Minutes 09/17/1959 - Laserfiche WebLink

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iO THURSDAY SEPTI~MBER 17, 1959 Loss in school tax revenue $ 9,408.00 Increased cost of electric service to city utilities 11,683.32 Sub-total of effect $ 320,938.99 Less net increase from taxes on private utility - 5,538.99 Total $315,400.00 Adding the average cash balance entered from the electric utility armually into general surplus of city. 38,920.78 Grand total $354,320.78 This total represents the combination of loss in revenue and increases in cost of operation of certain activities of the city government if the electric utility is removed from its present status in the city's financial structure. If a depreciation reserve account is established as outlined in the Depreciation Section of this report then the totals would be as follows: Sub-total of effect - as above $315,400.00 Adding the average cash balcmce entered from the electric utility annually into general city surplus, less cash reserve for depreciation. (page 3) 16,353.28 Grant total - with depreciation reserve allowance $331,753.28 To avoid c onfus ion in the sue ceeding parts of this summary, the analys is will be developed using the total of $354,320.78. B. Replacement of funds. The method of replacing or supplementing funds lost by disposition of the electric utility would in itself need detailed study, more complete than could be developed here. A point of note is that electric billing provides the broadest base possible for reaching residents of the city in financial support of the government. Next to electric utility gross revenue, the largest single item of city revenue is real estate taxation. Using that to make up for general fund loss in revenue and added expense would produce this comparison: At the current rate of $1.85 per $100 assessed value, tax collections on real property and public service corporations are estimateci in 1959-60 to be $635,940.52 Annual tax collect.ion $635,940.52 Total make up from loss of electric ~stem 354,320.78 Total 0990,261.30 To make up this total would necessitate an increase in rate of $1.04 per $100 assessed valuation to a total rate of $2.89. This is not to necessarily isolate real estate and public utility taxes as the single method as a source of replacement of funds that would be lost if Council were to dispose of the electric utiEty. City Council would no doubt wish to review the range of its other sources of revenue.