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Fee transfers need more transparency

May 20, 2011

The proposed 2011-12 budget needs transparency regarding use of utility fees for General Fund purposes — for purposes other than supplying electricity or water to rate payers.

Traditional Charter-authorized water fee transfers to the General Fund — which pays for basic public services — have stopped because they are prohibited by the state Constitution. Electric fee transfers are not prohibited, so the proposed 2011-12 budget includes a $21-million transfer of such fees.

One might assume that the $21 million is the total amount of utility fees used for General Fund purposes. However, there are additional disguised resource transfers from Glendale Water & Power that are used to subsidize general city services.

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For example, the Glendale Water & Power Commission hearings indicate: 1) the waterworks is not reimbursed for providing, operating and maintaining the fire hydrant system; 2) the electric works, without reimbursement, operates the city street lights and provides electricity for the city’s traffic signals; and 3), a large amount Glendale Water & Power’s Perkins building provides space for other city agencies, rent free, while the utility must lease commercial space elsewhere to carry on its services.

This is not an exhaustive list of such disguised transfers. It merely illustrates how opaque — how hidden — such transfers are. Only the city staff, at the City Council’s direction, can provide an exhaustive list with the dollar values it represents. And, only such a list can unmask disguised transfers and provide transparency.

It is important to make hidden water fee transfers visible because each council member takes an oath to uphold the Constitution that prohibits such transfers. To keep that oath, the council must discontinue such transfers; but it can only do so if it’s made aware of them.

Hidden electric fee transfers need to be made visible so that the City Council can make informed choices about the amount of electrical fees that can be used for the General Fund — choices that have a direct impact on each individual rate payer’s cost of electricity.

Only by replacing opaqueness with transparency can the city allay any suspicions on the part of the public that the budget process is being deceptively manipulated, and give us confidence that the City Council will be in the position to make informed budget choices.

Harry Zavos

Glendale

 
 

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