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Glendale rejects civil grand jury recommendations on utility revenue transfer

June 12, 2013|By Brittany Levine, brittany.levine@latimes.com

Glendale officials have decided to ignore recommendations made by the Los Angeles County Civil Grand Jury in a report that city officials claim muddled the waters around an unsuccessful ballot measure in April. The measure would have changed how millions in electric utility revenues are transferred to the General Fund each year.

The civil grand jury serves as a watchdog and is charged with investigating city, county and other special government agencies. In March, it released a scathing report on the controversial practice of Glendale transferring millions of dollars in revenues from its city-owned utility to help pay for police, libraries and other public services.

The jury’s report recommended the city hold a special election to decide whether to continue the transfer, which critics charge with keeping consumer rates artificially high.

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In the report, the grand jury said it was “not permissible for the city to use Glendale Water & Power as its ‘piggy bank’ to satisfy budgetary shortfalls,” and recommended Glendale look elsewhere for the money.

On Tuesday, city officials made it clear they plan to do neither.

“Our view is an election will not be necessary,” said City Atty. Mike Garcia. “We don’t believe that it’s necessary to discontinue the transfer of electric revenues.”

City Council members have said that without the transfer, Glendale couldn’t afford the police, parks and other public services residents have come to expect, but critics have called it a backdoor tax since it drains money from the utility, prompting rate increases to customers.

Glendale discontinued transferring millions of dollars from the water side of the utility a few years ago as a precautionary step due to a state rule that made the practice legally dicey. However, officials continued transferring money from the electric side of the utility, which they say is exempt from the state regulation.

Earlier this year, officials wanted to make it easier to transfer roughly $21 million in electric revenues by doing away with several administrative hurdles required by the city’s rules governing the decades-old practice. But the attempt to do so failed when voters rejected Measure B on the April ballot.

Officials blame that loss on the civil grand jury report, which was unsealed just nine days before the election. Typically, the grand jury doesn’t release reports until July.

“They released this deliberately, in my opinion, to affect the outcome of the election,” Garcia said. “I think there’s pretty strong case law that this was an unlawful use of public resources.”

He plans to bring back options on what recourse Glendale has.

“I hope we can do something to prevent this from happening again,” said Mayor Dave Weaver, accusing the civil grand jury of becoming “too political.”

While the city’s response to the civil grand jury — approved by the City Council on Tuesday — is required, implementing the recommendations isn’t.

Both documents are set to be posted on the grand jury’s website in July as part of an annual report.

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Follow Brittany Levine on Google+ and on Twitter: @brittanylevine.

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