Minutes 05/12/1959 - Laserfiche WebLink

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At a regular meeting of the City Council, held on May~t2th, 1959, there were present: B. W. Baker, A.C. Bartlett, W.R. Breedlove, R. B. Seward, R. Irvine Smith, George R. Walker, .H.E. Weiseman, A.P. Johnson,Jr., City Manager, and J.S. Li~esay, Jr., City Attorney. The meeting was opened with prayer by Mr. Weissman. Minutes of the special meeting of APril 27th, 1959 were read and approved. Minutes of the regular meeting of April 2Sth, 1959 were read and approved. The Mayor recognized a group of students from Harry Hunt Jr. High School. The following reports from ;the City .Manager .were read: 59-122 - "Mr. Jake Jacobson, Attorney, has reqnested to be heard in reference to the license tax on automatic washing machines. This license nax was adopted last month by the City Council." Mr. Jacobson spoke regarding the matter. On motion filed. 59-123 - "I submit the attached ordinance and recommend that it be placed on first reading. This amends the Utility Tax Ordinance, changing it to a Capital Improvement Fund and increases the rate from 10% to 15%, but it also limits the tax to the first $6.00 on gas service and the first $12.00 on electric service for residential pump~Q~.._ ~h~ye is also a limit of $200.00 on commercial and industrial rates. If thi~ ordinance is approved, the funds would be restricted to Capital expenditures only and could not be used in the operating budget. We will begin immediately on a program of drain- age and curbs and gutters expending approximately $250,000.00 annually. Under this plan we will be starting on ourCapital Improvemen~ Program which should satisiy certain other long standing and well recognized needs." Motion of Mr. Bartlett ~o suspend the rules to hear from interested persons, was adopted The following spoke: Mr. Robert Shiflett, representing the Chesapeake & Potomac Telephone Company. Mr. Louis Keller Mr. Allan Hadfield, representing Virginia Electric & Power Company. Mr. Shiflett presented the following: "Your Telephone Company fully realizes the necessity of maintaining a strong and pro - gressive municipal governmenn. To do otherwise would be contrary to the best interests of its citizens. As a good citizen, my company has, ~n the past, and will continue in the future, ~o assume its fair share of the finaz cial burden of the City. Facts show that Portsmouth telephone customers are now paying more than their fair share of the cost of City government. For the 10-year period from 1948 to 1958 taxes paid by telephone custom- ers in Portsmouth have increased more than one and one-half times the increase in the city's budget. You are aware that the city imposes a 10% excise tax and a 3% gross receipts tax on telephone bills for local exchange services. The State of Virginia levies a 3% receipts tax and the Federal Government imposes a 10% consumer's ~ax. Stated another way, ~axes based on the % of revenue already take 26~ of every gross dollar paid to the Telephone Company for local telephone service. The proposed tax will bring this up to 319 of every gross dollar paid to the Telephone Company. This is in addition to_-property and many other taxes imposed on the Telephone Company. During 1959 the City will receive from the Telephone Company about $264,000. Of this amount $143,500. comes from excise taxes and the remaining $120,500. comes from property and other taxes. I am certain that these facts show that the present tax burden on Portsmouth telephone customers ~s already excessive and should not be increased." Mr. Kadfield presented the following: "My name is Allan S. Hadfleld, and I am Manager of the Portsmouth Area of the Virginia Electric & Power Company. As a good citizen of every community we serve, Vepco can not be opposed to taxes in general. They are a necessity for the maintenance of government. There are, however, many ~ypes of taxes, and it is not unreasonable no consider that they are not all goodi Vepco is opposed to this ordinance which increases the nax already imposed on electric bills. We have always been against this Eype of tax because it is a discrimi- natory sales tax against users of utility services. Most sales taxes are designed to take 2 to 3 per cent on all items, particularly luxury items, but by this action you are planning to impose a 15 per cent levy on utility services which are basic necessities in this day and age. The Federal, State and local taxes paid hy Vepco last year, not including excise taxes of the type under discussion, amount to over 22 cents of each dollar of revenue. If this tax levy is passe( nearly 1/3 of each dollar the residents of Portsmouth pay for electric service will be for taxes. A point too often overlooked is that a~large number of customers will .think electric .bills are being increased instead of their taxes. This effect is a serious one to .us in that customers.tend ~o become reluctant ro expand their elec- tric service use. They postpone their purchases of new equipment which action affects not only VepcoLbut also electric appliance dealers, contractors and others %vho benefit in many direct and indirect ways from increased use of.electric service. -In times Lof inflation where the prices of everything tender,to skyrocket as they have during the last fifteen years, we have depended upon increased usage of electricity to keep our rates low. We constantly rev~e~ our engineering, construction and accounting practices to find ways to privide better service at the lowest possible cost. The cost of administering and collecting taxes ms a considerable burden on ~epco. It is also somewhat a deterrent to industry to have a tax on their electric hills.