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

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 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.

Happy Anniversary! Its Time For Bountiful City To Spin Ripping You Off On Power

Good news: Your anniversary present comes dressed in a beautiful evening gown with stunning lipstick…too bad it’s a pig.

Exactly a year ago, I posted my annual note about Bountiful flimflamming residents on residents getting overcharged for power. This year, the city sent out the same, boiled over sophistry ($2.45 Million in overcharges the city keeps = a “dividend”/”investment”) in a letter that came with your power bill. [Edit: Be sure to look at my 2015 post on the investor/dividend distortion]

This year I’m going to save my limited free time and not rehash how the city’s spin is phony. For that, look at last year’s post (and the year before that…and the year before that…) or click on the Bountiful Power tag for all things related to the city’s (ab)use of their power department as a surrogate taxing entity to skirt truth-in-taxation (and yes, even in the letter, the city admits “…what otherwise would be a significant increase in property taxes”).

‘Till next year.

Bountiful City’s 2016 Power Raid Spin

A new year and the same spin. As I’ve documented for years, Bountiful City uses it’s power company to avoid truth-in-taxation requirements by manipulating power rates/fees. This was finally admitted in their last few letters:

…are used to offset what otherwise would be a significant increase in property taxes.

In their now perennial spin letter (verbatim to last year’s letter) they again herald how great it is to be able to dodge a tax transparency law other cities need to follow and can fleece naive citizens and charities to the tune of  about $2.46 Million this year (around $100,000 more than last year).

Their letter continues the same spin about “investors” and “dividends” both of which I debunked in last year’s post. Like I said then, if we’re really investors, then they better be filing with the SEC and I’m sure the SEC would love to meet with them to discuss their illegal use of investor returns. Talk about patronizing.

I won’t go into further detail on the other sophistry contained in the letter (see the above link to last year’s post for that). I will conclude with this: Bountiful Power’s rates remain higher (for up to 400kWh) than Rocky Mountain Power which has more oversight, regulatory, and tax overhead (9.25 cents/kWh versus 8.85 cents/kWh). Oh, and Rocky Mountain Power actually does comply with the SEC and return dividends to their investors.

As an aside: Bountiful’s City Council’s meeting on June 14 at 7PM will official transfer their power slush fund loot into the city coffers. Feel free to attend/email but don’t plan on them giving a rip on what you have to say (the decision was made long before the council meets).

Bountiful City’s Fallacious City Power “Dividend” (Update)

Maybe the Kaysville’s citizen revolt on its power transfers has Bountiful City worried. Accompanying this month’s Bountiful City Power bill is a mandatory notice letter that goes out of it’s way to shout praises that the city opts to overcharge you on power (and avoid truth in taxation) and tries to convince you that such is a “dividend”:

Viewed in another way, these transfers are a “dividend” to Bountiful Taxpayers as the result of the taxpayers’ original investment in the City’s power infrastructure.

It seems that city believes that dividends are not returned to investors to do with as they please, rather, dividends must be returned to the company (Bountiful City) to do with as it pleases. Unfortunately, Webster doesn’t seem to agree

finance : an amount of a company’s profits that the company pays to people who own stock in the company

I also have a feeling the SEC would frown on a company unilaterally spending it’s investors dividend. This years take from taxpayers forced investors: a cool $2.38 Million.

Almost humorously, is that the city’s own words sum up the whole reason they continue to spin the power overcharge – a convenient vehicle to dodge truth-in-taxation and cloak the actual tax burden and cost of government:

…these dividends are used to offset what otherwise would be a significant increase in property taxes.

Doubly humorous exit quote from the letter:

The transfers also provide a means for reimbursement of the…services provided to non-property tax paying groups such as non-profit organizations, churches…

Shame on those dastardly charities and religious community service zealots! Glad we could stick it to ’em.

UPDATE (June 8): I understand that the Bountiful City Council will meet tomorrow to officially transfer the $2.38 Mil. during their scheduled council meeting. Feel free to attend or email them about it. Good luck getting them to switch off the gravy train.

Dodging Truth-In-Taxation With Municipal Power Rate Manipulation (Kaysville, Bountiful)

Last year, Kaysville residents successfully blocked the city from using its power department to overcharge them on power and pocket the excess money in city coffers.  The same practice continues in other Utah cities with their own power generation departments (notably, Bountiful City). Cities engaging in this behavior benefit in two ways. First, cities can, and do, falsely claim that they keep taxes low (power rate manipulation cloaks the true tax burden). Second, they avoid scrutiny from legally required truth-in-taxation hearings (instead, they just increase power rates or customer charges). Now that Kaysville City can’t hide behind the power department, the uncomfortable truth of actual tax burden is emerging (Utah town proposes 102% property tax hike):

A proposal on the table in one Utah town could end up doubling property taxes. That proposal in Kaysville would increase property taxes by 102 percent. City leaders say the tax hike is necessary to counter a ballot initiative last year, known as Prop 5. In November, voters restricted Kaysville from using money from the city-owned power company for general fund expenses. “There is no public process there, there is no transparency,” Gregory Frank, a supporter of Prop 5 told ABC 4 Utah’s Kim Johnson last April. “What we’re trying to do is keep Kaysville city from circumventing truth in taxation laws.”

Progress: Kaysville Residents Temporarily Stop Power Funds Transfer (Update – Now Permanent)

I just found out about this, but kudos to Kaysville residents on their fight: Kaysville council votes to cancel fund transfer

Funds will not be transferred from the city’s electric utility fund for use in its general fund, after a vote taken on Tuesday.

City council members voted unanimously to support the amended budget, after hearing testimony from concerned citizens earlier this month and discussing the transfer at a work session last week.

…A group of residents opposed the transfer from the outset and collected enough signatures to get an initiative on the ballot this coming November, that would prevent the city from making transfers in the future.

In light of the initiative, council members decided against transferring the funds this year.

Clearly, the fight isn’t over yet. The real victory will be if the initiative is passed and this insidious practice ends.

Hopefully, that will also bode well for other cities, including Bountiful (now transferring $2.37 million), where it appears others, besides myself, have taken notice: Bountiful fund transfer raises ire.

UPDATE (November 2013): Kaysville residents just made this permanent.  Proposition 5 which prohibits such transfers passed during this election.  Congratulations!  Hope more cities will follow suit.

Utah’s Clean Air Dupe: Endless Tax Increases, CNG Monopoly, And UTA’s Stealth Bailout

UPDATE: Herbert has signed the bill.  He’s bailed out his buddies and created a new, cloaked and uncontrolled taxation vehicle.  Progressives rejoice.

Who can say they don’t want clean air?  So that should justify any action that would creates a government-ordained monopoly and open a larger avenue for tax increases that entirely undermine truth-in-taxation?  Apparently.  Just look at the end result of SB275 (“Energy Amendments”).

The legislation gives Questar (“a gas corporation”) a virtual monopoly on CNG (natural gas) stations and infrastructure.  CNG vehicles are an increasing market and prime for expansion.  Rather than allow free enterprise and businesses (small and large) to enter the market and ensure competition, the legislation will strangle the market and provide significant advantage for what will amount to a state utility company (Questar).  Instead of using a competitive process for infrastructure and allowing gas stations meet CNG demands,  the legislature and Governor Herbert are primed to severely restrict entry in the market.    All this amounts to is a juicy shade of big government intervention and crony capitalism.

As a “double whammy”, the legislation allows all layers of government to increase gas rates (“in the public interest”, of course) when they feel like it.  As I’ve well documented Utah cities with a municipal power company are notorious for manipulating rates (overcharging) and transferring the excess into their general funds (see here too).  They then turn around and speciously tout low property taxes (without factoring in the rate manipulation).  If signed by Governor Herbert, the barn door will be thrown wide open for not only cities but also counties, special districts, and the quasi-private Utah Transit Authority (UTA). This action will also surreptitiously help bail-out a financially foundering Utah Transit Authority.

The end result is and end run around truth-in-taxation requirements, gas rates for your home as well as CNG vehicles will rise, and government runs on the Questar bank (while claiming your taxes are low)…with the added bonus of a constriction of market entry and competition.  Milton Friedman in “Free To Choose” warned about the unintended consequences of government-corporate regulatory development.  This is just another case study in the making.

Please call Governor Herbert (801-538-1000) immediately and ask him to veto SB 275 (this is your last chance). Too late – see the update at the top.

For more detailed background information, see this post.