Moreno Valley Muni Expects Ballot Showdown

The city council of Moreno Valley delayed action on adopting an ordinance to impose fiscal restraints on its fledgling municipal electric utility. Now, voters will likely vote on the city?s ability to tap its general fund in order for the municipal utility to expand. The question came in response to a voter initiative that would prevent the city from using general funds to support the utility operation. The initiative, backed by significant funding from Southern California Edison, would also restrict any utility revenue from being transferred to the general fund. The initiative qualified for the ballot last month (see Circuit , May 1, 2004). At a May 25 meeting, the council voted 4-0 to have the city staff develop a report on the potential impacts of such funding limits on its muni by June 22. The study will address the fiscal impact of the initiative on the utility and the city, including the city?s ability to fund transportation, schools, parks, and open spaces and to attract and maintain businesses. Under the state elections code, the council has until June 25 to either adopt the initiative as a city ordinance or forward it to the Riverside County registrar of voters to be placed on the November 2 ballot, according to Alice Reed, city clerk. The fast-growing Riverside suburb of 155,000 people began serving new homeowners and businesses early this year through its municipal utility, which ENCO Utility Services operates under a long-term contract. Sempra Energy supplies the system. The city offers service only in so-called greenfield areas, which are vacant lands slated for new construction. Southern California Edison continues to serve established areas of the city. Proponents of the initiative say they are not against the municipal utility but want to prevent further general fund subsidization, said Marcia Amino, who helped spearhead the initiative. If successful, the initiative ?would constrain us dramatically,? said Tom Breitkreuz, who directs the utility for the city. ?We?d still have the finances to move forward, but slower,? he added. The city is able to get developers to finance up to 90 percent of the infrastructure costs for electric service, according to Breitkreuz. It can borrow additional money from ENCO for the rest and pay off the debt with proceeds from the sale of electricity. After losing some businesses to neighboring Riverside, the city hopes to offer new businesses discounted electricity rates as an incentive to move to Moreno Valley, said Breitkreuz. Riverside, he noted, provided Target a $600,000 electricity discount as an incentive to move into its jurisdiction from Moreno Valley. Moreno Valley is one of several cities that have started their own municipal utility agencies, including Rancho Cucamonga and Hercules, Breitkreuz said. Chula Vista and Irvine also are considering such a move.

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Moreno Valley Muni Expects Ballot Showdown

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