The Craig City Council will likely pass an ordinance Sept. 13 that will increase the city's bottom line, but that could cost residents.
The ordinance updates the fees charged to utility companies -- natural gas, telephone and electric -- and was passed on its first reading.
Cellular phone companies are not included.
City Manager Jim Ferree said the intent is to reflect the current economy. The city experienced an economic boom in the late 1970s and officials panicked when that was followed by a slump. The council passed an ordinance, which locked the tax collected from local utilities at the 1985 rates.
The tax is based on a company's revenues and city officials were working to maintain an even revenue stream even if those revenues fell with the rest of the economy.
Utility companies are assessed 3 percent of their gross revenues.
City Finance Director Bruce Nelson said the ordinance did two things: It ensured that no matter how good a company's revenues or how strong the economy, the city wasn't benefiting, and it created a situation where businesses that didn't exist in 1985 could claim to be exempt from the tax.
Nelson said that hasn't yet been the case. All utility companies in Craig are paying the tax, though that has been a set amount.
Nelson predicts the change will increase city revenue by $148,000, bringing the total to $360,000.
"They pass it on to their customers," Nelson said. "If you look on your bill you'll see a line for the tax."
Nelson expects the changes to impact the average customer by $2 a month.
"Again, it depends on how much you use," he said. "It's based on 3 percent of what they bill you."
Nelson said he's received no calls from utility companies.
Officials from Qwest Communications and Yampa Valley Electric Company were not available for comment.
An Atmos Energy spokesman confirmed that if the charge increases, it will be passed on to customers.
"This just evens the playing field and plugs a loophole," Nelson said.
The city council meets at 7:30 p.m. Sept. 13. The ordinance is scheduled for its second and final reading. If passed, it will go into effect Jan. 1.