City budget holds good news for utility customers
Barring an unexpected rise in natural gas prices, Plaquemine City Light & Water customers can look forward to another year of lower electricity prices, the newly adopted 2010-11 city budget shows.
This year, City Light will not contribute to the city's government operations, a move that also could help keep rates lower, Mayor Mark A. “Tony” Gulotta said.
“We don't make a tremendous amount on utilities like people think,” he said. “We make enough to run our operations. Let the city stand on its own. It helps us keep our rates more at cost.”
City Light will continue to pick up the tab for lighting city buildings, plus the Plaquemine Lock State Historic Site as part of a local-state effort to keep the landmark open to the public, Business Manager Laurie Berthelot said.
The Board of Selectmen last week adopted the $37 million budget, which includes $7 million for general government operations, some $13 million for the utility system and $10 million in capital outlay projects, plus the bond-funded $10 million citywide road program.
This year's capital outlay projects include $1 million to convert the old Nadler Foundry into a pavilion and $120,000 to add floating piers at Bayou Plaquemine Waterfront Park, as well as $250,000 for a new roof and windows at the City of Plaquemine Activity Center (COPAC).
For the first time ever, the city council adopted the budget before the November 1 start of the city's fiscal year, Berthelot said.
Gulotta said he and Berthelot started on the budget in August; not having to consider employee pay raises sped the process.
Hikes in payments to state retirement systems for police and firefighters totaling $177,000 preempted raises for city employees, the mayor said. He said word from the retirement systems on Friday was that the increased rate is likely to continue for the several years because of combination of stock market losses and “benefits being too rich.”
On the other hand, the city has the money to pay the additional toll without having to cut jobs.
“We were able to pick up those costs,” Gulotta said. “Other cities are having to cut positions.”
He said he met with eight other mayors last week six of which had to cut jobs to pay for the increase. Plaquemine had a surplus available this year because sales tax revenues were higher than had been projected, the mayor said; that might not be the case for the next fiscal year.
“The richest corporations in the world only pay five percent of payroll [for retirement]. We pay 30 percent,” the mayor said. “...If this was a private retirement and not a government retirement, we'd be bankrupt.”
Berthelot said the increases amounted to 21.5 percent for firefighters' retirement and 20 percent for police.
Sales tax revenue totaled $5.8 million last year, a new record high. The conservative projection for the new fiscal year is $4.9 million, with proceeds mainly dedicated to financing the $10 million citywide road program now underway and sewer improvement programs.
Some budget entries show the effects of the national recession on the local economy:
Revenues from building permits fell to $9,200 in the 2009-10 fiscal year. That is down from nearly $28,000 in 2008-09 and a five-year high of $36,357 in 2006-07. City Inspector Brandon Melleion said building has slacked off. Permits are projected at $10,000 this year.
Building and occupational licenses are expected to bring in $370,000 this fiscal year, the same as last, down slightly from a five-year high of $375,000 in 2008-09.
Video poker receipts are projected at $47,000. The highest collected over the past five years was $53,000 in 2007-08.
The budget also showed the city expects to collect only $12,000 in traffic fines this fiscal year, about $5,000 more than last year, but less than half the $25,600 collected in 2005-06.
Police Chief Orian Gulotta said his department has concentrated more on solving burglaries and violent crime, including a recent murder and less on writing tickets.
City Light budget
City Light charged customers some $13.3 million for all utilities last year, and projects billing of $100,000 less for this year.
The highest bills went out, totaling $15.9 million went out in 2007-08, a year when high natural gas prices drove up the cost of electricity, the largest part of customers' bills. Natural gas, of course, is used to fire many electrical generating plants.
Electrical use has stayed about the same, Berthelot said, but the city spent some $2.7 million more to buy electricity from the Louisiana Energy and Power Authority (LEPA) in 2007-08 than it did last year or expects to spend this year.
Gulotta said LEPA predicts natural gas prices will remain stable at $4 per thousand cubic feet over the next two years.
“That could change next month,” he added.
Without having to make a transfer to support the general city government, City Light's electrical department is projected to make a $1 million profit this year. Profits from the natural gas and water departments are tapering off to a projected $70,000 and $195,000, respectively.
Sewerage operations, which traditionally have been supported by water sales, are projected for a record loss of nearly $800,000 this year.
The city has a consulting firm looking into restructuring city utility costs, which city officials hope will include operating and maintaining the new sewage treatment plant they hope to build on land they purchased off Tenant Road.
This year's budget includes $1.1 million for general government, $2 million for the police department, $1.17 million for the fire department, $1.6 million for recreation, $1 million for public works, nearly $500,000 in federal housing assistance payments, and $330,000 for Plaquemine City Court (which generates its own additional funds), including a $600-a-month raise for City Marshal Bronco Wilbert.