Bountiful Power Pamphlet Shorts Out

This month a pamphlet was included in the city power bill. Overall, the pamphlet is a good representation of Bountiful City Light & Power. It includes several factual statistics (customer number, kilowatt hours sold etc.) and discuses their employees.

First, I do want to point out that the section on their crews’ dedication and service is right on the money:

…crews are available to respond when required: day or night, on sunny days, and snowy days…Bountiful Power crews work quickly and safely to get the power back on so your life can go back to normal.”

I can attest, first hand, that the power department folks are courteous and dedicated and I appreciate their outstanding crews. If you’ve dealt with them, I’m sure you’ve found the same (tip: it’s always a good idea to call HQ and with feedback and ask that they recognize a good employee).

Anyway, I didn’t know how to title this post and, with scant time as usual, I just went with the above. So how does the pamphlet ‘short out’? It’s the line that “public power results in…reduced taxes”.

As demonstrated here, it does not. At best, it transfers who collects the revenue. At worst, it is used as a defacto taxing entity by city politicians manipulating and over-charging customers on their power rates to collect additional revenue and thus also cloak the true tax/government burden on citizens. Bountiful City politicians employ the latter tactic, unfortunately. This tax hiding results in a higher overall burden, in my estimation, as most citizens aren’t aware of the revenue transfer from power department to the city and don’t realize how much government actually costs them, particularly for political crony/pet projects.

I don’t know who decided to add the last page with the “reduced taxes” sophistry but it’s too bad as it detracted from the rest of the message.

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Bountiful Issues Annual Disclosure That It’s Ripping You Off On Your Electric Bill

Normally, Bountiful City issues a notice of their power fund transfer in June but they were late and decided to send you a Christmas present this year.

This year they overcharged Bountiful residents, charities, churches and businesses $2.49 million. That comes on the heals of the $2/month “street light” charge and power rate increase city politicians slapped on everyone so they can maintain their pet project slush fund. That’s on top of the other tax/fee increases they’ve nailed families with.

That’s your labor/money they mayor and city council feel entitled to blow on things government has no business in like ‘ice ribbons’ and getting other cities/Davis County to cough up cash they have no business paying another city (but it keeps the back-scratching circle going…how this doesn’t amount to quid-pro-quo, I don’t know). I’ll type up a separate post on this ice ribbon scheme later.

Naturally, the power fund transfer notice includes the debunked pap about ripping you off really being a “dividend”.

Anyway, I’ve tracked this for years and will continue to do so. Here are a few of the last posts regarding this (click here for all posts on the power topic):
Bountiful Raising Power Taxes Again (2018)
Bountiful Power Has Regressive Rate Structure, Higher Than Rocky Mountain Power Depending On Usage
Bountiful City Raising Your Power Rate To Maintain Politician Play Fund (Update)

Bountiful Raises Property Taxes While Higginson Spouts Low Tax Sophistry

Just a quick update that on Tuesday, the Bountiful City Council unanimously voted to raise the property tax.

I want to note first, that the Police Chief deserves credit for fiscal responsibility and respect of tax money. While facing labor issues (lack of pay, staffing shortfalls etc), he made hard decisions and slashed various budgets and programs to maintain the core mission. Some of the things he had to cut probably didn’t help city security (note: that’s my opinion, he didn’t say that).

He’s a contrast to the Bountiful tax-and-spend city council. While he was prioritizing and struggling to keep a fundamental role of government going, the city councils and mayors (current and prior) were blowing money on unnecessary pet projects and special interest butt kissing. I have a partial summary of their ‘priorities’ which didn’t include properly funding the police department in my prior post on this tax increase. But, hey, their track record on prioritizing funding for core government functions kinda sucks.

Apparently during the meeting, Councilman Richard Higginson spouted the comical spin that Bountiful is the second lowest taxes city of Davis County cities. It’s bunk. He’s full of crap.

I won’t rehash it; the city hides the real tax rate in their power rate/fee manipulation (click the prior tax increase link for details – they’re in that post). Once accounted for, you can compare apples to apples on tax rates and Bountiful is NOT the second lowest. Period.

Lastly, I am disappointed in Kendalyn Harris. She’s touted as the ‘conservative’ voice on the council. Yet nary a peep comes out of her on these issues and she’s steamrolled into voting for the dumb Main Street Plaza. That didn’t change here. She didn’t call out Higginson for his drivel, didn’t call for following the chief’s example and slashing wasteful city programs (or having users pay for them) and just voted for the increase.

Oh, and for the record, we should again thank Representative Ray Ward (who city council members endorsed, naturally) for supporting the bill that forced part of this tax increase.

Bountiful’s 2018 Property Tax Increase (Bountiful City And Ray Ward Heaping More Tax Increases On Families)

You’ve either received or will soon receive a glossy tax increase notice from Bountiful City. They are planning on jacking up your property tax rate. Part of this is thanks to Representative Ray Ward having a voracious appetite for tax increase schemes (like the homeless offset through 2018 SB235 and property tax games). However, this also comes on the heels of:

There are a few other increases that I think I’m missing but I don’t have time and you get the gist.

City politicians, however, say we have some critical stuff to fund like roads and police. Funny thing is we already have the money but local politicians and special interests don’t want to give up their pet projects. As I said when we faced the 4000% increase for fire service, the money was flushed:

[Politicians] had other big priorities like Recreation Centers, RAP taxes, theaters, plazas* and fun attempts at new city halls, skate parks, museums, art centers, street cars and other crap I don’t remember anymore.

I also missed the forced recycling fee (which Ray Ward lobbied for). It’s garbage…literally. With China calling it quits on recycling junk, we’re literally paying an extra fee for garbage.

No wonder so many city leaders endorsed Ray Ward. Talk about scratching each others’ backs.

Finally, the offensive “Bountiful has 2nd lowest individual tax rate of the 15 Davis County cities” falsehood. It’s total shell game Beeee Essss:

Bountiful uses the city power department to cloak the actual tax/government burden by manipulating rates and fees as an additional revenue stream into the general fund that isn’t subject to truth in taxation. As I’ve demonstrated here and several city politicians (and a former city manager) acknowledge, without the cloaked power tax, actual tax rates would be roughly doubled**.

Go back to the tax chart the city placed on the tax notice. If you double the rate (from 0.000832 to ~0.0016) to account for the transfer from the power company (thus comparing apples-to-apples with other cities), Bountiful ends up in the top 5 highest taxed in Davis county (about tied with Kaysville!).

Why would I get excited about Kaysville? Because Kaysville used to also use it’s municipal power company to manipulate rates and cloak taxes. Citizens figured out the game and forced an end to the practice. The result was Kaysville’s tax rate went up to it’s real (unhidden) level. This near rate match between Bountiful’s adjusted rate and Kaysville’s rate lends more credence that the above doubling is valid.

The open house is at City Hall on July 19 at 6PM and the official public meeting is at City Hall on August 7, 2018 at 7PM. Good luck.

*Addendum: Here’s some irony for you. The city is hiring two workers for their frivolous plaza. Meanwhile, the city is justifying part of the tax increase to hire two new police officers.

**Addendum 2: Another analysis by Ron Mortensen combined the revenue from property tax and the power transfer to calculate the actual rate results in a rate of 0.001361 (pre increase) 0.001448  (post increase) or about equivalent to North Salt Lake  (a couple of cities behind Kaysville) and in the middle of the other cities (certainly not second lowest).

Bountiful Raising Power Taxes Again (2018)

Bountiful City (via the city power company, Bountiful Power & Light) is moving to raise your power bill again on top of last year’s customer charge increase (a 67% jump from $6 to $10/month). As I’ve documented for years, Bountiful city politicians use the municipal power company to raise money while skirting truth-in-taxation requirements. This method provides a significant fund transfer (about $2.5 million this year) and lets city leaders speciously claim the city has lower taxes than others its size.

Now we’re all on the hook for a $2/month/account increase for a “street light fee”. Normally, cities pay the power company for street light electricity. However, if I recall correctly (please correct me if wrong), about 10 years or so ago, Bountiful Power made some bad decisions and played the wholesale market (something a government-owned entity shouldn’t do)* and they lost. Due to the loss, some deal was struck that the power company would cover electricity for street lights and the city wouldn’t pay for it.

Now, city politicians have decided to exploit this abnormal street light cost line item as another avenue to raise funds and cloak actual tax burden. This may also lead to an increase in the power transfer from the current $2.5 million/year.

Meanwhile, we’ll continue to get treated to letters patting residents on the head about being unwitting “investors” and getting ghost “dividends” (and zero SEC protections). The shtick used to be funny but now it’s just insulting.

*The loss may have had something to do with this, but I’m not positive: Bountiful Power “Call-Backs and Resales”.

Edit: I had written FTC rather than SEC. I just realized it and corrected it (so many federal acronyms…). As an aside, these municipal power companies really should also be brought under the jurisdiction of the Utah Public Service Commission.

Bountiful Power Has Regressive Rate Structure, Higher Than Rocky Mountain Power Depending On Usage

I’m playing catch-up, big time. Also, sorry for the long post title. This is a follow-up to my June post (Bountiful City Raising Your Power Rate To Maintain Politician Play Fund) I haven’t had the time to update. This has updated information (thanks to Councilwoman Kendalyn Harris and Jay Christensen, Power Dept. Accountant who also provided the new fee/rate comparison pdf).

First, per Mr. Christensen, they expect $800,000 additional revenue per year (I had estimated a minimum of $700k/year based on census numbers). Secondly, the information pamphlet the city sent out had another bit of vague information. They are not increasing the power rate, they are increasing charges, specifically the monthly customer charge is jumping from $6/month to $10/month (a 66% increase).

I like to compare rates/fees to Rocky Mountain Power (again, remember RMP has to make money to return to shareholders and has higher regulatory overhead costs than Bountiful). Number crunching time.

I looked up RMP rates. They are:

Customer charge: $6/month

May-September
8.8498 cents/kWh for the first 400 kWh
11.5429 cents/kWh next 600 kWh
14.4508 cents/kWh all additional kWh

October-April
8.8498 cents/kWh for the first 400 kWh
10.7072 cents/kWh all additional kWh

Bountiful rates are:

Customer charge $10/month
Bountiful is a flat 9.25 cents/kWh

Per the power department, the average kWh used by Bountiful residents is 850 kWh. To compare to RMP, you have to use a weighted figure:

May-September
(8.8498*400)+(11.5429*450)/850 = 10.2756 cents/kWh (11% higher than Bountiful)

October-April
(8.8498*400)+(10.7072*450)/850 = 9.8331  cents/kWh (6% higher than Bountiful)

Customer charge: Bountiful is significantly higher: 66% higher ($10/$6). Ouch.

HOWEVER, besides the significantly higher customer charge, note that if you are a low power consumer (I am), you are paying more by using Bountiful Power. If you use around 400 kWh or less, you’re looking at a ~5% higher bill plus the higher customer charge. In effect, Bountiful’s structure is a regressive structure which comparatively hits low power consumers (likely low-mid income brackets) harder than high power users.

Bountiful City Raising Your Power Rate To Maintain Politician Play Fund (Update)

EDIT: Bountiful Power sent me information that changes some items in this post: The $4/month increase is a customer charge increase (not your actual kWh rate) and they expect about $800,000 in additional revenue/year. To view some comparisons to Rocky Mountain Power and the outcome of this change see my recent post on this.

About a week ago, I noted the city had come out with its annual spin on bilking you on your power rates. This week, they doubled down and are sending you a glossy four page ad (with more ridiculous “investing” spin) about your rates going up $4/month. As I noted last week, the city is already transferring $2.45 $2.49 Million from the city power department (by overcharging you on power). So what does $4/month come out to per year in extra cash the city politicians can play with?

Well, per the 2010 census, Bountiful had 14,504 households in it (since that’s seven years ago, but I’ll be conservative and stick with that number). Therefore, $4/month X 12 months X 14,504 households = $696,192 extra cash flowing to the city.

That’s a minimum figure as the city has grown since 2010 and I believe rates will also go up for churches, charities, and businesses in Bountiful. Supposedly, the increase will go to infrastructure improvements but don’t be surprised if next year’s transfer from the city power dept. magically increases as well. So rather than use part of their $2.45 annual fund, they’ll take at least $696K more from families, churches, small businesses…etc. Priorities, priorities.

The city admits they use the power company in lieu of taxes for a revenue stream. Thus, by playing with rates, they can do two things: 1) Evade truth-in-taxation law and 2) Claim the city has the lowest taxes for its size the state (AKA bait-and-switch).

If the city wants to continue to manipulate your power rate, they should be brought under Public Service Commission oversight and if they want to continue the laughable claim that you’re an “investor” and this is a “dividend” they should also comply with SEC filings just as Rocky Mountain Power must. Personally, I would rather see this entire ‘municipal power as de facto taxing entity’ practice banned.

For all posts related to Bountiful Power, click here.

UPDATE: It just sunk in that this power rate hike is permanent (I’m not the sharpest tool in the shed…). The increased revenue is an annual income to the city. That means the city is really effectively raising taxes on everyone (to the tune of at least $696K per year). With that juicy new revenue stream, I find it much harder to believe we won’t see the power fund transfer to city coffers jump (even if the funds are initially used for infrastructure improvements).

Next, on the pamphlet, under the new solar customer rates section (bottom of last page), it appears solar customers will have a 9.25 cents/kWh rate when they use power. The concern that raises for me is 9.25 cents/kWh is the current rate. Does that mean everyone else will face a higher rate (due to the increase) while solar folks get the old (current) rate? That sounds like they’re getting an additional subsidy. I am not cool with that at all IF that is the case but the pamphlet unclear.

Finally, I find it a ironic and annoying that I got the information which encourages citizen feedback after the city council meeting (on Tuesday) was held and the vote taken. I’m willing to bet the rate increase was approved. I’ll update this post when I find out.

EDIT: See the note at the top of this post. As this was a customer charge increase kWh rates are not affected, thus traditional and solar customers still pay the same rate for power.
EDIT II (8/17): The last utility bill letter included a “Follow-up Notice To Bountiful City Utility Customers”. The notice disclosed that the transfer from the power dept. is actually $2.49 Million ($40,000 more) than the prior notice. The new amount represents “7.8% of the total budgeted expenditures in the Light & Power fund.” I’ve updated the amount above.