Editor’s Note: Last Friday, the Sun published a story reporting on George Szigeti’s presentation to the Truth or Consequences City Commission on alternatives to the direct transfer of utility enterprise funds to the general fund.
Chief reporter Kathleen Sloan sent former city commissioner Szigeti the following follow-up questions. His response is printed verbatim below her questions, which are presented in their entirety here.
You did not include in your evaluation any city-management, cost-benefit analysis or cost-savings analysis. One can either cut back expenses by $1.5 million or find the money elsewhere, but your presentation only gave one cutting-down-on-expenses option, which was dismissed as no option.
For example, a cost-savings option might examine how much the city would save by fixing the nearly 20 percent transmission loss of electricity. Since the city makes over $7 million in fees, 20 percent energy saving is about $1.4 million.
Or how much would the city save if it let the recycling function go at the transfer station, letting private business pick up that service? The solid waste utility costs have risen astronomically to over $2 million. The service has also not been put out to bid by the city since the transfer station was built.
Your only cost-saving option was to suggest that 30 staff members would have to be cut to make up $1.5 million. You said you spoke with city staff and they said they are short staff now, therefore this option was not feasible.
Please comment on why the options were narrowed to finding money elsewhere, with no cost-savings options.
Please also correct me if I am wrong. What I think you said was the current electric adjustment charge is currently .0412 cents per kilowatt hour. You would call .0037 of this charge a “use tax,” which would generate how much a year? $340,000? And there would be no change in the electric bill?
I can see by your questions that you totally missed the point of this presentation. It was not a suggestion, but rather a quantitative analysis of the problem and of the most obvious solutions.
The first part, which you have focused on, was not directed at the commissioners, but rather the residents of T or C. It was not meant to be a list of cost-cutting measures, but rather an illustration of the magnitude of the budget deficit to help the citizens understand how difficult it is to reduce expenses by this amount. City managers and department heads have been working on this for years, and former City Manager Fuentes had already shaved over $500,000 off the city’s budget.
Also, I made it clear at the beginning of the presentation, that the city’s operational budget of $6,000,000 does NOT include the utilities, as they pay their own expenses and salaries. Therefore, none of the suggestions you list would have any effect on the city’s operational budget.
The remainder of the presentation showed alternatives to the direct transfer of funds from an enterprise fund to the general fund. I have heard constant protests about how this practice is illegal, yet no one has brought forward any practical suggestions, only vague generalities. And, as I illustrated in the first part, further cutting of the budget is not practical. If you think it is, I challenge you to investigate the budget and find $1,500,000 in waste.
I also summarized our significant sources of revenue and illustrated what would have to be done to generate this additional revenue. I thought that part was easy to understand. The commissioners got the message. An important take-away is the fact that T or C’s property tax mil rate is far below any other municipality in this area, and comprises only 5.8% of the total property tax bill. Under-sized tax rates, like inadequate utility rates, can affect the city’s ability to obtain grants and loans for large projects. And, as I also noted, people who complain about high property tax bills should go to the county and school district to complain, as they collect the lion’s share of the property tax. There’s something else to investigate: What do city residents get for the $2,000,000 Sierra County collects from property tax?
Now I will end this with a warning. Do not attempt to misquote anything in this email, or in my presentation, nor take it out of context in order to make a false assertion. Although others may not take this seriously, I do. And I will not hesitate to contact a lawyer if I believe your reporting to be libelous.
Truth or Consequences
BTW: Look at what the residents of Elephant Butte pay for their trash collection if you think going to a private service is a good idea.