City raises fees instead of property taxes

Proposed utility fee increases could cost Carson City residents an extra $16 a year at today's rates.

And there is potential for several more utility fee hikes.

Carson City supervisors last week set in motion a plan to add $410,000 to their $45 million budget by increasing utility franchise fees.

The money will be used to pay for 10 new employees or expanded positions, five of which are in the city's emergency dispatch center.

For the first time, supervisors declined to raise at all the city's property tax rate.

Last year and in 1995, supervisors took less than the 6 percent increase they're allowed. A 5.5-cent property tax increase -- 6 percent -- this year would have cost property owners $19.25 extra for a $100,000 home, but supervisors decided instead to raise revenue from fees.

Unlike property taxes, however, charges for franchise and utility business license fees can't be deducted from federal income taxes.

Carson residents on average pay $77.03 a month for electricity from Sierra Pacific Power Co., said company spokesman Karl Walquist. The city is renegotiating the troubled power company's local franchise agreement, and a 1/2 percent increase to franchise fees would cost residents an extra 39 cents a month, $4.68 yearly.

Meanwhile, Sierra Pacific is requesting from the Public Utilities Commission on Monday a 3.5 percent increase in power rates, which would raise average residential rates $2.68, pushing average bills in Carson to $79.71.

Carson's 1/2 percent fee increase, though, is subject to negotiation in a year.

"It's not something we just accept," Walquist said. "It is something that is subject to negotiation."

As for natural gas, the average monthly bill in Carson City is $77.28 (rising to more than $120 in the winter, falling to a fraction in the summer months).

Carson City negotiated a 25-year agreement with Southwest Gas in 1994, which has a provision that allows up to a 1 percent hike in business license -- not franchise -- fees this year only if Sierra Pacific's fee is increased.

Southwest Gas attorney Bob Johnson said the utility wouldn't oppose the fee increase, which would mean an extra 39 cents per bill or less than $5 a year.

"It's a straight pass through (tax) from our perspective," he said. "It's a true tax from the local governments. If Carson City wants to tax their constituents through their utility bills, that's their decision."

Water and sewer bills in Carson average $56.25 a month, and supervisors decided to charge their own utility a 1 percent franchise fee. It will cost about 56 cents month, or $6.72 a year. However, city leaders recently started the first sewer and water rate study in 12 years, which could lead to the city's first utility rate hike in seven years.

Other taxes are also headed to Carson City utility bills. City leaders are planning a 25-cent surcharge for every phone line, which can be used to fund the 911 emergency system.

Also, the city's storm drainage advisory committee is studying rates to determine how much each resident should pay to fund storm-drain improvements. The proposed rates, estimated between $2.50 and $5 a month, should be ready for supervisor consideration in June.

Residents are being asked to help pay for a $20 million storm drainage system, which will cost between between $1.3 million and $1.7 million a year if it is to be completed in the next 18 to 20 years.

Franchise fee increases, by utility

Utility average bill average increase per month

Sierra Pacific $77.03 39 cents

Southwest Gas $78.28 39 cents

Carson City Sewer and Water $56.25 56 cents

total: $1.34/month $16.08/year