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Glendale violates charter

July 10, 2013

By a 6/25/2013 resolution City Council, citing the Charter, transferred nearly $21 million of GWP electric receipts to pay for general appropriations — services unrelated to electricity.

The following quotation, excluding bracketed words, is from that resolution; the bracketed words appear in Section 22, Article X’s, actual language.

“...Section 22, Article XI of the City Charter provides... an amount equal to twenty-five percent (25%) of the operating revenues of the Glendale Water and Power Department... shall be transferred from the Glendale Water and Power [surplus fund] to the general [reserve] fund...”

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The resolution’s omission of the bracketed words conceals charter violations. Omitting the charter’s “surplus fund” reference conceals that transfer must only come from surplus; namely, from monist left-over once all utility needs are met. No surplus; no transfer. And, if there’s a surplus, only a portion of it, measured by 25% of operating revenues, can be transferred. GWP documents, supporting proposed rate increases, state current and, without those increases, projected electric net income is in deficit.

Transferring absent surpluses and in the face of deficits, violates the charter. Omitting the “reserve” reference conceals violating the charter by failing to restrict transfers to the general reserve fund. It’s a fund established by Article XI, Section 15 primarily to advance cash temporarily to other funds — not to pay for general appropriations. Glendale instead transfers to the fund established by Article XI, Section 14 to pay for general appropriations; and, does so even though Section 14 expressly precludes GWP receipts from going there.

City practice may comport with the resolution; but, neither comports with the charter.

Harry Zavos
Glendale

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