Looking to provide a bit of economic relief to residents and businesses hurt by the coronavirus crisis, the City Council on Monday is expected to approve rebates to Pasadena Water and Power customers totaling some $11.4 million immediately, plus another $2 million in suspended utility fees over the next six months.
The money would 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 proposed plan – which received consensus support when it was first suggested by City Manager Steve Mermell at last Monday’s council meeting – customers, both residential and commercial, would receive rebates equal to their last 24 months of surtax-fee payments, a total of about $11.4 million spread out among the utility’s 67,500 payers.
According to a city staff report, those one-time rebate checks could start landing in Pasadena mailboxes within two weeks of the council approving the proposed resolution.
Additionally, the underground-surtax fees would be suspended for six months, keeping an estimated $2 million in the pockets of customers.
For current customers, no applications would be needed for the rebates – the city would simply cut checks. Former customers would need to fill out a claim form with the city.
The one-time 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.
Mermell said the proposed local relief would somewhat offset money that Pasadena figures not to receive from President Trump’s $2 trillion federal stimulus package, which is aimed largely at cities with populations over 500,000 or more.
Of the federal stimulus plan, Mermell said, “From a local government point of view, it’s really a mixed bag, or kind of light in the bag, in you will.”
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.’’
Still, the report said, “There is recognition that additional actions are necessary to support the city’s residents and businesses … given the unprecedented financial challenges facing many of the city’s electric rate-payers, whether they be individuals or businesses.’’
Enter the underground surplus fund — which, Mermell said, is overfunded and thus 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.)
“The current fund balance is well in excess of what our identified project needs are,’’ Mermell told the council last week as he introduced the plan.
The staff report added, “Over the course of the last several years, the amount of money in the underground surtax fund has greatly exceeded the amount necessary to complete identified projects. This is largely due to various constraints impacting the number of projects that can be undertaken at any one time.’’
“Because it is the individual renter, homeowner and business owner who generally holds the account, rebates will be distributed across the economic scale and not concentrated to unduly favor any particular segment of the economy.’’
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.
The relief resolution received positive reactions when Mermell first laid it out last week, and it is expected to be approved Monday, setting up the checks to start going out soon.
“I think this is a great idea,’’ Council Member Gene Masuda said last week. “Our businesses and our residents really need some help right now.”
Added Council Member Margaret McAustin: “We over-collect in this fund every year. I think this is a very creative way to put this money to use.’’
If passed, the resolution would follow other economic relief measures the council has already passed, 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.
In deference to the “Safer at Home” orders in place in the city, county and state, the council will meet “virtually” on Monday, beginning at 2 p.m., with members participating by video or audio, as was the case last week. Indeed, last week’s maiden voyage in video government actually went off remarkably glitch-free.
With the usual in-person public comments for council meetings suspended during the coronavirus crisis, comments can be emailed by going to https://www.cityofpasadena.net/city-clerk/public-comment/. They will be read aloud at the meeting.