AGENDA # 12.1

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

Ralph D. Karpinos, Town Attorney

 

SUBJECT:       Utility Tax District Legislation

 

DATE:             April 25, 2005

 

 

Representatives Joe Hackney and Verla Insko have introduced a bill at the Town’s request to authorize a local tax to provide a revenue source to assist in the placement of electric utility lines underground.  In recent email correspondence with the Town Representative Insko has asked for clarification regarding whether the Town’s interest relates only to electric lines only or also includes phone and cable lines. 

 

The purpose of this memorandum is to seek any further clarification the Council wishes to make regarding its interest in this local bill.

 

BACKGROUND

 

In early 2003 the Town Council considered the issue of burying the electrical power distribution system.  A report to the Council (Agenda #5c, dated February 24, 2003) is available on the Town’s web site.    During the course of the discussion in 2003, the proposal was made to seek legislative authority for a tax on electric bills to generate a source of funds to pay for the burying of some electric lines.  A request for such legislation, modeled after a local act for Dare County (Chapter 127 of the 1999 Session Laws) was included in the Town’s Legislative Program for 2003.  The bill was introduced and referred to a committee in the House.  No further action on the bill occurred. 

 

The Town Council requested the proposed bill be reintroduced in the 2004 Short Session.  The bill was not introduced during that Session.

 

Earlier this year, the Town Council adopted its program for the 2005 Long Session of the General Assembly, including a request that the 2003 bill to authorize a tax to put overhead power lines underground be considered again.  The bill has been introduced and referred to the House Committee on Finance.  (Attachment 1).

 

DISCUSSION

 

Last week we received email correspondence from Representative Verla Insko asking for further clarification regarding the Town’s interest in this bill.  Specifically, she has asked whether the Town is looking for legislation to add a tax for only electric utility lines, as was the original wording of the bill and the Dare County local act, or whether the Town wished to seek legislation that would authorize a tax on other utility bills as well and thereby help generate a revenue source for their underground installation.  Representative Insko indicated the bill would be more difficult to pass if it were amended to add phone and cable lines. 

 

We believe that the original discussions by the Council, which took place in the aftermath of the winter ice storms and in the context of a particular development application a few years ago, indicated that the focus of the Council’s concern at that time was primarily placing electric lines below ground for both safety and aesthetic reasons, although other overhead wires were also considered.  The current Council has not discussed this particular matter in detail or the question raised by Representative Insko.  We believe it would be appropriate for the Council to discuss this matter and determine what, if any, further comment it wished to provide. 

 

RECOMMENDATION:

 

We believe the Council’s long term goal is to have all overhead wires installed below ground.  We recommend that the Council respond to Representative Insko by indicating this.  However, based on the comments included in Representative Insko’s email message of April 21, the Council may prefer to state that its interest is in seeking a funding source to assist in the placing of electric lines underground.

 

ATTACHMENTS

 

  1. House Bill 802 (p. 3)
  2. Email messages to and from Representative Insko (p. 6)