An influential panel wants Riverside executives to put on the November ballot a measure that would allow the city to continue funding municipal programs with revenues from electric utilities, but gradually reduce the amount over a decade .
Members of the charter review committee proposed on Tuesday, July 6 that leaders send voters a plan to cap the spending of money from the bills of Riverside electricity customers for purposes other than utilities. to $ 38 million per year, first, and then lowering the cap to $ 1 million per year. until it hits $ 30 million.
The proposal, if Riverside City Council put it on the ballot and voters approve it, would put Riverside on “a slow pace, so to speak,” said Malissa McKeith, vice-chair of the committee, according to a report. video of the meeting.
The plan is the committee’s long-deliberate solution to a significant problem that threatens Riverside’s financial stability, both short and long term. Last fall, a judge ruled unconstitutional the city’s long-standing practice of charging more than the cost of providing electricity to homes and businesses, and using the extra money to pay for police and protection. against fires, street maintenance, park maintenance, libraries and other services.
On Tuesday, city council voted unanimously to receive the commission’s report, with few comments other than thanking the commission for its work. Council members said they plan to discuss on July 20 what to include in the measure they intend to send to voters.
The municipal authorities pledged in May to include a measure concerning the transfer of electricity funds on the November ballot, in order to settle a lawsuit.
In October, that lawsuit sparked the ruling overturning the practice of shifting 11.5% of electric taxpayer income to programs that have nothing to do with electricity. Riverside County Superior Court Judge Craig G. Riemer said the additional client was charging a tax and determined that he could not continue without the elector’s permission.
The city agreed to seek voter approval in November. The deal also called for paying $ 10,000 to the plaintiffs who filed the lawsuit – Summer and Vincent Parada – and collectively repaying customers $ 24 million in credits for future utility bills.
City officials have proposed simply asking voters to preserve the status quo by allowing the electric transfer at current levels. But the committee took a different approach.
McKeith said panel members realized losing money would be a “devastating blow.” So they proposed initially setting the cap at $ 38 million, roughly the amount of the existing transfer, to avoid a wave of city budget cuts, she said.
But at the same time, said Ben Clymer Jr., chairman of the Charter Review Committee, the panel felt the city needed to start exercising more fiscal discipline and less reliance on electric money. That is why, he said, the committee proposed a gradual lowering of the cap.
“The challenges facing Riverside are not unique to our city alone,” Clymer said. “However, what is unique is that while most municipalities currently consume around 70% of their total budget in total personnel costs, Riverside hovers around 80.”
McKeith said that a gradual lowering of the cap could offer tariff relief to electric customers as they try to bounce back from the economic downturn triggered by the coronavirus pandemic.
And McKeith said its reduction would make the city less vulnerable to similar lawsuits in the future.
“We have a big x in Riverside,” she said, according to the videotape of the meeting. “Riverside has lost several times now on these issues.”
And McKeith noted that there is another lawsuit there. In December 2019, three longtime residents challenged Riverside’s practice of using additional revenue from water utilities to pay for city services.
During a public comment period, Riverside activist Jason Hunter suggested that city leaders should have acted long ago to avoid being brought to justice and, as one might expect, to to lose.
“A group of residents came down for almost a decade and told council that the electricity… (transfer) was unconstitutional under Proposition 26,” Hunter said.