June 22, 2009 – (RealEstateRama) — Property taxes that keep streetlights lit around 27,000 homes and businesses will drop next year, after the City Council voted June 16 to roll back funds being held in reserve for the city’s 355 separate streetlight tax districts.
The districts serve nearly 33,000 Scottsdale properties, and 9 of 10 owners in the districts will see a decrease or no change in taxes. The average savings will be about $10 next year.
About 2,150 owners will see tax increases to cover the costs for electricity and maintenance of their streetlights.
The districts were formed beginning in the 1970s by property owners, who signed petitions to tax their properties for the installation and operation of streetlights. The City Council annually is required to adopt an ordinance estimating the funds needed to pay for electricity and other expenses for each of the districts. Expenses vary according to the number of streetlights, electrical usage, maintenance needs and other factors.
As the city grew, annual costs for the districts were difficult to forecast, and many of the districts built up funds in reserves over the years. As growth has slowed, the city’s financial staff saw no need to keep the reserves at higher levels and recommended the reserves be adjusted to about 10 percent of annual costs. The City Council voted unanimously to reduce the reserves and use the surplus funds to cover operating expenses next year.
Another move by the city will help hold down future costs for some districts. The city historically has contracted with the Valley’s two major electrical utilities, Salt River Project and Arizona Public Service, to maintain street lights and poles. In March, the city took over maintenance for the 86 SRP districts in Scottsdale, and is expecting to save district taxpayers about $160,000 annually because of differences in the city’s maintenance cost structure.
APS is continuing to provide maintenance in the districts under its contract.
More information is available in the City Council report on the streetlight districts at http://www.scottsdaleaz.gov/Assets/documents/council/2009/061609/Item25B.pdf.
Contact: Pat Dodds, Public Affairs Officer, (480) 312-2336