BY LOUISE R. SHAW
Clipper Staff Writer
KAYSVILLE - City leaders are still assessing the fallout from the passage of Proposition 5, which prevents money from the city’s power fund from being used for other needs in the city.
The measure passed narrowly, with 2,810 in favor and 2,224 against its passage.
“Naturally, we have concerns about the impact on city budgets,” said Mayor Steve Hiatt after the measure’s passage. “We've said we will support the outcome regardless, so we are.”
The measure restricts all revenue from the Kaysville Power Department to direct operations of the power department and an emergency fund. All excess revenue, according to the measure, is to be redistributed to customers based on their “proportionate use per anum.”
Because the city budget year runs from July to July, there is no immediate impact and no need for a mid-year budget amendment, according to Hiatt.
But the city council will need to work with the authors of the proposition to “add clarity and provide definitions which it doesn’t have currently,” he said.
He said the first step is to determine the definition of an emergency fund and whether or not it includes a rate stabilization fund.
“Clearly the intent was to have excess revenues redistributed,” he said. “It’s much more logistically complicated than just distributing it back. It will be a monumental task to come up with that calculation.”
One question is whether to distribute refunds equally to homeowners who have lived here 13 years, or 40 years, or two months, he said.
“There are some real definition problems,” said city manager John Thacker. “The city council has to give us some definition, some clarification of the law that was enacted by initiative.”
Taxes will likely need to be go up, said Thacker, because after a recent audit, the city is now required to pay the electric company for its electricity use.
“It may end up that we’ll have to raise power rates too because the law enacted by initiative does not contain provision for working capital, so we’ll have to have high enough rates to raise the funds each year to do capital improvement on our system and other work we need to do,” he said.
City residents concerned that some money was being transferred from the power fund to the general fund placed the initiative on the ballot.
They also objected to the use of power funds for the purchase of land off Flint street to hold in reserve for economic development, a move city council members said simply changed cash assets to land assets until the land was again sold. Sale of the land is now pending.
“It’s going to take us some time to work through the implementation” of the proposition, said Hiatt. “We’ll work with the proposition authors and the city council to meet the spirit of the proposition but also make it legal and clear for the future city councils to follow.”