Measure C | The Riverside Services Protection Measure
November 2, 2021 Municipal Election
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THE SITUATION
The city of Riverside has a long-standing practice of transferring up to 11.5% of its electric utility revenue to the City’s General Fund to fund basic city services (City Charter Sec. 1204). The practice is called the General Fund Transfer or GTF. It is not itemized on electric bills. Instead, 11.5% of one’s electricity base usage is added to the total charge.
In 2010, California voters passed Proposition 26 which provided that certain fees and charges unrelated to electric service must be approved by voters.
In 2018, the City of Riverside was served with a lawsuit titled Parada v City of Riverside. The lawsuit argued that the City violated Proposition 26 by not securing voter approval for the 11.5% GTF. The plaintiff’s argument, that the transfer was an added tax that required voter approval, prevailed.
In May 2021, a settlement was reached by the City and Parada plaintiffs. The settlement requires the City to place a measure on an upcoming ballot that asks voters to authorize the Utility Fund Transfer to the General Fund to pay for City services unrelated to the utility. A second requirement states that refunds or credits for past transferred funds must be allotted to rate payers. Details of the second requirement have not been finalized.
On July 20, 2021, the City Council voted 5-2 to place the Council’s amendment, The Service Protection Measure, on the November ballot. Designated as Measure C, the City is its chief proponent. Several residents, many outspoken critics of the City’s budget priorities, are in opposition.
THE PROPOSAL
Measure C will continue the monthly transfer of rate payer funds from the electric utility to the general fund. The amount will not exceed 11.5 percent of the gross operating revenues. The measure states that proceeds will be used for local general purposes including public safety, infrastructure repairs, parks, and addressing homelessness.
FISCAL EFFECTS
Riverside’s GTF provides approximately $38 million annually, or roughly 14% of the General Fund operating budget. It is difficult to accurately estimate where the biggest impact of the 14% loss would be felt. Outcomes could include 14% less police officers, 14% less roads paved, 14% less trees trimmed, 14% less library services – essentially, any combination of service reductions to cover the $38 million deficit.
The benefit of nullifying the GTF would be residents’ utility bills would be reduced by 11.5%. This would provide more spendable income during a time when many residents are facing serious financial hardship. 80% of the City’s budget pays for personnel and pensions. The $38 million annual tax decrease could force the City Council to address its personnel costs, most likely with a hiring freeze or lay-offs.
SUPPORTERS SAY
- Measure C will ensure that the city can protect essential city services, including 911 emergency response, fire and paramedic services, public safety and street repairs while addressing homelessness and continuing our investments in youth, parks, libraries, and senior programs.
- Measure C is not a new tax and will not affect current utility bills. The current General Fund Transfer and taxable rate have been in place since 1968. The measure requires regular audits detailing how GTF funds are spent.
- With the economy in flux, now is not the time to put future planning and budget stabilization at risk. As we work to recover from the pandemic, we need Measure C now more than ever.
- The question before voters - do we want to maintain the current level of public services, or do we want lower electric bills and a absorb a 14% cut in services?
OPPONENTS SAY
- The City claims this measure is about preservation of municipal services. Not true. Measure Z, a one cent local sales tax passed in 2016, brings in $60 million in annual revenue and the majority of its funds go to pay for personnel and pensions, not City services. Moreover, many cities do not have a GTF, and they provide equal to or better services than Riverside.
- Riverside electric rate payers are over-taxed on utility bills. Removing the general fund transfer tax will bring electric bills down and encourage better fiscal responsibility by City Council and staff.
- The 11.5% utility transfer tax encourages rate hikes in order to increase the general fund and does nothing to motivate the City to curb its overspending. Reducing or eliminating the transfer tax will not interfere with utility services.
- The question before voters - are we better off with lower utility bills or paying another tax to support excessive salaries and pensions?
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LWV Riverside - Measure C Pros & Cons - PDF
City of Riverside - City Clerk Measure C information
Riverside County Registrar of Voters Information
This is an ALL MAIL IN BALLOT ELECTION - Ballots mailed out starting October 04
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