Agenda Packets - 1993/09/07 - Laserfiche WebLink

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STAFF REPORT PAGE TWO SEPTEMBER 7, 1993 the street light costs were on the property taxes, the cost would increase. A utility rate is not dependent on property values or property tax increases. Rates are generally held constant. The utility provides funding for new street lights, repairs and maintenance costs. Without the utility, the City may not be able to fund new lights or keep up with adequate repairs. Please see Attachment 1 which compares the utility vs. property tax on the projected 1994 annual revenues collected - $75, 000. Please note that the property tax figure is based on 1993 tax rates. If the tax rates increase in 1994, so does the amounts paid by the different property classes. 4. How many street lights have been installed since the utility began? A: Six 5. How many street lights does the City really need to have installed? A: Five years ago, an informal study conducted by theM.V. Police Department concluded that the City would need an additional 100 street lights to provide the maximum amount of safety. Since that time, 11 street lights have been installed. At the time the Street Light Utility was implemented, staff presented a "best guess" estimate in regards to the costs associated with the utility. At that time NSP was before the PUC requesting a rate increase, the State was talking about imposing sales tax on cities and the City was considering a franchise fee on gas and electricity. All of those things became reality and impacted the amount of money the City spends for street lights - we pay sales tax on the electricity at a higher rate than before, and we also pay the 3% franchise fee. If the City were to sunset the street light utility, the expenditures for street lights would be folded into the General Fund. We could reduce the expenditures by not providing funding for new lights, replacement of lights and only minor repairs. The financial impact to the property tax payer would be more or less than the utility fee (depending on property value) , but it would not remain constant in the future - NSP rate increases are granted about every three years and, as much as we try to keep a lid on it, property taxes generally go up thereby increasing the per property amount paid for street lights.