As I’ve noted in the past, Bountiful uses its power rates to keep a nice cash flow into the city’s general fund. The city, essentially, overcharges users to maintain this flow into the city coffers.
The benefit is the city: 1. avoids potentially messy truth-in-taxation hearings and 2. can, disingenuously, claim lower (than actual) tax/fee burdens on residents. Additionally, the city has, in the past, suprisingly boasted, that control of the power rates allows them to get money from tax-exempt facilities like churches, food banks, and other charities. Hey - it’s about time those dastardly tax-dodgers pay!
Power rates are going to jump another 10% for Bountiful residents/businesses. Fortunately, the city will maintain its $2 million slush fund transfer:
BL&P [Bountiful Light and Power], as a public business concern, has traditionally transferred a portion of revenues to other city uses. [The city manager] said that will continue.
However, maintenance of that transfer may come at an, unspecified, cost (emphasis added):
“Normally all of this would translate to a 15 percent increase (in power rates), but we’re cutting other things down,” [The city manager] said.
Another noteworthy point is that while Bountiful’s power company does not pay taxes, and, to my knowledge, does not face the same scruitying from the Utah Public Service Commission, its rates may be the same or higher (We could be higher (than Rocky Mountain Power),” after the rate hike, [BP&L director] said) than the private Rocky Mountain Power (which faces and adds the scrutiny and taxes into its power rates).
A few years ago, Bountiful’s council (or city manager, or both), stated that they would consider selling BP&L, if it cost residents more than private power. I doubt that was a serious pledge, however. City government enoys its cloaked tax revenue too much for that in the near future.
Finally, the city is spinning that the transfer is proportionally less than in the past. That’s not surprising as power rates have increased and continue to do so - throughout it all the city has continued to maintain it’s slush fund.
[...] Second, the RAP tax kicks in this month (I think it started on April 1 but I’m not positive). Centerville and Bountiful residents now have the pleasure of being forced to subsidize live theater fans’ ticket prices and mayoral or city council pet projects. In other words, prices at Bountiful and Centerville stores just went up. Those in West Bountiful, Woods Cross, and North Salt Lake will remain the same.Third, Bountiful residents also get to see power bills increase, unspecified cuts in power serviced, and the city maintain its $2 million transfer to itself via the covert power tax. [...]
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[...] year, the city uses its power company to transfer about $2 million into city coffers. To my knowledge, most major cities, with a power company, (unless Lehi is a major city) do not use [...]
Pingback by Bountiful Power Taxes and Recycling (Warning to West Bountiful) « Utah Rattler — May 29, 2008 @ 13:46 pm