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Ludlow Collects Big on Money It's Owed, Climbing Out of Financial Hole

The City of Ludlow's financial situation is improving rapidly, interim city administrator and Police Chief Scott Smith said.

In April, following the firing of city administrator Elishia Chamberlain by Mayor Josh Boone, it was announced that two public works employees were laid off, including the department manager, and that Campbell County Jail inmates would be used to offset the loss of that manpower. An administrative assistant was let go, and the city was unsure whether a police officer position would be filled in the fall when a current officer retires then as expected.

All major city projects, like its portion of Riverfront Commons, and employee perks, like mobile phones, were halted.

But in the more than two months since, the hole is not so large.

Smith said the city borrowed $136,000 to get through May, and was scheduled to take out $360,000 as a tax anticipation note, in which a bank floats a government until tax bills are paid later, in July. That second TAN won't be needed, he said.

Smith has been aggressive in collecting overdue franchise fees and delinquent taxes, some dating back years.

"As of two weeks ago, we collected over $600,000 of the franchise fees," Smith said. "Every bill we put out, we collected on. That was a huge deal for us."

The bills were sent to larger entities like Cincinnati Bell and Norfolk Southern, which had not been billed in years. "We could only go back five years legally," Smith explained.

"It's said the city lost out on that money previously, but it's a saving grace that we found it when we did," Smith said. 

Smith said when he took over as interim city administrator, he looked back ten years and started to work forward to find out what went right and what went wrong.

"I was able to discover where there was money being collected, and then it fell out, and then there was franchise fees again, but they weren't related to the ones we had collected," Smith said. "It dawned on me, why did we stop collecting this?"

"Nobody ever caught it."

He said the bank was happy to learn that the city would not be needing the additional TAN funds, though on Thursday evening, city council is expected to continue its current TAN when it adopts its 2019-20 budget.

Additional revenue has come in the form of $77,000 worth of delinquent property taxes and fees. "Those were over the last ten years that were discovered," Smith said.

Smith said there was about $630,000 in fees that were never collected, such as liens on properties. Realistically, he said, the city could likely collect about $188,000 more on the outstanding sum.

"I'm not expecting to collect that any time soon," he said.

Though the financial picture is brighter, Smith said the city will continue to operate tightly, without restarting the stalled projects or filling the vacated positions. "It would be irresponsible to start replacing people and to go back the way it was," he said. "We will stay the path for this year and see how the numbers play out."

The major debts the city faces includes $640,000 owed on its new train viewing station near the city building, its public works building, and the city building itself. "We'll just pay on them like any other debt because they are pretty large," Smith said.

The $4.1 million operating budget should have about half a million dollars on the plus-side when the new fiscal year ends next summer.

"There's a lot still in play with this," Smith cautioned. "We find that expenses and different things are popping up we didn't know about, and we're dealing with it, but all the major stuff is out of the way and we are in a very good place."

A big expenditure on the horizon is the complete rework of Adela Street, from Elm Street to Sleepy Hollow. The city will be responsible for 20 percent of that undetermined cost. The Kentucky Transportation Cabinet awarded a grant for the rest, but the city still has to pay the full amount up front and be reimbursed later.

"It really needs to be done," Smith said. "Nobody wants to live in the city where the streets are all torn up."

The city is also selling the building that houses the Ludlow History Museum, which will be relocating to the public works building. "Hopefully the museum and the rail viewing station can play off each other and bring more people in," Smith said. The building is being sold to a commercial interest, he said.

And the Ludlow Yards site is back in play, too. Last year, city council rejected a plan to construct a new apartment project across from the city building on Elm Street, but discussions have reopened, Smith said. "We are going to have a community forum so they can come in and hear about. We will keep it very transparent," Smith said.

"Right now, we do have some interested developers and some promising outlooks on that," he said.

The former Ernie's bar building is set to be redeveloped and the Zalla property on Elm Street has sold and Smith expects an apartment project near there soon, too, he said.

"There is a lot happening," he said.

Written by Michael Monks, editor & publisher

Photo: Scott Smith (RCN file)