Council considers $16.69 million budget Monday

Posted 6/16/11

For a number of years, the city of Powell has charged a franchise fee to private service providers — MDU, Qwest (soon to be CenturyLink) and Optimum (formerly Bresnan) — ranging from 3 to 5 percent. But for the first time, the city plans to …

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Council considers $16.69 million budget Monday


Proposed budget includes franchise fee on city utilities

Looking to bolster general fund revenue and offset a roughly $275,000 operating deficit at the Powell Aquatic Center, city of Powell leaders plan to begin collecting a franchise fee from city utilities.

The proposed 4-percent franchise fee for the city’s four utilities is among the changes from the past year in the city of Powell’s 2011-’12 budget, which is slated to be finalized by the Powell City Council on Monday, June 20.

For a number of years, the city of Powell has charged a franchise fee to private service providers — MDU, Qwest (soon to be CenturyLink) and Optimum (formerly Bresnan) — ranging from 3 to 5 percent. But for the first time, the city plans to begin charging a 4-percent franchise fee to the city-run enterprises — sewer, water, sanitation and electricity.

That would generate a projected $404,463 for the city’s general fund for the next fiscal year and offset a roughly $275,000 aquatic center deficit in the general fund. The new fiscal year begins July 1 and ends June 30, 2012.

“With the new 4-percent franchise fee, the budget — including the pool — will be balanced,” said City Administrator Zane Logan in an email.

Following a public hearing at 7:05 p.m. Monday, the Powell City Council will consider approving a $16.69 million operating budget for the 2011-’12 fiscal year. The budget ordinance — which includes the 4-percent franchise fee for city utilities — has successfully passed two readings.

If approved, the 4-percent fee would be applied to the gross billing of the city’s four utilities.

“The city is trying to find more ways to bring money into the general fund when the revenue stream for the general fund from the state is constantly being reduced as costs continue to rise,” said Thorington in an email. “The franchise fee is being proposed to offset the deficit in (the) general fund. All of the departments in (the) general fund help create the deficit as the general fund departments are not enterprises that can help create income for the city.”

Money to pay for the proposed 4-percent franchise fee will come from enterprise reserves or operating funds rather than a rate increase for city residents, Thorington said.

“At the present, the rates are not going to be increased in the enterprises for that specific reason,” Thorington said in an email.

However, rates could be increased to cover the proposed franchise fee at some point down the road.

City residents have seen several increases to their utility bills in the last few years.

Last week, the Powell council approved sewer rate increases —15 percent for commercial customers and 12 percent for residences. City officials cited higher operating costs, such as more testing requirements for waste water at the lagoon, as a main reason for the rate hikes.

The council approved a 10 percent electric rate hike in March, passing along a wholesale increase from the Wyoming Municipal Power Agency.

City officials also are considering eventually increasing water rates because of the overall operating costs and maintenance, including depreciation.

Earlier this spring, Powell leaders discussed the franchise fee idea with officials from the city of Cody, which has charged franchise fees to its water, waste water, solid waste and electric funds since 2003.

Originally, a 2 percent fee was charged to all of Cody’s enterprise accounts, according to Cody City Administrator Jenni Rosencranse. In the coming fiscal year, Cody plans to assess its enterprise funds a 5 percent fee (the same charged to Bresnan and TCT), with exception of a 3 percent fee for electric.

Aquatic center deficit

In early discussions with the Powell City Council last month, Logan said the proposed 2011-’12 budget was balanced “with the exception of the aquatic center.”

For the current fiscal year, which ends June 30, pool operations ran about $400,000 into the red, Logan said. The aquatic center opened to swimmers in May 2010, but closed for two months this spring for aesthetic repairs to the pools’ surface and annual maintenance.

For the next fiscal year, city leaders estimate an operating budget of around $686,000, with $410,505 of revenue — leaving the roughly $275,000 deficit.

Funds generated by the 4-percent franchise fee on utilities would cover that deficit.

The city also plans to raise pool rates for admission, lane rental and memberships.

“We’ve got to do something,” Logan said.

The city is working on contracts with Park County School District No. 1 and the Powell Swim Club to determine rates and usage, Logan said.

Increases for the base membership and admission fees for the general public will take effect Oct. 1. However, Logan said pool members who signed up during the aquatic center’s first year are considered charter members, and may be able to renew their memberships at the current rate.

Logan said the aquatic center is an asset to the city and citizens of Powell, and he understands the city needs to support it, but said the general fund’s support for the facility “has to be a reasonable amount.”

Currently, the aquatic center has 789 annual members and 501 punch-pass holders.

Park County voters approved a 1-cent capital facilities tax in 2006 to provide $7 million toward the ultimately $10.3 million aquatic center and a $2 million endowment. The sales tax also provided $2 million toward Meeteetse’s pool and $2.2 million for the Park County Library in Cody.

The actual principal of the aquatic center’s $2 million endowment cannot be spent on operating costs, but rather, just the money generated through interest. The pool also has a $500,000 endowment through the Moyer Foundation. It is estimated two endowments will provide $62,800 toward the pool’s operating costs for 2011-’12.

Wage freeze thaws

City employees did not receive raises in the current fiscal year, but the proposed 2011-’12 budget includes salary increases based on the city’s new personnel evaluation program.

“The program uses a series of procedures, processes and formulas to determine each employee’s merit level and advancement,” Logan wrote in his 2011-’12 budget message last month.

Raises will range from zero to 5 percent, based on the employee’s evaluation, performed on the anniversary of when the person was hired by the city. Because raises are not done by the fiscal year schedule and vary by individual employees, Logan said it’s hard to know exactly how much it will cost the city next year, but estimated around $35,000.

Employees also will receive a cost of living adjustment of 3.8 percent — the amount the northwest Wyoming region’s cost of living rose in the past year, according to the state’s Economic Analysis Division. The cost of living adjustments amount to about $62,000.

The 2010-’11 fiscal year budget did not include raises or cost of living adjustments.

The proposed 2011-’12 city budget also includes paying half of a 2.87 percent increase in employees’ retirement funding — a hike required by the Wyoming Retirement System. Just like last year, employees will pay the other half.

The city also will relax its hiring freeze from the past year. Though the city will again add no new positions, employees who retire or quit may be replaced.

The city is currently hiring to fill a couple of full-time vacancies.

“We’re only trying to maintain a minimum,” said Thorington.

The city’s management team has worked closely to share employees where possible, reduce the number of employees for the aquatic center and reduce the need to hire replacements, Logan said.

“However, any reduction in staff due to retirement and attrition will have to be filled,” Logan wrote in his budget message.

Logan said in recent years, the city’s staff has been reduced by several full-time employees who were not replaced, even though the city’s responsibilities have increased — with a population that has grown 17 percent in the past decade, the developed west-end and second water tower.

“This has placed more use and strain on basic city services and infrastructure,” Logan wrote.

Copies of the preliminary city budget are available at City Hall, the Powell Branch Library and online at under the “Links” tab.