This June Long Beach voters will get to decide how much the city should be able to charge its own utilities to use city property after the city’s charter amendment committee voted Wednesday night to place a charter reform initiative on the June 5 ballot.
The decision to place the charter reform on the ballot was spurred by a settlement reached by the city last year regarding a lawsuit filed by a resident over fees it charged its water department for access to water and sewer lines, and a second pending suit regarding the city’s gas company. Both suits cited state laws that dictate that utilities cannot charge more than what it costs to provide service.
Fees charged to these utilities, amounting to millions of dollars annually, are transferred into the general fund where they are then used to fund general city purposes like park maintenance, public safety and street repairs.
In settling the suit over the water and sewer line fees, in which it will reimburse $12 million to the water department and lower future fees for customers, the city says its in line to lose about $8 million from next year’s general fund. The resulting savings to each customer of the Long Beach Water Department has been estimated by city staff to be about $3 a month.The gas suit could add another $10 million hit to the city’s finances if the ruling comes down against the city but officials have speculated that the ruling will ultimately favor the city.
The city’s charter currently does not prohibit the transfers but it also does not explicitly allow them, the charter reform would add language to the city’s charter that would allow the city to continue the practice that had been in place for several decades prior to the suits.
Last month the city’s director of financial management John Gross said his team had zeroed out the city’s projected deficit of nearly $16 million for the next fiscal year in part by increasing fees on parking fines and taking into account revenue collected from Airbnb operators, but also because Measure A, a voter-approved 10-year sales tax increase, had outperformed expectations.
Still, the city council voted unanimously Wednesday to approve putting the charter reform on the ballot. The initiative must clear 50 percent voter approval when residents head to the polls in June otherwise the city could face a future with tens of millions of dollars less to fund city services.