Alderman voices concern about rates


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Alderman voices concern about rates

By SUE WATSON
Staff Writer

Alderman Russell Johnson has expressed concern about the rising costs of utilities in Holly Springs.

He said his concerns about write-offs of delinquent bills and the tax equivalency the city collects on utilities got his attention last summer while the new budget was being worked out.

The tax equivalency the city has collected on the electricity side has steadily increased over the period of 1993-2012, beginning at $550,000 in 1993 and up to $1.75 million in 2012.

The increase over the 19-year period was reported to be 318 percent and 289 percent over the last 10 years.

All totaled, the Holly Springs Utility Department has collected $17.5 million in tax equivalencies over the last 19 years from the electric side, which has been folded into the city’s general fund, according to figures released recently to the board of aldermen.

Johnson said he became concerned about how the city could help reduce people’s utility bills.

“Our cost is not what TVA charges HSUD, so it has to be something we are doing here,” he said. “I really started looking at the steady increase in tax equivalency more closely when we were preparing this year’s budget. Our taxes (ad valorem property taxes) are not really going up. Our service is going down. Since we got concerned about the utilities, this really started to concern me.

“What made us the highest somebody in Mississippi?”

He said the 37 percent in tax equivalency from the electric side of the utility that goes into the general city budget is a concern. He also is concerned about the high cost of utilities in general, he said.

“I think people need to deal with reality,” he said.

The public debate around the utility department’s retail rates and its policy dealing with delinquent utility bills was expected to be a hot topic of discussion at the November 20 meeting, Johnson said.

Tax equivalent dollars from the electric department that were included in the city’s general fund budget beginning in 1993 and moving forward to 2012 were:

$550,000 - 1993
$550,000 - 1994
$591,250 - 1995
$605,000 - 1996
$605,000 - 1997
$605,000 - 1998
$605,000 - 1999
$605,000 - 2000
$605,000 - 2001
$605,000 - 2002
$713,750 - 2003
$937,500 - 2004
$1,000,000 - 2005
$1,000,000 - 2006
$1,000,000 - 2007
$1,225,000 - 2008
$1,225,000 - 2009
$1,386,882 - 2010
$1,640,848 - 2011
$1,750,000 - 2012

Officials with the Tennessee Valley Authority said recently that the tax equivalency in Holly Springs for the electric side of the utility has nearly reached the maximum the city is allowed to collect by law.

In addition to the information above, the City of Holly Springs submitted a budget for fiscal year 2012-13 which projected the following revenues that would be paid by consumers:

• $584,406 from household garbage collections.

• $2,686,666 in tax equivalencies (includes $1.75 million collected on electric bills).

• $1,619,500 in ad valorem property taxes.

The complete budget including projected revenues and expenditures was published in The South Reporter, Sept. 27, 2012, issue, page 13.

Holly Springs Utility Department’s annual budget is unpublished.

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