The council voted Thursday 4-2, with council members Bill Grant and Sandy McGrew in favor, to shoot down the 3 percent excise tax, after opponents spoke out against the measure, calling it unfair.
Councilmen Glen Cummins and John Rust, who have been allies of the mayor, voted against the measure, which was struck down by the last council in 2012, when the mayor also brought it forward. Cummins, who is acting city manager, and Rust still had lingering questions about the tax.
Hobgood says he was taken aback after the vote, but the issue isn’t over.
“I still support it very strongly,” the mayor said in an interview. “In fact, I’m going to have it on the agenda again for the next meeting for further discussion.”
The mayor maintains the tax, which would not have taken effect until fiscal 2014, would be a positive in the long run for the city by raising money for the Canton Main Street program and other city sponsored agencies that work toward economic development.
Councilman Hooky Huffman said he was opposed because an Enterprise Rent-A-Car location was the only car rental company in town, and the tax would, in effect, be targeting one business.
“We’ve got a new competitor coming in for them and that’s Hertz. But I will not count them,” Huffman told the council. “They haven’t proven to me, after coming in at least three times, that they are permanent. Believe me, I am for Main Street.”
Angie Wiggins, area manager of the Canton Enterprise location, told the council the tax would be an increase for Canton residents.
“In our home city location, most of our renters and our customers are local Canton residents,” Wiggins said. “We want to contribute to Canton. However, I’m not for continuing to raise taxes on the citizens of Canton, which is basically what the tax will do.”
Wiggins said the average increase on customers would be $1 per day. Hobgood said that isn’t significant.
“It’s a user fee. If you don’t use it, you don’t pay for it,” he said. “A dollar a day onto a rental? I can’t imagine there being a lot of kick about that, particularly for the good it’s going to do for economic development.”
Pat Gold, president of the Main Street board, told the council Thursday the tax would help her program and wasn’t significant.
“Those customers will barely notice it, if at all,” she said, adding that several car dealers in town also rent cars. “If the car rental agencies don’t want to pass the tax on to their customers, I think the fair thing to do would be to absorb it themselves out of their, I’m sure, nice profits.”
Councilman Bill Grant, who voted for the tax along with Sandy McGrew, was a longtime member of the Main Street board and told the council the program is underfunded. McGrew said she polled residents and most weren’t opposed to the tax.
Councilman Jack Goodwin told the council Main Street should raise funds in other ways.
“Main Street does a great job and they do some super events and they can raise a lot of money,” he said. “I think we’ve got good citizens. We ought to reward them by keeping all the taxes and all the fees as low as we can.”
Hobgood knows it’s a hot-button issue, but he maintains the tax is worth it.
“If I have a business, I’d probably be opposed to it too. But in the long run, I think the economic development aspect of it and the good that it could do will actually enhance their business down the road,” he said. “There’ll be more people (in Canton).”
Another hot button
During the meeting Thursday night, Hobgood also differed with the council on a $234,000 contract with Engineering Strategies Inc. for construction management on renovations to the city’s waste water treatment plant.
The council voted unanimously to authorize the mayor to sign the contract, though Hobgood said he had a problem with some language in the document.
Within the contract, Hobgood said ESI would be allowed to make changes to the designs for the renovations, which the city paid another firm to draw up. He argued that could lead to “too many cooks in the kitchen,” and said if there were problems with the facility in the end, neither the designer nor the construction manager would have to take ownership of the failures and could just start finger-pointing.
The mayor also said he hadn’t yet been able to thoroughly read the agreement.
Cummins assured him there had been very few changes since the draft Hobgood had previously read. And Cummins had no problem with allowing ESI to make changes.
“It says they can’t make them without our approval,” he told the mayor.
“Who is ‘our’?” Hobgood shot back at the acting city manager.
Cummins said it could be the mayor, the city manager or the council and that could be decided at some point.
“I just don’t see anything wrong with this,” Cummins said of the contract. “This gives us total flexibility.”
“Unfortunately though, I’m the one that has to sign this thing and I’ve got a problem right now,” he said, saying he simply wouldn’t sign the document if he wasn’t comfortable.
Cummins seemed to be OK with Hobgood not executing the contract.
“Mr. Mayor, I think signing is a matter of formality,” he said.
“It matters to me,” Hobgood responded.
During the meeting, the council also:
• Voted unanimously to commit $20,000 a year for three years to the Cherokee Office of Economic Development beginning in fiscal 2015;
• Voted 5-1 — with Huffman against — to reduce the city’s storm water fees by 35 percent; and
• Unanimously approved doing away with the city’s fire district ordinance.