDaniel was the only Council member to vocally support the property tax levy.
McDaniel said people are shopping in different ways, and the sales tax may not work.
“As long as they have Internet shopping, people can stay at home (and) go online or pick up the phone, buy and not worry about taxes,” she said.
Councilman Lance Jack said he supports the sales tax increase as long as the city commits to bringing in and expanding businesses.
Carbondale needs to have a high-profile downtown area and attract residents and visitors, such as Cape Girardeau, Mo., or Paducah, Ky., Jack said.
“It’s a self-feeding cycle,” he said. “The more businesses and the greater variety of businesses we have in town, the more people will see Carbondale as a destination.”
Privatization of services such as water, sewage and refuse collection could potentially allow the city to decrease the sales tax to 7.05 percent, Cole said.
DeSoto resident Tony Rushing, who works for Carbondale’s water and sewer department, said he would be in favor of the sales tax increase but sees no gain in privatization of public works.
“I understand times are tough for everybody, but in my opinion, public works — water and sewer and everything else — is the heartbeat of the city,” Rushing said.
Cole said hiring of released city employees could be a condition of a private contract.
“It may be that none of the options are desirable, but something must be done,” he said.“The elected City Council would be derelict if they did not at least review them.”
No official decisions were made Tuesday. The Council is expected to either levy or abate the city property tax at its Dec. 15 meeting.
Nick Johnson can be reached at nickj39@siu.edu or 536-3311 ext. 263
