Utility fees in place of property tax?
The City Beat has a fun little story for you today about the struggle the East Grand Forks City Council is having with its water and light commission.
Basically, the council needs $1 million to repair the Civic Center. It doesn't have that kind of money sitting around and -- I'm just taking a wild guess here -- raising property taxes isn't that popular.
So it's asking water and light to foot 75 percent of the bill. Water and light gets its money from utility fees and, considering the pressure it faces to cut fees, naturally resisted the council's suggestion.
I'll admit that I'm pretty skeptical when funds get mixed like this. When most people pay their utility bills, I think they believe that their money is paying for the amount of water or electricity they consume -- not for the repair of a city own events center.
Following this train of thought, it's reasonable, then, to ask if the council isn't looking for a source of funding that isn't going to make taxpayers angry. Don't forget that, in 2004, voters voted against the proposed repair and upgrade of the Civic Center that carried a price tag of $3 million. It's only $1 million this time.
There's two ways to look at this.
First is the purist view. I know that in Grand Forks, many council members like the fact that they don't transfer utility funds to other city operations. This is in contrast to other North Dakota cities, whose utility departments are essentially profit making operations. Some council members like Eliot Glassheim have even said that they see fees as a kind of regressive tax.
The other view is more mixed. East Grand Forks council members argue that their utility department has the additional responsibility of maintaining city buildings. Council member Henry Tweten is a strong advocate of this position and he used to be on the water and light commission himself.
Basically, the council needs $1 million to repair the Civic Center. It doesn't have that kind of money sitting around and -- I'm just taking a wild guess here -- raising property taxes isn't that popular.
So it's asking water and light to foot 75 percent of the bill. Water and light gets its money from utility fees and, considering the pressure it faces to cut fees, naturally resisted the council's suggestion.
I'll admit that I'm pretty skeptical when funds get mixed like this. When most people pay their utility bills, I think they believe that their money is paying for the amount of water or electricity they consume -- not for the repair of a city own events center.
Following this train of thought, it's reasonable, then, to ask if the council isn't looking for a source of funding that isn't going to make taxpayers angry. Don't forget that, in 2004, voters voted against the proposed repair and upgrade of the Civic Center that carried a price tag of $3 million. It's only $1 million this time.
There's two ways to look at this.
First is the purist view. I know that in Grand Forks, many council members like the fact that they don't transfer utility funds to other city operations. This is in contrast to other North Dakota cities, whose utility departments are essentially profit making operations. Some council members like Eliot Glassheim have even said that they see fees as a kind of regressive tax.
The other view is more mixed. East Grand Forks council members argue that their utility department has the additional responsibility of maintaining city buildings. Council member Henry Tweten is a strong advocate of this position and he used to be on the water and light commission himself.
posted by Tu-Uyen at 11:08 PM
6 Comments:
A purposeful debate was held on June 20th in City Hall at the Water and Light Commission meeting that should be of interest to all citizens of the city. The debate was reported by Herald reporter Tu-Uyen Tran and the subject was the request for funding by the Water and Light Department for the repair of the Civic Center.
Mayor Lynn Stuass and Council Person Dick Grassel proposed a request to the commission that Water and Light provide $750,000 for the repair of the Civic Center. There was a strong appeal from Mayor Stauss and Council person Grassel to influence the civic benefit of repairing the facility. From my vantage point the Commission listened intently and gave the matter careful consideration. While everyone in the room appeared to agree that repairing the Civic Center
was a good cause and in the interst of the commuinity in general, several members of the Water & Light commission questioned whether or not this action was within the domain, or jurisdiction of the Water & Light Commission’s charter. There did not seem to be any descent on wether or not the cause was worthy, the debate from the Commission’s point of view centered around the whether or not the action could be defended legally.
After several minutes of debate and questions and answers from the city attorney (who also advises the Water & Light Commission) the Mayor (Mr Stauss) exclaimed he was impatient and dissatisfied with the proceeding and appealed to the commission that he felt that regardess of the legal precedent, that the Water & Light Commission should approve funding for the project because it was the right thing to do. This is the impression of the listener, and may not represent the actual intent of Mr. Stauss.
Mr. Stauss seemed uninterested in the official and legal stance of the Commission and the attorney and made repeated appeals to do what he felt ‘was right’. The Commission discussed imaginative means in an attempt to fulfill the goals of the mayor but was unable to arrive at a solution that provided the full $750,000, and remain within the perceived jurisdiction of the department and the Commission.
It was clear that most members of the Commission supported the request of Mr. Grassel and Mr. Stauss, but they wanted to support the request within the guidelines mandated by City and Water & Light Charters, and State laws. Several suggestions, and alternatives were presented for discussion with no-consensus by the commission, or to the satisfaction of Mr. Stauss and Mr. Grassel.
At one point during the discussion the Commission was challenged by the mayor with speculation that the commission was threatened by termination if they did not comply with the mayors wishes. His comments were unsolicited and freely given. From the perspective of this listener the mayor in essence said that he did not threaten the commision with forfeiture of reappointment, but if the commissioners did not do what he wished, then they would not be reappointed. To me, my interpretation of what the mayor said was "I do not want Water & Light Commissioners doing what is right for the Water & Light Department, I want Commissioners doing what is right for (the mayor)". Perhaps I misunderstood what his intentions were, but I believe they were well-intended and in the best interest of the citizens of East Grand Forks. Only the Mayor can attest to what he really meant to convey.
One recurring topic that came up throughout the discussion was the Water & Light reserve fund and the perception that the accumulation of funds and that paying for city projects implies hidden taxes. Several Commissioners vocalized that the Water & Light department has large reserves because they project future budgets, and anticipate needs to offset future expenses rather than approach rate payers with exorbitant rate increases in the future. They repeatedly stated that the reserves are held against known expenses and the preservation of current rates. While there is a large reserve, most of the reserve is committed, or is prudent to be held under common business practice. In fact, some of the reserve has been set aside to fund projects that are occurring in the next few years. The reserve may be large at this point, but will shrink as these funds are expended toward projects beneficial to both rate payers, the city and the population in general.
The goal of the Commission and the department was clearly stated during this meeting: protection of rates, adherence to law, acknowledgment of the concerns of rate payers and Council persons, and cooperation with the city.
I support them fully in this endeavor.
When the debate caried on, Mr. Grassel and Mr. Stauss eventually announced that they thanked the commission for their consideration, their time, and hoped for a positive outcome.
Hopefully the issue will be resolved for the best interest of the citizens of East Grand Forks.
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If the Water and Light Commission has $700,000 laying around, why not drop our rates a bit?
Good question. Ask your City Council member.
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If the Water and Light Commission has $700,000 laying around, why not drop our rates a bit?
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Water and Light rates have been reduced in the last year..
Also the Water and Light commission plans for repairs and maintainance instead of letting it go for years and then asking the rate payers for millions when stuff reached the breaking point (like the civic center - which wouldn't cost a million dollars right now if the Council budgeted and reserved enough funding over the last 20 years)
Maybe someone should ask the EGF Park Department which has been funded in excess of $1 million for years how they spend their money. They buy a lot of nice toys for their employees so they can ride around town but do they do any work? I agree with W&L...make the City pay the money back!
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