JELLICO (WATE) - Jellico leaders are speaking out about the budget delay in the town that prompted a warning from the state. The city faces a state takeover if leaders can't pass a budget soon.
The state comptroller sent a letter to the Board of Mayor and Aldermen more than a week ago, noting that the city had not passed a budget and not addressed its, "serious financial situation."
In the small town of 2,500 residents, times are tough; revenues are projected to be short $160,000 in the next budget cycle.
Next year's budget would mean cuts to the library, parks, and fire department.
Council members are faced with approving a 50 cent property tax increase just to balance the budget.
"There's been a long-standing process, because of the dwindling property tax, the wholesale beer revenue. It's just a culmination of years of neglect and addressing the process" said Jellico Mayor Les Stiers.
The city has battled financial problems before this year.
In October 2012, workers couldn't get their paychecks because officials said there was no money to pay them.
City employee worker compensation and city liability insurance had lapsed until recently.
The city's liability insurance policy expired on December 31, 2012, and wasn't renewed until May 2013. The city went five months without insurance.
"With the way things are going, it couldn't be any worse," said Carolyn Leach.
Leach calls herself a citizen advocate, saying she informs the residents about every council meeting she attends.
Leach is also is part of 16 person ouster suit against Mayor Stiers. The case is supposed to heard in Campbell County Chancery court in July.
"He's just done what he wanted to do. The council can vote for something and he overrides it," said Leach of the mayor.
"It's just a total disregard for the council, it's just my way or the highway," said Jellico Councilman Alvin Evans.
Evans says the mayor purchased an old church to use a community center for $196,000 in 2012.
Council approved a resolution to seek financing for the building, but not approval for the actual purchase of the building.
The move caught the eye of the comptroller's office last spring. On May 31, 2012, the office sent a letter to the city asking them to fix the problem.
"He went and did a line of credit through the city and bought it. Well, the comptrollers caught it, and said no, you have to get permission through us," said Evans.
He says spending like this part of the budget problem, though the mayor points the finger back at his council members.
"For two years, we have needed revenue and this council has refused to address the revenue aspect," Stiers said.
The final approval of the budget will be during a special call city council meeting on July 1 at noon.
If council members don't pass the budget then, the state comptroller's office will pass its own.
The city's vice mayor Venita Johnson told 6 News the city would be better off if the state took over.
6 News also heard from the comptroller's office Tuesday.
A spokesperson says the office has been working with Jellico leaders and the Municipal Technical Assistance Service to address the city's financial issues.
The comptroller's office has not seen Jellico's final budget.