JAMESTOWN – The projected property tax increase in the city of Jamestown’s 2016 budget now sits at 4.06 percent. The Jamestown Board of Public Utilities on Monday approved giving the city a $482,000 dividend payment for next year following a 6-2 vote.
The $482,000 payment is $232,000 more than what Jamestown mayor Sam Teresi had proposed in his initial 2016 budget. That’s because the Jamestown City Council, during closed-door budget deliberations last week that were not open to the public, came to a unanimous decision to request $482,000 – the same amount the BPU gave the city for the current fiscal year.
City Council president Greg Rabb said the additional $232,000 will bring down the projected tax hike by 1.5 percent.
“[The $482,000] is almost double what the mayor requested, so it does have an effect on the budget. I think the the tax increase – whatever it might work out to be next week – might be much worse if we didn’t have the additional funding. So it does help a lot,” said Rabb, who also sits on the BPU.
The BPU spent more than 90 minutes discussing the dividend payment before acting on it, with board chairman John Zabrodsky, board member Carl Pillittieri, and general manager David Leathers saying the don’t support the payment because it would deplete the BPU reserves in either the electric or water divisions. If taken from the water division, it would create a rate increase higher than the 2.3 percent already being projected. If taken from the electric division, it could compromise a future 2.5 percent electric rate increase currently being considered by the state Public Service Commission (PSC).
The BPU was going to act on finalizing and approving its 2016 electric and water division budgets but held off following a request by Teresi, who wants to first find out if there could be any further cost saving measures in the water division budget before it is finalized. The issue of whether or not taking money from the electric division would impact the PSC rate case is something he also felt should be investigated further.
Rabb agrees it wouldn’t hurt to hold off on approving the two division budgets.
“There was much discussion about how we were going to handle this and I believe we tentatively committed to Dec. 7 as an additional board meeting for the BPU so that we could deal with the electric and water divisions, with the mayor making the point that now that we’ve agreed to the $482,000, can we go back and take a look at the budgets and make sure there isn’t something else we can ring out of the budget so we don’t have to talk about a rate increase.”
Both Zabrodsky and Pillittieri voted against giving the city the $482,000 dividend payment. BPU members voting in favor of the resolution included Teresi and Rabb, along with Chuck Cornell, Maria Jones, Jeff Lehman, and Martha Zenns. Board member Wayne Rishell was absent.
CHAMBER SPEAKS OUT AGAINST DIVIDEND PAYMENT
Prior to discussing the dividend payment, several members of the public addressed the BPU, including Chautauqua County Chamber of Commerce and Manufacturers Association president Todd Tranum. Tranum criticized the board for approving dividend payments in past years, saying it’s the reason why the BPU electric division had to file for the rate increase request with the PSC.
“Based on our reserach and looking at the numbers, the current rate increase submitted by the BPU is absolutely unnecessary,” Tranum said. “It is an indirect tax driven by the city of Jamestown, taking money from this utility.”
Tranum also told officials that if they continue to profit share with the city, it would continue to force the BPU to increase its rates, causing it to lose its edge as an affordable utility provider to both residents and businesses not only in Jamestown, but the entire service area including the communities outside of the city.
Tranum also pointed out that the BPU already pays $3.5 million a year in the form of tax equivalent payments, adding that the dividend payments are excessive.