In November’s election, Riversiders may be asked to reauthorize a decades-old practice of transferring millions in utility payments to the city’s general fund.
The city has been able to transfer money from electric utility to a general fund since Riverside first established a city charter in 1907. Voters decided in the 1960s and again in the 1980s that the city could transfer 11.5 percent of the utilities’ total revenues. This translates today as $40 million a year that is transferred into the general fund.
In Tuesday’s city council meeting, city officials wanted to be able to send the potential measure, which amends the city charter to continue the general fund transfer, back to the Charter Review Committee meeting which was held yesterday.
City Manager Al Zelinka said in Tuesday’s council meeting that in order for the proposed measure to make it to the June 8th election, the Charter Review Committee would need to discuss it as soon as possible.
“The timing on this request before you is seemingly quick but it’s first, out of respect for the Riverside voters and allowing their will to be heard at the ballot box,” Zelinka said. “And second, it’s to uphold fiscal responsibility.”
In a 5-2 vote, council members decided to push the committee’s assessment of the proposed measure to March, giving committee members more time to prepare it for further council approval and ultimately, the November ballot.
Earlier in the meeting, Zelinka mentioned how in 2018, the city was served with a lawsuit titled Parada vs City of Riverside, which challenges the validity of charter-authorized transfers from the city’s electric fund to the general fund and alleges the transfer is rather a tax.
He continued that the lawsuit is seeking a court order to prevent the city from continuing the funds transfer in the future, unless the city obtains another approval by election.
Zelinka explained to the council that waiting may cost much in liability. Each month the proposed measure is delayed after the city establishes its budget for the fiscal year on June 1st could cost the city $2.6 million in lost revenue.
Councilmember Ronaldo Fierro said in the meeting that the cost to the city before the November election is concerning, but not as much as what could result if the proposed measure lost in June.
Fierro proposed a counter motion in Tuesday’s meeting to ask the committee to review the measure at a later date.
“The City Charter is ultimately a document of the People of Riverside, and as such, it is critically important that our Charter Review Committee has adequate time to review and provide input on the proposed ballot measure,” Fierro said in a text message yesterday.
Councilmembers Erin Edwards and Andy Melendrez voted against Fierro’s counter motion.
“I was hopeful that we could move the conversation to the charter review commission as soon as possible so that we weren’t prematurely shutting down any options,” Edwards said in an interview yesterday. “We are facing some potentially significant financial challenges as a city, and I feel that at this time it is still very important to have all options and all timelines on the table.”
Fierro said the council’s decision to allow the committee more time to review the item gives committee members more opportunity for robust discussion, but it also provides the Riverside community time to gain an understanding of the need for the measure.