07/20/07
Retreat to the Future -
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On the second day of the Council's budget retreat, after some personality profile exercises, the Council heard a presentation from Bryan Bradford, budget director, on the 2007 Financial Climate and Outlook. Then the rest of the day was spent identifying where we think Garland should be in five and 12 years. Some broader goals were developed with 2020 in mind and then some measurable metrics were proposed for five years. We will continue to work on that tomorrow and I'm confident we'll set some agressive but realistic goals that deal specifically with developing businesses and neighborhoods, maintaining the fiscal health of the city, citizen's quality of life, and more.
There were members of the public and media present today for various portions of the day's agenda.
The financial picture changes every year: revenues in some areas are up and down in others, some expenses and capital improvements can no longer be deferred but others are postponed, healthcare costs rise and headcount decreases. In general terms the budget may be similar to previous years but there will be plenty of decisions to be made to set priorities and to decide expenditures. This year is no different.
The Financial presentation shown to the Council today is available here or by clicking the image above. Review the slides for a general understanding of what was presented. I'll cover some of the points but the fine details won't be presented until the Council starts reviewing the budget, with the intent to approve it before Sept 20.
Although there are over 50 revenue categories (sources), 70% of the city's money comes from property taxes, sales taxes, GP&L's "In Lieu of Franchise" fees," franchise fees from other utilities, and municipal court fines.
The property tax base had a steady rise through the 1990's but started dropping in 2002. It is expected to rise to 5.9% this year but the residential portion is flat, not even keeping up with inflation. The rise comes from new construction, even though that is declining compared to recent years, but commercial tax assessments are higher. The rise in commercial tax assessments is probably a near-term anomaly and I've solicited a guest blogger article to give examples of why assessments are higher this year.
The city saw no increase in sales taxes form 2000 to 2004. The opening of the Firewheel Town Center and beer/wine sales caused a healthy jump in 2006. The trend has seen higher revenues since but the rate of growth is slowing. A new Firewheel Town Center cannot be built each year so the growth will eventually stabalize. This year has seen spikes and declines monthly but the long range outlook is trending toward the same level as inflation, about 3.5%.
We, as a city, not just the Council, need to work together to best define where we as a city and commmunity want to go. That process has started but we have an important journey that must still be made.
I invite you to start thinking about where you want your community to travel, in five years, in 12 years. What will your community look like in 2020? |
Comments:
In an investor owned utility the investors put up their money and are issued stock. The IOU takes the investor's money and purchase the equipment and the O&M to run it. In return the investor gets a stock dividend (return on his investment) on his stock. For GP&L stakeholders (customers), it is just the oppposite. We get to pay a ROI to the General fund and our rates are raised in order to cover what goes to the general fund in the form of property taxes on the new value of all the caiptal items, franchise fees based on the total revenues, including the revenue that is derived from the recovery of escelating fuel costs for GP&L.
This slide presentation on the proposed budget shows a estimated 3% increase in fuel rates for GP&L in the upcoming new year. The GP&L ratepayer will get to swallow that to via an increase in rates, again.
Can somebody on this new Council explain in everyday english to me, why the ratepayers of GP&l have to pay a rate (ROI) to the General Fund on the investment in equipment and O&M charges, when they already pay for this expenses when they occur. Why a ROI on top of what the ratepayers have already, or currently or, paying for.
Two examples of ROI's are given in this slide show. One being San Antonio's Electric utility which subsidizes their general fund by about 14% and Austin Electric who subsidizes their general fund by about 12% of their total revenues. This being the case how come San Antonio can sell electricity to their residential customers for about 9.5 cents per kwh and Austin about the same and GP&L charges 12.7 cents per kwh? 3 cents difference per kwh relates to about $30.00 per month less for a 1000 kwh user. For a summertime 2000 kwh user this amounts to $60.00 that GP&l is higher than either San Antonio or Austin.
07/21/07 @ 20:00
07/23/07 @ 14:47 Comments are closed for this post.
