Should Kaysville’s power company money pay city expenses?
Thanks to a citizens' initiative, voters in Kaysville will cast ballots in the fall on whether to restrict the use of revenues from the city's power company to "direct operations" of the electrical system only.
Under Proposition 5, the Kaysville Power Department also would maintain an emergency fund. Any revenue remaining after operating expenses were covered and the emergency account was funded would be redistributed to power customers.
The vote will involve more than dollars and cents, according to organizers who gathered enough signatures to put the measure on the Nov. 5 ballot. The bottom line, they say, is government transparency.
Art Morley, spokesman for Kaysville Citizens for Responsible Government, said city administrators have been using power fund money to hire police officers, among other expenditures.
If Kaysville were using money from its general fund and needed more for city operations, it would have to raise property taxes, which would require a public hearing, Morley said. By transferring money from the power fund, customers are paying for the expenditures through rate increases without being told the reason for the bump, he said.
"I don't have a problem hiring more police officers if we need them, but show that we need them," Morley said.
Members of the citizens' group says electric rates went up almost 10 percent last year — additional money that they believe went mostly toward outside uses.
Kaysville officials acknowledge a transfer in fiscal 2013 of $265,000 from the Electric Utility Enterprise Fund was used to pay for better police protection. But that was a good deal, they maintain, conceding that continuing that protection without a transfer would have meant a property tax increase.
They emphasize they follow accepted accounting principles, and point out that state law allows transfers from a utility enterprise fund to another fund to pay for capital projects and specific operations.
According to a memo by Kaysville Finance Director Dean Storey, the initiative, if passed, would shift about $409,000 in costs to property taxes, leading to an approximate 33 percent increase in the city portion of the bill, and require the use of more public debt for operations.
Councilman Brett Garlick cited an incident when a broken pipe needed immediate repair and the water fund didn't have enough money to cover the work.
Money was transferred from the Electric Utility Enterprise Fund, he said, and the loan was repaid in full over time. The city did not have to incur borrowing costs under the arrangement, Garlick said.
"It (the initiative) eliminates the flexibility of the city to provide services in different departments and to pay for emergencies," he said.
Garlick also said that even with the rate increase, only the second in many years, Kaysville residents still pay less for their electricity than Rocky Mountain Power rate payers.
Kaysville Citizens for Responsible Government, though, say a 33 percent property tax increase would be less of a bite, which they estimate at $89.66 a year for an average home, than the rate increase, at an estimated $110.53.
"The city needs to understand that this is simply taxation without representation," group member Orwin Draney said of the rate bump, "and without the benefit of writing it off our taxes."