Minutes 09/25/1984 - Laserfiche WebLink

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4: TUESDAY SEPTEMBER 25, 1984 The City Administration has recommended that Council finance the City's share of improvements to and expansion of the wastewater treatment plant by selling $3,325,000 in sewer bonds which will require a 22~% increase in sewer rates to pay yearly principle and interest. This does not make sense to me in view of the fact that the City has $4.5 million dollars in the utility funds. Various reasons have been offered by the City Administration to support their position that we should not use any of the Hydro-Dam Escrow Account Money to pay for the sewer improvements and reduce or eliminate the pro- jected 22~% sewer rate increase. Three of their reasons, and my responses, are as follows: First, that it is wrong to use money from one fund to pay for capital ex- penditures of another fund; that is, that each fund should be self-supporting. I disagree with this position for two reasons: (1) It is inconsistent with past policies of the City; for example, in the past, profits from the Water Fund were used to offset Sewer Fund losses, and, presently, Electric Depart- ment profits are used to pay for General Fund operating expenses and hold taxes down; and (2) I think that instead of making sure that each fund stands on its own, the City will be better served if Council takes advan- tage of every opportunity to provide the best service to all citizens at the least possible cost. Another reason given by the City Administration to support their position against the transfer of the Hydro-Dam Escrow Money to the Sewer Fund is that monies available in the Escrow Account were acquired from the City's electric customers which does not include Sale Knitting Company, one of six major industries in the City that has always been served by APCO, and that any sub- sidization of the sewer rate will benefit Sale Knitting more than other users. I disagree with this position for two reasons: (1) Years ago, City Council decided to offer attractive water and sewer rates in the hopes of attracting large water and sewer using industries. Today, according to the 1984 Update of the Comprehensive Plan, Sale Knitting Company is the City's second largest employer and Pannill Knitting Company is the City's third largest. The two companies employ an average of 4130 people, a full 48% of the 8600 people who work in the City's major industries. The City's economy is dependent on these two knitting companies, and it seems to me that Council should do every- thing possible to continue to hold and attract such companies regardless of whether or not the companies buy their electricity from the City or from APCO; (2) while it is true that Sale Knitting does not buy electricity from the City, it is also true that Pannill Knitting Company does buy City power; therefore, it does not make sense to me to penalize Pannill because Sale buys their power from APCO. A third reason given by the City Administration for their opposition to the transfer of the Hydro-Dam Escrow Money to the Sewer Fund is their contention that the Electric Department does not have enough surplus because of pro- jected capital improvements of the Electric Department, expressed in 1995 dollars, totaling $3,764,500. I disagree with this reason because, as I see it, the City has enough money on hand to take care of the projected Electric Department improvements and to transfer all of the funds from the Hydro-Dam