Minutes 04/30/1984 - Laserfiche WebLink

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''.} , lJ " MONDAY APRIL 30, 1984 - The budget as now prepared envisions transferring out from the Electric Department $1,775,000, almost $500,000 from surplus. While, to a lesser degree, we budgeted a similar transfer last year, the current estimates would appear to make the budgeted transfer from surplus necessary. The City Manager's August 31, 1983, memorandum which, updated, shows a $2,030,000 projected Leatherwood Creek water cost which nets out at $1,530,000 projected expense after a deduction of $500,000 from water surplus. Moreover, this memorandum alludes to $3,764,500 (1995 dollars) for projection of Electric Department capital needs. Let me point out now that we have what appears about $2 Million in the Ridgeway Escrow Account and about $2~ Million surplus in the Regular Electric Department. This, to me, raises the question of why we should borrow heavily for water and sewer - thus raising rates _ when we have money on hand. We have already raised water rates, and sewer rate increases of up to 20% have been discussed. These rate increases will not only "sock it to industry" but to every citizen of Martinsville who has already borne a recent substantial water rate increase. Industry is the large user and this in turn jeopardizes to some extent the favorable "industry climate" Martinsville has always attempted to pro- ject. It could be hurtful to our present industry and a road-block to future industry. Keeping water and sewer rates low protects jobs in the industries we now have and those we hope to attract. I can't find a compelling reason not to use a large chunk of the $2 Million Escrow Account to pay for water and sewer expansion and improvements. As to the projected capital improvements for the Electric Department, I believe these funds could be accrued year-in and year-out in the future from our Electric Department profits; these accruals to add to the cur- rent $2~ Million surplus. I suggest, then, the Council (1) Consider the budget unbalanced by nearly $500,000.00; (2) Declare the escrow money to pay for water and sewer improvements and, therefore, stave off the planned rate increases; and (3) Use the Electric Department surplus to pay for future expansion and improvements of the Electric Department and eliminate the transfer of nearly $500,000 surplus to the General Fund. As is his want, the City Manager has prepared a scholarly and profes- sional budget message as well as a thoughtful budget. I've always taken the position that he ought to make the appropriate recommendations for budget cutting to meet a desired goal. Some of the areas I might sug- gest that he and the Council look to for the $500,000 are: (1) Prison Fund - It is anticipated that the Prison Fund will show a profit this year of $195,420 and a loss next year of $41,586. The major reason for the difference is recovered costs - prison farm. This year's revenue is $589,385. Bud- get for next year is $381,905, a decrease of $207,480. Sug- gest that the City Manager be asked to recompute this.