Residents express frustration
Residents expressed mounting frustrations about the financial and logistical hurdles surrounding the ongoing Marshall Fire rebuilding process during the public comment session at the Louisville City Council meeting Tuesday night.
Prior to the public comment section, the Council heard a Marshall Fire Recovery report summarizing the last six months of rebuilding efforts, the debris removal progress, the resource assistance programs, and plans for a first anniversary remembrance.
Most of the public comment session saw residents who lost homes in the fire seeking relief from the city use tax.
The city use tax is the equivalent to a sales tax on materials, and the tax is paid to the city upfront, as when taking out a permit, rather than at the point of sale. Construction items fall under those materials. In Louisville, the city use tax is a restrictive tax, meaning that it does not go into the general fund but is earmarked for other funds, the majority of which is a capital improvements fund.
“The way the use tax is levied and collected, and the restrictive nature of these revenues to specific funds, elimination or waving of the use tax really isn’t feasible,” interim City Manager Megan Davis explained. “Council could consider a rebate or grant program which would likely occur through the general fund in order to provide tax relief, if that’s what Council would like to do, and staff will work with Council to fund the best approach for implementing something of this nature.”
Darren Mckeen, who has lived in Louisville for 22 years, said funding for his daughter’s college education will be impacted by what he and his wife anticipate having to pay out of pocket, and the city use tax compounds on that burden.
“I’m not asking the city to rebuild our homes, we just need to get back on our feet,” said Mckeen. His home on Eldorado Lane is gone. “Before we can get back to having a house on our property again, we need to pay taxes on the materials. None of this was our fault, and it feels like you don’t have our backs on this.”
Mckeen and his wife found out after the fire destroyed their home that it was underinsured. The use tax, he contended, will impact his ability to support his daughters.
“When we refinanced in 2020, our insurance covered us at $140 a square foot, and now we have to pay at least $325 a square foot to rebuild a house that’s going to
be smaller than the one we added on to before.”
Other residents expressed frustration with the promises, hoops, and paperwork that felt endless and ever changing.
“I’m feeling like the bar keeps moving, and a lot of the rebates and programs are actually forcing us to pay more money upfront,” said Russell Moore. “Some folks can do that, and some folks can’t.”
Following the public comment, the Council had an open discussion.
“I don’t really have words at this point, to express how I feel about what you’re going through right now, and I just want to acknowledge the sadness and the trauma and the anger that I heard from each and every one of you tonight,” Councilor Kyle Brown said.
Brown encouraged the Council to set a goal of returning people to their homes as soon as possible and to find ways to do that. Brown summarized underinsurance and the use tax as the two major barriers he heard from residents.
Mayor Ashley Stolzmann weighed pros and cons of a fee waiver of a rebate program in an attempt to give structure to the direction of the forthcoming conversations for city staff and Council members as they head into a budget retreat on Thursday.
“It’s really important that whatever we do is sanctioned by the folks that were impacted by this,” Councilor Maxine Most said. “I just think we need to take direction from the community on this.”