Perennial Bountiful City Spin: Taxes and Power Rates

In the February, 2009 Bountiful City newsletter, the unnamed author states:

Bountiful has the lowest property tax rates of any of the twenty largest cities in the state, and the lowest utility rates of any of them as well.

This is just more of the same spin I have covered on several different occasions.  But for the sake or recapping, the city power rates are higher.  Bountiful Light and Power is charging 9 cents/kWH while Rocky Mountain Power is charging about 7.6 cents/kWH (and that’s rounded up).  In the summer, RMP does have a graduated scale but, even assuming high power usage from a home, RMP will still be under Bountiful Power’s rates.

As I’ve noted before, Bountiful is not subject to the Public Service Commission (see the last sentance at the link), doesn’t pay all taxes RMP is subject to, and isn’t subject to other regulatory and share holder (profit) demands a private company is.   Despite all these costs, RMP provides electricity at a lower rate.  Additionally, I did not include the fact that Bountiful Power has double the customer charge ($4) that  RMP assesses ($2).

One final note should be addressed, however.  Bountiful City draws about $2 million each year from the Bountiful Power dept into the city’s general fund.  That may help to account for the higher energy cost (they’re intentionally overcharging customers in an effort to maintain the $2 million transfer for the government to use as they wish).  There may also be another reason for the higher rates (and transfer amount) depending on ‘aggressive’ the power department manager is with tax money on call backs and resales.  And that brings me to the dubious tax claim (I’ve also discussed in the past):

If users weren’t overcharged for their power, the city would have to almost double property tax rates to maintain the $2 million transfer (Bountiful collected $1.96 million (pdf) in 2007-2008).  Currently, the true property tax rate is cloaked using the power company as another de facto taxing entity.  If you add in the $2 million and, thus, roughly double the tax rate, Bountiful is tied with West Jordan and places it right in the middle,  in the number 10 spot,  (and not even close to the lowest) of the 20 largest Utah cities.  I used this 2000 census data and property tax rate data from the Utah Tax Commission to make the analysis.

Two caveats that may give Bountiful some spin room on the power rates:

1. The author states “utility rates”.  Gas is provided by Questar so I’m not sure what other “utility pricing” they may have used to make their statement (and I don’t have any other additional data time to dig any further right now).

2. The author may be excluding cities serviced by RMP and only comparig to cities with a municipal power company – I think, besides Bountiful, only Lehi and St. George have their own power companies…  However, the author alludes that they are comparing to the 20 largest cities and Lehi isn’t one of those, leaving only St. George.  I would hope they wouldn’t use such a specious argument, however.


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