Marietta City Council’s practice of taking utility revenues paid by customers and shifting them to the city’s general fund, which pays for city services and salaries, is a tactic critics have said causes water and electric rates to be raised each year.
The Marietta Board of Lights of Water, which governs the city-owned utility, unanimously approved decreasing the city’s transfer by $1 million at Monday’s meeting.
The City Council will decide whether to ratify the vote Wednesday.
About $11.5 million was transferred from the Marietta Board of Lights of Water to the city’s general fund budget last year. It’s a way to keep property taxes down, some officials contend, without having to sacrifice services.
The transfer became a point of controversy last December when BLW officials struggled to close a $5 million deficit created by higher costs from the utility’s power wholesaler, the Municipal Electric Authority of Georgia, and its water supplier, the Cobb County-Marietta Water Authority.
Board members opted to take the hit in part by not raising power rates but instead hiking water rates by 10 cents per 1,000 gallons used at the beginning of this year.
“Our supplier raised our cost $5.3 million and we chose not to raise the rates, but it was a speculation, a risk if you will, that we can survive it,” said Mayor Steve Tumlin, who also chairs the BLW.
Councilman Philip Goldstein raised concerns Monday evening about the utility board’s vote, asking where the city would come up with the $1 million.
Tumlin said having City Council approve the BLW’s actions is a “check and balance system.” Though Tumlin plays dual roles both as mayor and chairman of the utility, he said the BLW sees reducing the transfer as a way of asking the city to become partners.
“We just thought that the city ought to participate with us,” Tumlin said.
The decision came out of discussions about the utility’s fiscal 2015 budget, which was presented to the board Monday.
“I’ve been a proponent — a very meek and quiet one — and this was just the perfect opportunity,” Tumlin said.
City officials will revisit the draft budget tentatively set to be adopted by council in June to compensate for the loss of $1 million.