It’s now official – customers of the Pasadena Water and Power utility will be receiving modest rebates as well as mild relief on their bills for the next six months as the city looks to provide some economic aid to a local economy that’s been clobbered during the coronavirus crisis.
The City Council on Monday unanimously approved the plan, which will provide PWP’s estimated 67,500 customers, plus eligible former customers, with a total of $11.4 million in rebates, along with another $2 million in suspended utility fees for six months.
The rebate money will come from the city’s “underground surtax” fund, which is made up of fees that customers are charged to support the construction of underground utility lines.
Under the plan, customers, both residential and commercial, will receive rebates equal to their last 24 months of surtax-fee payments, or about $11.4 million in total.
According to a city staff report, those one-time rebate checks could start going out within two weeks.
Additionally, the underground-surtax fees – roughly 4 percent of a typical bill — are now suspended for six months, keeping an estimated $2 million in the pockets of customers.
“It’s very creative thinking from the staff,” Mayor Terry Tornek said Monday after the council approved the plan.
Paul Little, president and CEO of the Pasadena Chamber of Commerce, thanked the council for “providing a small measure of relief to your residents and businesses’’ and added, “This is a step in the right direction.”
But in an email to the council, Little also warned that more economic relief from the city will be needed to help hard-hit businesses survive the coronavirus crisis.
“I will reiterate the concerns previously expressed that, absent meaningful financial support from the City of Pasadena, many of the local small businesses you are assisting with this modest financial contribution will not be able to reopen once the COVID-19 crisis passes,” Little wrote.
However, further economic relief from the city would appear a long shot.
According to the staff report, “It should be recognized that in general, local governments are not well placed to provide direct financial support to residents and businesses in times of economic disruption, as they too face the challenge of providing essential services (e.g. police, fire) in the face of significant declining revenues and future uncertainty.’’
For current PWP customers, no applications would be needed for the now-approved rebates – the city would simply cut checks. Former customers would need to fill out a claim form with the city.
The rebate checks would range from about $103 for a typical residential user to about $3,200 for a medium-size restaurant to about $29,000 for heavy-usage customers such as hotels.
City Manager Steve Mermell said the underground fund’s balance “is well in excess of what our identified project needs are’’ — and thus became an available resource for Pasadena. (Legally, there are no other permitted uses for these funds, which is why the money is being tapped into in the form of rebates and fees suspensions.)
As detailed by Mermell, the cash balance in the underground fund, as of last June 30, was more than $52 million. Subtracting some $6.3 million in appropriations for fiscal year 2020 – and adding in an estimated $4.2 million in fiscal 2020 revenues – the fund now sits at just under $50 million.
The $11.4 million that would be sent back to city electrical users would leave the fund with about $38.5 million by this coming June. The fund would gradually diminish to about $7.3 million by fiscal year 2025, according to staff estimates.
Last week, when Mermell first posed the idea of dipping into the underground surtax fund, it received across-the-board positive reaction from council members. Monday, the resolution breezed through the council without further discussion.
The resolution follows other recent economic relief measures by the council, including a residential and commercial renter-eviction moratorium; suspension of utility shutoffs for lack of payment; suspension of late fees and penalties for city services such as water, power and garbage pickup; and modifying various parking and impound rules.