CITY HALL — Roughly two months after City Council members were forced to abandon transferring millions in water utility revenues to the General Fund to help pay for public services, officials are angling to make up the loss.
The City Council is considering a plan to increase the annual transfer from Glendale Water & Power electricity revenue by $2 million as officials struggle to bridge a projected $18-million budget gap, which could mean deep cuts to parks and community services.
Officials who proposed the plan say the burden on the electric utility would be a wash since they would also transfer an equal amount in expenses to the water side, which a consultant determined had been undercharged.
But some say it’s just a shell game to wring as much money as possible from Glendale Water & Power, which critics argue artificially inflates customer rates.
“This issue has instigated a lot of thought, a lot of accusations, and has the potential to appear and be perceived as funny business in terms of money being moved around, like a shell game,” Glendale Water & Power Commissioner Zanku Armenian said during a public meeting Monday.
Glendale Water & Power also absorbs millions in expenses for city services and infrastructure that would otherwise have to be paid for with money that pays for police, firefighters, libraries and other public programs.
“There are many, many additional benefits to a municipal utility that in many cases we take for granted,” General Manager Glenn Steiger told the commission.
The services — ranging from paying for the electricity that powers all city streetlights and traffic signals to handling all citywide billing — add up to roughly $4 million in additional costs to the utility, Steiger estimated.
“It seems like those could be considered a fund transfer,” Commissioner Hugh Yao said. “Those are like free services to the city because we’re a municipal utility.”
Under a provision of the city’s Charter approved by Glendale voters more than 60 years ago, the City Council last year approved the transfer of $19.1 million in electric revenues and $4.2 million in water revenues to the General Fund, which pays for basic public services.
But in February, the City Council was forced to halt water revenue transfers after city attorneys determined recent court cases had thrown the legality of the practice into doubt.
The fund transfers are written into the utility’s budget each year, but
city critics have for years argued that the practice artificially inflates utility rates. City officials have said the transfers make up for Glendale's below-average receipt of property tax revenues, frozen decades ago by Proposition 13.
Officials this week said the utility’s handling of services was in line with city policy.
“Those are policy decisions that have been made by the city …[and] the City Council has ratified them,” said Bill Fox, an assistant general manager for the utility.
In light of the public criticism, commissioners said it was especially important to increase transparency surrounding Glendale Water & Power’s support of General Fund operations, including the millions of dollars in costs beyond the revenue transfers.
“The whole issue to me has to do with public transparency, particularly on this issue … because we are talking about significant amounts,” Armenian said.