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Last night the East Point City Council voted to keep the current utility rate in place indefinitely. The utility base rate is currently $47.80 and until last night was scheduled to increase to $66.85 on July 1, 2012. The City has been using a subsidy to keep the rate down to $47.80 since the middle of last year. This subsidy was intended to help ease the needed rate of $66.85 through a 2-year phased increase. The subsidy will expire on July 1, 2012 in which the utility will need to make up $2M.
This vote goes against the recommendations from the Staff in the Utility Department, the Interim City Manager and countless outside recommendations. Council voted to stop the planned increase without the endorsement of any industry professional. According to current proposals, removing the planned increase the City of East Point will result in the following:
- Cutting of the Sidewalk Program
- Cutting the Enhanced/Improved Street Sweeping Program
- Not enough funding for Equipment Maintenance
- Potential shortfall in funds for required chemicals in our water treatment facilities
- Only $1M available for the Utilities Emergency Fund (which is not enough for a city of our physical size and aging infrastructure)
Previous to this evening’s vote the East Point City Council already made the following changes.
- Removed the Franchise Fee paid by the Utility Department to the General Fund to help support Capital Improvements that benefit the Utility Department
- Removed the Indirect Costs paid by the Utility Department to the General Fund to help offset the Utility Departments shared costs of citywide services. These services include Human Resources, Janitorial, Internet, Phone Services, etc. Now the City General Fund will be responsible for paying these Utility related expenses without any compensation from the Utility Department.
All of these changes have been made by Mayor Pittman and City Council as a way to “stop the Utility from subsidizing the General Fund”. Let’s be clear, according to page 37 of last year’s budget, the Utility Department had a loss of $420,421.
At the end of the day, here’s a more upbeat outlook on what happened. Prior to this evening’s vote all Council did was rearrange some numbers on the budget, they didn’t do anything that actually set the city back. Even last night, by Council voting to not change anything now is a win. Up until Council Member Cook’s motion last evening, Council was set to lower the current utility rate. Now, the utility rate remains the same and therefore remains in balance. It is clear that Council is hearing the outcry from the residents and trying to find a way to work themselves out of a bad position.
In the coming months the City Council will need to develop a 2013 Budget which will start on July 1, 2012. During that discussion we will see if the above programs are put on the chopping block, and see if the new Council can balance the budget without the $2M subsidy paying for today’s Utility Rate. It’s completely possible that City Council will be able to balance the budget without exceeding the current property tax cap of 15 Mils. No one I have spoke to is concerned about increasing from 13.75 Mils to 15 Mils, the concern is entirely focused around the removal of the cap from the City Charter. I for one hope that Council is successful in keeping the current Utility Rate, current level of services and current property tax cap. If that is achieved everyone can say they won.
Rest assured, Your Guy for That, Dustin Drabot will keep you up to date on all the developments surrounding the 2013 East Point City Budget and it’s impact the Utility Rate, Property Tax Rate, Capital Improvements and the overall level of services offered to residents and guests of the City of East Point.
Key Tax Rate Hike Information
Posted In : East Point, Feed, News & Reports, No New Taxes, Real Estate, Taxes
This entry was posted on Tuesday, March 20th, 2012 at 8:00 am. and is filed under East Point, Feed, News & Reports, No New Taxes, Real Estate, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.