PRESCOTT – In the story the little boy cried wolf one time too many and wasn’t believed when the wolf was at the door.
For the City of Prescott, the wolf is at the door financially. Carl Dalrymple, city accountant, said the city is at a critical stage because the cost of electricity has gone up but the rates haven’t been increased accordingly. “We need additional revenue,” he told the Prescott City Council at its August meeting Monday night. “We will have to make cuts. It will be painful and people will suffer but we’re all in the same boat and need to get ready.”
For the year, he said, the city is $450,000 in the red bases on accrual based accounting. This does not mean, he continued, the city is $450,000 in the hole concerning cash. The council needs to do something, he added, before the city has to dip into its reserves.
Prescott Mayor Terry Oliver said MISO energy integrated and the wholesale cost of electricity has increased since February.
Dalrymple reminded the council members the electric department funds the city and if rates are lowered rates have to be raised in some other department or some kind of tax would be needed to raise money to offset it. “The budget committee knows what to do. It will need time to visit with department heads.”
At this point, he said, there are no answers. He reminded the council there has been times when the city has raised electric rates and the public got extremely upset. Another part of the problem is the public perception currently is the rates are too high as it is, so a rate hike wouldn’t go over well.
“Something is going to have to be done,” he said. “I recommend the budget committee sharpen its pencils. Basically you know what you have to do – make some cuts. We may have to go to one-day trash service or possibly change the insurance. Everything’s on the table.”
Councilman Jorge Nassar agreed, saying the council also needs to examine itself because when he was mayor (form 1983-86) it didn’t have the salary it does now.
Dalrymple said the Florida firm hired to look at the issue hasn’t made any recommendations yet.