Time to review utility transfer fee

Published 10:10 pm Sunday, November 23, 2014

Each year, Dalton Utilities “transfers” 5 percent of its total revenue to the city of Dalton.

That came to about $9.4 million this year, or about a third of the city’s budget, and it is expected to come to $9.8 million in 2015.

That transfer fee helps the city keep its property taxes down. Without that money, officials would have to drastically cut city services or raise several million dollars in property tax revenue.

But some would argue it’s still a tax, just one that is hidden away in a series of numbers on monthly utility bills. And if you consider that fee a tax, it’s also one that falls partly on those who live outside city limits, as Dalton Utilities provides water, wastewater and natural gas to residents outside Dalton and even outside Whitfield County. So the city gets to shift part of the cost of providing services to those who don’t live or vote in the city.

Now, that seems like a good deal for the city government. It may be a good deal for city residents.

But the transfer fee has been in place for many years. It has been a long time since the utility and the City Council have really looked at the fee, and it may be time for them to re-examine it.

Is it really good for the city to rely on the transfer fee for such a large share of its revenue? No one wants to see property taxes increase. But at the same time, it could be more fiscally prudent for the city to have a more balanced revenue stream.

Does the fee make Dalton Utilities less competitive?

No one expects that if the city abolished the transfer fee that Dalton Utilities would cut its rates 5 percent. Businesses charge what the market will bear. We expect the utility, because of its public nature, probably already charges less than what it could if it were a private utility. Yes, Dalton Utilities has a board that governs it, but they are appointed by and ultimately answer to elected officials who are going to hear an earful from voters if rates go up too much.

But that 5 percent paid to the city could go to capital expenses or other projects that could help Dalton Utilities grow.

City officials need to look closely at the transfer fee, bring in outside experts if they think it is necessary and see if that rate still is the best one for the city and the best thing for Dalton Utilities. Maybe it is. Or maybe after all these years it needs to be adjusted or limited in some way.