Scott Wedel: Public vote is needed
September 27, 2012
The Oak Creek Town Board's proposed 2013 budget currently is planning on taking $106,155 from the electric utility, $17,900 from the water utility and $50,250 from the sewer utility as "management fees" for use in the general fund. This "management fee" is in addition to a 25 percent increase to the amount charged to the utilities for operating expense and salaries for their share of town buildings and staff time.
This proposed, newly created management fee more than doubles the tax burden on Oak Creek residents because it is greater than projected revenues from property and sales taxes combined. This radical change is being proposed without voter approvals. For all practical purposes, this is the same as doubling local taxes because utility rates are set by the Town Board, so now the rates will depend upon how much money the Town Board wishes to transfer into the general fund.
This proposed change to charging the utilities "management fees" is not a common practice for government utilities. Typically, government-owned utilities are operated for the benefit of residents, not the benefit of town government. Steamboat Springs and Hayden city utilities do not subsidize their general funds. It is unprecedented for any town to transfer more money from utilities to the general fund than is collected from property and sales taxes combined.
It simply is ridiculous for Oak Creek town government to claim that the utilities have copious extra revenues to subsidize the general fund so significantly. The water and sewer utilities have huge infrastructure issues and cannot afford transferring such sums to the general fund. The water district is unique in the state of Colorado for not having water meters on commercial customers and billing based upon usage. The town acknowledges having old, corroded and leaking water lines that need to be replaced.
I think that if town government is going to make such a radical change to the operation of the utilities and transfer such large amounts to the general fund, then the Town Board needs to put this to a public vote. The recent 1 percent sales tax increase that failed at the ballot was projected to raise about $30,000. The Town Board now is proposing a $180,040 transfer from the utilities without a public vote.