Riverside voters to determine fate of longtime revenue stream

POSTED: 08:09 AM PDT Jun 04, 2013 
RIVERSIDE, Calif -

Voting will end today on a citywide measure that Riverside officials say is critical to maintain current levels of service, while opponents argue the city is resorting to scare tactics and exaggerations to continue collecting what amounts to an an illegal tax.

Measure A seeks to carry on a municipal policy -- in effect for more than a century -- in which the city annually transfers 11.5 percent of revenue collected from water customers into the general fund.

The measure was placed on the June 4 primary election ballot because of a lawsuit filed by residents Vivian and Javier Moreno, who sued to stop the city's practice of mixing utility fund and general fund money because, they argued, it violated Proposition 218, a statewide measure ratified by voters in 1996.

Under 218, any proposed increase in local taxes must be approved by a majority of voters affected by it, and any assessment, or fee, must be levied with the intent of covering only those services that it's implemented to cover.

The Morenos argued the revenue transfers were leading the city to charge an ever-increasing utility user tax -- now at 18 percent -- without giving ratepayers the benefit of deciding whether the upward adjustments were justified.

In the face of the legal challenge, Riverside officials halted water fund transfers last July. City attorneys settled the Morenos' suit last month.

Under the agreement, from which the Morenos -- who identify themselves as civic watchdogs -- did not gain a cent, the city agreed to return $10 million to the water fund over three years if voters approve Measure A.

If voters don't agree to Measure A, the payments will be made over 10 years because costs will be more difficult to recoup.

Utility customers may realize a few cents' reduction in their water bills because of the lawsuit, according to city officials.

The "Yes on Measure A" campaign warns that "essential city services" could be affected and layoffs may ensue if the proposal doesn't receive a majority of votes, all of which are being cast by mail. Initial election returns will be posted after 7 p.m. on the Riverside County Registrar of Voters' website.

"We are taking this very seriously," Riverside Mayor Rusty Bailey said. "Measure A provides a critical source of revenue ... and if that revenue is off the table, the city council will need to be prepared to make some difficult decisions."

According to the city manager's office, water fund transfers last year totaled $6.7 million, or 3 percent of discretionary income.

The money supports 79 full-time positions, including 21 police officers and firefighters, city officials said.

The police department would take a direct $1.4 million hit to its budget if the measure doesn't pass, according to the city manager's office.

Up to a dozen firefighters may have to be laid off, while the Department of Public Works might be faced with eliminating 30 jobs, according to the city.

Programs and services that might need to be scaled down if the revenue stream ceases:

      -- Department of Code Enforcement operations;
      -- City Broadcasting Division -- televising council meetings;
      -- Department of Animal Services, loss of two officers;
      -- Library Department book acquisitions;
      -- Department of Parks, Recreation and Community Services' youth swimming programs and annual fireworks shows; and
      -- citywide graffiti abatement operations.

Measure A opponents accused the city, which has spent around $63,000 on promotional fliers and literature, of running what amounts to a misinformation campaign to confuse the issue and frighten voters into supporting the proposal.      "They're lying to ratepayers," Vivian Moreno told City News Service. "They want to just keep taking and taking. But when does it stop?"

Riverside Citizens Against Measure A wrote that the city is failing to be candid with voters by not acknowledging that Measure A isn't simply about authorizing an inter-fund transfer; it's establishing a tax, as defined under Prop 218.

"This should be put to the voters as a tax and not a reauthorization of a charter amendment," the opponents stated. "The city also does not keep a separate accounting of this money, so they cannot prove how it will be spent. The citizens of Riverside are being misled!"

The anti-A campaign noted that the city "claims to have ... $460 million in cash reserves and investments, (so) why do they need more money from out water utility bills?"