Plan for power bill hike losing steam in East Point

A City Council debate last week, meant to find consensus, revealed most members were skeptical of the plan as a way to recover the costs of providing the utility.

At issue was the lack of specific projects to be funded by the money raised and the amount of cash the utility transfers yearly to the general fund.

“I’m a little confused over the necessity of a power cost adjustment,” said Councilwoman Sharonda Hubbard. “It’s kind of hard to say, ‘yeah, let’s go for it,’ when I still don’t know what projects it will go for.”

Staff has recommended the increase, which would bring in about $1.8 million a year, to cover a shortfall in what the city thought it would make selling its excess power on the open market.

It is the second year that the cost of power exceeded the budget. So even though about $1 million could be raised between July and December, the city faces a $3 million deficit for the service.

“That’s money down the drain,” city Finance Director Jim Schuster said.

In an effort to sweeten the deal, the proposal also includes a $10 monthly discount for customers aged 65 or older. That senior discount would remain, even if the adjustment dropped as revenues pick up.

Council members appear unmoved, however. One source of friction has been money transferred from the utility funds, including electric, to the general fund, used for basic city functions.

Some money has to be transferred to pay for administrative and other duties performed by the city. But the city’s annual audits highlighted the transfers -- nearly $9 million in 2008 and nearly $4 million in 2009 -- as inconsistent.

There is no city policy on how much each fund should transfer for its costs yearly.

“We have the money for the utility, but there is no need for a rate increase just to keep transferring more money to our general fund,” Mayor Earnestine Pittman said.

The proposal could come up for a vote at any time, though it was not on the posted agenda for Monday's meeting.

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