Impartial Analysis Measure C - City Attorney

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RECEIVED AUG 16 2021 City of Riverside CITY ATTORNEY IMPARTIAL ANALYSIS OF MEASURE C City Clerk's Office Measure C was placed on the ballot by the Riverside City Council and is a Charter Amendment q; sV om to add section 1204.2 to the City's Charter ("Charter"). The Charter Amendment would continue the transfer of revenue from the City's electric utility fund to the City's general fund for the purpose of maintaining general city services such as 9-1-1 response, fire, paramedic, police, street repairs, parks, senior services, addressing homelessness and other general services. Existing Law Charter section 1204 currently authorizes a transfer of revenue from the City's electric utility revenue fund into the general fund ("Transfer"). The Transfer is made after the electric utility pays for operating and maintenance expenses, bond and debt service, establishment and maintenance of any reserves for bond/debt service, and capital expenditures. Under this authority, the Transfer has and continues to be made annually in twelve equal installments. The current Transfer is approximately $40 million and pays for general city services. City of Riverside voters approved the Transfer in 1968 and 1977. The City sets its retail electric rates so that the electric utility will have enough revenue each year to pay these costs and make the Transfer. In 2018, a lawsuit was filed against the City alleging the Transfer is a "general tax" requiring voter approval under Proposition 26. In 2020, the court ruled that voters must expressly approve funding the Transfer with electric rates. In 2021, the City settled this lawsuit and agreed to place this measure on the November 2021 ballot. Effect of the Measure on Existing Law If approved, Measure C would add section 1204.2 to the Charter, continuing the transfer of revenue from the electric utility fund to the general fund. The Transfer would continue to be made after the electric utility pays for operating and maintenance expenses, bond and debt service, establishment and maintenance of any reserves for bond/debt service, and capital expenditures. The Transfer would be made in twelve equal installments during each fiscal year, in an amount not to exceed 11.5 percent of the electric utility's gross operating revenues, exclusive of surcharges. The Charter Amendment also provides that the proceeds transferred to the general fund shall be used to maintain local general purposes such as 9-1-1 response, fire, paramedic, police, street repairs, parks, senior services, addressing homelessness and other general services. Measure C requires simple majority approval of the City of Riverside voters to pass. A "yes" vote will approve Measure C. Under the settlement agreement, electric customers will receive bill credits, over a five yew period, in a collective amount not to exceed $24 million. A "no" vote will not approve Measure C. The lawsuit will resume and the customers will not receive a bill credit. If the City does not prevail in the lawsuit, the Transfer and electric rates