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Ochoa: Moving electricity money to General Fund 'makes sense'

Glendale plans to transfer $21 million from the electric fund in its upcoming fiscal budget.

June 15, 2012|By Mark Kellam, mark.kellam@latimes.com
  • City Manager Scott Ochoa defended annual multimillion-dollar transfers from the utility's electric fund to the city's General Fund on Thursday.
City Manager Scott Ochoa defended annual multimillion-dollar… (Raul Roa / Staff…)

City Manager Scott Ochoa went before the Glendale Power & Water Commission on Thursday to defend annual multimillion-dollar transfers from the utility's electric fund to the city's General Fund, which some residents have complained leads to artificially high rates.

The city plans to transfer $21 million from the electric fund in its upcoming fiscal budget, and an advisory committee has been formed to look at possibly increasing the electric rate by Sept. 1.

“The City Council is concerned about the transfer,” Ochoa said. “It's focused on reducing the size of the transfer, but doing so in a way that makes sense for the organization and for the community with respect for all of the different service levels that comprise the city of Glendale.”

In fiscal year 2000-01, the city transferred about 9% of the almost $120 million it generated in retail electric sales, Ochoa said. The planned $21-million transfer makes up about 12.3% of projected sales.

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“That is, at the end of the day, what the butcher's bill is,” he said. “From there, we can make any number of statements about whether we want to continue that.”

Ochoa said the declining economy had a major impact on the city's General Fund — which pays for most public services, such as libraries, police and firefighters — so city officials tapped more electric funds to compensate.

“As [Glendale Water & Power] is part of the overall organization, council over the years saw fit to increase that transfer to offset costs to the city's services,” Ochoa said.

Also during that time, the water transfer was eliminated, which also put added pressure on the electric transfer, Ochoa said.

City officials consider both residential and commercial customers whenever they look at utility finances, Ochoa said, adding that the city always wants to make itself attractive to prospective businesses by being cost-competitive.

He acknowledged that having an “inordinately high transfer rate is at odds with that philosophy.” But, he added, city officials can't immediately make a drastic change to the transfer rate because it's been in place for many years.

“I think it's unwise, perhaps even irresponsible, to try to accomplish that all at once, and I would hope and expect that you would agree with that,” Ochoa told commissioners.

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