Minutes 06/06/1975 - Laserfiche WebLink

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/~ I'~ ~J.,: s.: FRIDAY JUNE 6, 1975 At the conclusion of the following statement prepared and presented by Councilman Greene, and upon motion (duly seconded), with Hessrs. Boaz, Hobson and Greene voting in the affirmative and with Messrs. Lester and Fitz-Hugh voting against the motion, Council accepted Councilman Greene's recommendation that a transfer of $485,000.00 from the Electric Fund to the General Fund during 1975-76 be authorized instead of $501,663.00 proposed in the summary revisions submitted by the City Manager: The May 27th proposed City Budget suggests a transfer of $436,663.00 from the Electric Department to the General Fund. This figure, according to Mr. Yeaman, is $199,000.00 lower than the $635,663.00 forecasted profit of the Electric Department. The reason for this is that the forecasted profit is predicated on two basic assumptions, both of which are affected by outside factors beyond the control of Council, and if either assumption fails to materialize, the actual profit of the Electric Department could be substantially lower than the forecasted profit. One assumption is that we will sell 159 million kilowatt hours next year, approximately an eight-to-nine percent increase over this year's estimated sales, excluding City usage. I assume that Mr. Corekin has backed up his forecast with a great deal of research, and I take no issue with his conclusions; however by definition, sales forecasts are no more than estimates based on market facts that cannot be measured with exactitude. Note the variation in forecasts throughout the proposed City Budget: 7.7% decrease in Business and Occupational Licenses, a 33% decrease in Building Permits and Inspection Fees, a 2.7% decrease in the 1% Local Option Sales Tax, a 1.6% increase in Water Revenues, a 1.5% increase in Sewer Revenues, and an 8-to-9% increase in kilowatt hour sales. In the case of the Electric Department, a mere 2% deviation from forecasted kilowatt hours sold can result in a sales difference of approximately $95,000.00. The second assumption is in regard to the cost of purchased power from APCO which I will not discuss publicly as it involves a contract. If this assumption proves wrong, the Electric Department profits could be adversely affected.