Minutes 06/09/1970 - Laserfiche WebLink

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June 9. 1970 What troub~m us most is the fact that loading taxes on electric bills makes customers reluctant to expand their service, thus retarding increased use of electricity. We depend on increased uses of ~lectricity that balance load to keep our rates low and are vigorously promoting electric heating to help accomplish this. Vepco would not be opposed to a utility tax ordinance that provided reasonable ceilings and rates. It has no objection to utility service bearing its fair share of the local tax burden, and we are c~rtainly aware of the city's need for additional tax revenue. However, we feel that the proposal to increase the ceiling on residential electric utility service and to increase by 500% the ceiling on commercial and industrial services imposes a discriminatory tax on users of such se~¢ices, particular- ly for those customers using electricity for heating purposes. The proposed 42% increase in the ceiling on our residential customers would have the effect of taxing the entire bill of the majority of our residential customers at 20*0, while some competitive fuels, such as oil, are taxed only at a 4% ra~e under the consumers sales tax law. Increasing by five times the ceiling on the bills of commer- cial and industrial customers, thereby taxing the entire bill of the majority of these ~ustomers at a 20% rate, will deter industry from locating in the City of Portsmouth at a time when the City is vigorously promoting industrial expansion. This will increase the tax on a substantial number of in- dustrial and commercial customers from $480 to $2,400 annually. We submit that this proposed increase in the tax on top of the $$ 1/3% increase in 1967 is difficult to justify to those who must pay it, particularly when the increase occurs in such a relai~ve.ly short period of time. At the session of the General Assembly just completed, legislat~bn was introduced to place a maximum of 10% on the ~tility tax rate and a ceiling of $10 on the amount subject to tax on monthly bills of residential customers and a ceiling orS100 on the amount subject to tax on monthly bills of commercial and industrial customers. Such legilation also provided for reduction to that rate and ceilings where higher rates or ceilings were in effect. While the proposed legiglation was not enacted, it shows an increasing concern over this problem. It will likely.be introduced amd hopefully enacted at some future session of the General Assembly. In conclusion, we feel that We must protest the proposed increase in tax ~n our customers' bills. At:rate of 20% on an essential service, not a luxury item, particularly where reasonable ceilings are not imposed, imposes a discriminatory tax on users of utility services." The following letter from the City Manager was read: "I submit herewith the budget estimat~s.~fthe General Fund, Public Utilities Fund, City Garage Fund, Capital Improvement Fund and the Law Library Fund for the operation of the City Government during fiscal year 1970-71. It is estimated ~hat it will cost $$4,18S,686 for general governmental operations during the fiscal year. This represents an increase of $S,S71,$S6 or a 19% rise over the 1969'70 budget. Even with the 19% increase reflected, departmental requests have been reduced by about $3 million, and practically all requests for new equipment have been eliminated. While theincrease is substantial, the majority of additional fund needs falls into three categories: Educational costs are increased $1,149, 5~0; Welfare, $1,806,255; and, Debt Service, $1,102,42~. These in- creases total $4,0S8,0S4. The remainder of the increase in the 1970-71 budget is $~,515,302. Most of t~is amount provides for a salary and wage increase for all employees, plus funds for additional personnel required for operating the ne~ Civic Center complex, the Health and Welfare Departments. There also are small increases in the cost of contractual services, fixed and sundry charges, and material and supplies. To provide a 6% pay increase for all employees under the Personal Services categorM, other than those paid jointly by the City and Stat~, $560,000 will t~e required. There is also a $210,000 increase covering employges paid by the State and City. This includes 30 addi- tional personnel, 14 of which are new deputies for the jail, nine employees in the Department of Social Service~, and 7:~n the Health Department. Additions in Social Service are to meet State requirements, based on increased workload. For the information of the City Council, amd our employees, the 6% pay increase under Personal Services category, and fringe benefits that the City offers, keep ns in a favorable position with our area political subdivisions. There is an increase of 11 positions in other budget categories. This includes an additional Assistant City Attorney, a Budget Analyst recommended by the Public Administration Service study, a Probation Officer for the Juvenile Court, a No--od Facilities Coordinator, and several clerical positions. Also provided is a minimum rate of $1.95 per hour for all new hourly employees as a Rrobational rate for six months. After that time, the employees must receive a rate of $2 per hour. Ail present hourly employees will receive no less than the $2 rate, effective July 1. A 6% pay increase is provided for all Fire and Police personnel, along with a change in the compensation 'plan, reducing the present 10-year step to a 7-year s~ep. Also, a $~00 monthlf spread has been established between the ranks. There has been no change in the classified plan for other Citf employees, other than the 6% pay increase. Additional vacation benefits are recommended, granting employe, es with seven years' service two additional days; 10-year employees, three, additional, days; iS-year employees, fi~e additional days; and 20-year employees, seven additional days.