(March 25, 2001) -- Addressing the first public meeting of LB Citizens for Utility Reform (LBCUR), Prop J (utility tax cut) author Norm Ryan announced he is considering a follow-up ballot measure, spurred by City Hall's conduct when LB natural gas bills soared to more than twice the rates charged in neighboring areas such as Lakewood.
Mr. Ryan, who was repeatedly interrupted by applause at LBCUR's March 24 meeting at Mum's Cohiba Club, said City Hall should rebate huge commodity charges collected from LB consumers, adhere to what he called a real moratorium on disconnections and said he was considering a new ballot measure (which he dubbed "Son of J") to end City Hall's practice of charging utility tax on City Hall-operated utilities. (Extended transcript excerpts posted below.)
Weaving together several themes, Ryan told the Saturday morning gathering of roughly 75 people that LB's utility bills, utility tax, Queensway Bay development and City Council accountability aren't matters of political ideology. "This isn't a matter of left or right, it's a matter of right and wrong," Mr. Ryan said.
Speakers at the meeting, including Mr. Ryan, said they believe City Hall violated City Charter section 1502, which requires City Hall-run utilities to charge rates prevailing for other like area utilities, when City Hall let LB natural gas bills soar past neighboring communities [from roughly December 2000 through February 2001].
LBReport.com was the first LB media outlet to discuss the City Charter sections governing City Hall-run utilities in January.
As also reported by LBReport.com, City Hall uses City Charter section 1502 to justify charging consumers more than the LB Gas Dept.'s actual operating costs; the LB Gas Dept. could deliver service for less but charges the "prevailing" rate charged in neighboring areas; for years, City Hall has used this "profit" to help feed the General Fund. Meanwhile, City Hall simultaneously collects utility tax on city-run utility bills (gas and water) which also feeds its General Fund.
Mr. Ryan called this practice "double-dipping" and said his new contemplated ballot measure would stop it.
Other speakers included Bixby Knolls business advocate, community activist and former LB Police Advisory Commission member Mr. John Deats.
Mr. Deats, who was introduced to the crowd as a "law and order" advocate, read City Charter section 1502 verbatim twice, drawing applause by declaring, "I find a consumer protection built in that section that's not being obeyed." (Transcript below)
Mr. Deats added, "We want a refund of all those overcharges to date that have been imposed on all of us, businesses and citizens alike."
The meeting's keynote speaker was Ms. Medea Benjamin, the Green Party's recent candidate for U.S. Senate from California. Ms. Benjamin said, "We want reliable, clean, affordable sources of energy and gas for this state, and we don't care if it's a Republican or it's a Democrat in power. We say that we want to put the people back in power..." (Further excerpts below).
The meeting attracted politically and geographically diverse attendees ranging from Republicans to Greens, LB businesspeople to neighborhood activists, spanning areas from Bluff Park to NLB. Some City Hall officialdom also audited the proceedings, including Council incumbents Dennis Carroll and Ray Grabinski; Mark Taylor, Chief of Staff to Vice Mayor Dan Baker; LB Gas & Electric Dept. Director Chris Garner. LB area political consultant Michael Orlito was also present.
Transcript excerpts follow below. Not all speakers and comments are included; transcript is arranged by content, not order of speaking.
I'm going to read you City Charter section 1502. Quote, "The rates to be charged users for any services or commodities supplied by any public utility owned and operated by the city shall be based upon the prevailing rates for similar services and commodities supplied or sold by other like utilities, whether public or private, operating in the southern California area." Unquote.
I'm going to read that to you again with a little bit of emphasis and explanation, just in case anybody has difficulty. It's pretty bonehead simple to me.
But it says that the rates that we're going to be charged for any services or commodities, so it doesn't matter whether it's the gas or the transportation bill to get it here, that's the service.
...And the language is not vague. It doesn't say it could be, or should be, or may be, based on upon other prevailing rates. It says it shall be. And what I learned in High School English, shall is a mandate. There is no option, pure, plain and simple.
Now, am I the only one in reading or listening to that, that does not find any guarantee of profitability in there for the city? Do I find any guarantee of a return on their investment? Do I find any guarantees at all? No.
I find a consumer protection built in that section that's not being obeyed. [applause]
We got along quite well for a long lot of years, and personally, speaking for myself alone in this instance, I don't have a problem with the Gas Department being an enterprise operation. I do have a problem that the first time things got really tough, there was this reflexive action, I guess you'd call it a knee-jerk reaction, to protect the city's General Fund and its reserves and not protect the public and the businesses. [applause]
And I contrast that to the city of Palo Alto who did the reverse. They pledged their reserves to protect their citizens when the stuff hit the fan.
I have to label the city's response to this crisis thus far as profoundly disappointing, inadequate, insulting. In fact, I think that actions to date could be labelled downright obscene.
It's as appalling as being handed an aspirin for an abdominal aortic aneurysm. The patient's gonna die.
There's also a smokescreen about trying to talk about prices as bundled versus unbundled. Well section 1502 as I see it doesn't given any wiggle room. If it isn't a commodity, it is a service. If it isn't a service, it's a commodity. It is, has to be looked at as bundled. We should not be paying more, we should never have paid more, than other surrounding communities like Lakewood or Cerritos.
Thus far, the committee of which I am a part, is consensed on a relatively few things, and we certainly welcome your input for other things here today. But among our consensed demands are:
So we want our money back now. [applause]
In terms of the do-ability of this, I believe that Councilman Carroll who is with us has acknowledged on a...television call in show that that is in fact do-able by will of the City Council. The text of his full comments can be viewed at...LBReport.com...
...When I read about the city having more or less followed rather than led, at least that was my perception, in filing a lawsuit about that, my initial reaction was to be pleased...My initial reaction to that was pretty positive, I thought yeah, that's what we need to be doing.
And then I got a wake up call last night from a couple of my colleagues on this committee, and it kind of, you know pardon by French, it tripped my bullshit detector. And I realized, how many years is it gonna be before this thing gets litigated? Am I still going to be alive? How many people are going move out of the city in the meantime? How many businesses are going to collapse? How many businesses are going to relocate? That's the last thing we need to be hanging our hat on.
We deserve to be made whole, and we deserve to be made whole now. [applause]
If the city is fortunate enough to collect treble damages somewhere down the road, fine. Let them put that as profit in the General Fund. I'm not looking to get a piece of the treble damages.
I want to be made whole now. I want you to be made whole now.
And to summarize our demands:
...Medea Benjamin [keynote speaker, transcript below]...was the Green Party candidate for federal Senate in the state of California. And...I am the chairman of the Republican 54th Assembly district central committee. The reason I point that out is that look around you. You have Democrats...You have Green Party members. You have Republicans.
It's not about left, or right. It's about wrong or right. [applause]
And I've been asked to talk about accountability. And it's kind of hard to talk about accountability when the status quo wants to convince you that it's all about shades of grey. Because in shades of grey, people can escape accountability, they can escape consequences.
It's very simple, And I know that talking about simplistic things makes you seem unsophisticated. OK, I'll buy it. I'm unsophisticated. Alright, I just want to know whose fault it is and I want them to pay the price.
All I want to know is what is right, and what is wrong, and if we allow people to talk to us about border prices or El Paso or lawsuits or commodity versus transmission, that's subterfuge. That's asking you to look at shades of grey and you are never going to get accountability because you're going to be bogged down in the details.
...So let's talk about what's wrong and what's right, and when I talk about these things, it may not appear to you that it's about our gas problem, but they are, because the Gas Dept. takes its culture from the City. And in the City, everything sort of goes downhill, well certain things go downhill and you know what they are, so the Gas Dept. is simply doing what they know.
So what's wrong?...It's wrong that the City [Hall] illegally campaigned against the [Prop J] tax cut using resources. It's right that we should have fair and balanced presentations. This regards the Measure J initiative, where the City basically put in the utility bills that little pamphlet saying how great it was that we have the utility users tax that we have. You know, how it paid for this and that. That was campaigning, and a judge decided that yeah, that did pass [exceed] the bounds.
Now, I don't know what's going to end up with that. I mean, we're still pursuing it. And we may eventually settle. I mean, we may not get the City Manager to fork over the misappropriation, but one of the things in the settlement we'd like to see is a recognition of LBCUR as a legitimate, recognized body representing the consumer, the citizens, the users of our utilites so that when they are trying to present something that's supposed to be fair and balanced, we can be the equal time. [applause]
It is wrong to narrowly interpret [City Charter section] 1502 to say well, commodity, transmission. OK, let's say I even bought the argument, which I don't, OK. Fine. You've decided for purposes of protecting the general fund and basically putting the public at a disadvantage that you're going to unbundle something which has been bundled, so therefore, hey, the commodity is the prevailing rate....Funny. When I looked at my bill, nobody unbundled commodity and transmission when they charged me that tax.
I mean, if the City Attorney wants to be consistent, then the only thing I should be taxed on for 4.5%, 8%, 9%, whatever it is, is on the commodity, right? [shouts of "right," applause] I mean, if you're gonna try to bamboozle us, at least be consistent about your bamboozling. [laughter]
It's wrong to have lines of people at the Gas Dept. being threatened with disconnects. [applause] It's right to protect and help those who are the most vulnerable.
You know, I heard somebody talking about a moratorium, OK. Prove it. I was there at the City Clerk's office...and I heard our city service people threatening people with cuts.
Now maybe it was an empty threat because they knew there was a moratorium on, or maybe it is that there really isn't much of a moratorium because everytime you talk to a Chris Garner or a Henry Taboada and you try to pin 'em down, it becomes yes, there's a moratorium on disconnects, in fact I hear Council people tell me that all the time, and yet when you talk to the people that are supposed to be carrying it out, what do they say? Weasel words, like well there's a moratorium on those who are atempting to pay.
I'm serious, that's the language they use. Attempting to pay. Well, what determines good faith or attempting to pay? We do. Alright, and you ask and you push again. OK, so there has not been a single disconnect since you've imposed this moratorium. What's the answer supposed to be if there's a moratorium. What's the answer? No. It's a simple word. No.
Will the City Manager say no? Will Chris Garner say no? OK. So there's no moratorium. It's wrong.
...It is wrong for our elected officials, our Mayor and our City Council, to hide behind city staff without censure. It's right that city employees be responsive and offer realistic solutions.
And what I'm referring to here is having Henry Taboada out there saying the most inane and stupid things like, put it [utility bills] on your credit card. We made a mistake, we were asleep at the wheel, you go into debt.
OK, or when questioned about a possible double-dipping, you know, using the utility users tax on the gas that we use, which by the way also generates a profit for the General Fund, two streams of money going from the same place to the same place. And what was the response? It was the will of the people that the Gas Dept. make a profit during a crisis.
Alright you try to pin 'em down too. You try to say, well no, we're not making any money on the commodity. OK. The next question out of our City Councilpersons' mouths should be, what about the transmission?
I mean these are weasel words. And our City Councilpeople at any time could censure these inane and idiotic comments. They could do more questioning. They don't.
And if they don't, that's a sin of omission. [applause, continuing] If they don't disagree, if they don't censure, then they agree and that's wrong.
It's wrong that Queensway Bay is going to cost us a million and a half a year for a parking structure that most of us know is for a project that is not going to succeed. OK. [applause] It's right that we take the scarce, precious funds that we have to cover our mistakes, the losses that we generate during the bad times in place of the profits that we made during the good times. It's right to use that money to cover their mistakes, to do some sort of set-aside.
Private gas companies basically have a mandate by the state, and I believe there's also a federal mandate, to have a set-aside, basically for people during the winter, for poor, for whatever. It's voluntary for a lot of the municipally-owned utilities. It's really sad that when we talk about big corporations that they're actually showing a little more concern for their consumers than our own elected officials do. [applause]
I've talked about wrong or right, and maybe the emphasis sounds like it's on the wrong because I know a lot of people look at us and say we're naysayers. But let me tell you. I'm not a naysayer. I think we have a beautiful city. I think that we have resources, that we have a great location, that we have the weather, we have all this potential, and I'm glad to live here, right.
We're blessed, and yet that doesn't mean that we should basically sit back and allow ourselves to be messed over with. I think that it is our duty to make sure that we get a city that's run in the spirit that the Charter was originally written for. Not for the benefit of downtown, not for the benefit of their friends, but for the benefit of the people, all of us.
And what is it that all of us want? Now, I'm batting clean-up here, so let me talk about the things that I'm hearing.
We want a rebate. [applause]
I know I'd like to see an acceleration of the UUT [utility users tax reduction], permanent.
We want a moratorium, a real moratorium on disconnects. Nobody should have to choose between meat and heat.
Actually John Donaldson came up to me and said, since we're talking about accountability we should have a pledge from our city officials to basically shut out the lobbyists. And I'll say that, that that's probably something you might want to do.
But I will warn you that I don't think that we should save our politicians from themselves. [laughter] If they just really can't say no, maybe they ought not be our representatives. [applause]
...I am considering maybe we should rectify this double-dipping situation, something I hadn't even thought of. If we're already going to make a profit off gas, if we're already going to be charged this hidden tax, this painless tax, then maybe we ought not have a utility users tax on top of city owned utilities since we already make money off of it for the General Fund. [applause]
Let me put forth to you that one of the things I would like to do at this meeting, and we're here to listen, but I'm here to throw out an idea, is that maybe that we get in motion a utility initiative, you know "Son of J,"...and rectify the mistake I made the first time which was not recognizing that maybe we should stop the double-dipping...
And I would like to say...just keep it simple. It really is. Don't let anybody confuse you with the mumbo-jumbo...
And right now I see that something is wrong. And it's up to us to make it right. [applause]
The Long Beach City Council has failed us again. They've made mistake after costly mistake on this current energy crisis. And we are angry.
This time, it's personal.
First, they should have anticipated the problems far in advance and should have been in a position to counter it. But they failed.
...Secondly, their poor judgment and inaction was followed by even more poor judgment and inaction.,,And it was only after January that the city tried to initiate some rather feeble measures to mitigate the crisis in the form of tax reductions and level pay plans.
But this is a tax reduction on energy bills that were already 500% greater than normal...
Thirdly, they did not take immediate action to reach out to their constituents [applause] with practical solutions to offset the effects of a bad situation gone far worse...
.,.[W]hen we're talking about what the politicians have learned, it's try to hide it from the ratepayers. Here [in Long Beach] your local politicians are not very smart. They're not hiding it from you as the ratepayers. What they're doing in Sacramento is they're trying to hide the energy increase by taking it out of the general budget.
...What we have to say now is, the politicians who are representing us, whether they are Democrats or Republicans. One, look at the all the money that these energy companies have given to both of the mainstream political parties...They are bipartisan. They are making an investment. And the investment is that they will have absolute ability to screw the consumers with skyrocketing prices.
...Look in Sacramento. We just did a little bit of research to see how much, or who, was taking money from these companies. I thought maybe 50%, I thought maybe more Republicans than Democrats. Guess what? Not true. All of them. 98% of them taking money from these companies. Democrats, Republicans, all of them.
Does that cause you to wonder why they are giving away our surplus? Does it cause you to wonder why somebody hasn't stood up and said, something stinks, something is rotten with what's going on. And if these companies refuse to negotiate with us in good faith, guess what, there is the power of eminent domain that the Governor of this state has...
We are now negotiating behind closed doors, the Governor, to buy the transmission grid...Is there any reason in the world to be paying three time the market value of a broken down grid that needs a billion dollars worth of repairs? No reason in the world. The only reason is that Governor Gray Davis took over $500,000 from those very companies.
And he sees his fate tied up in those companies. But guess what? Our fate is not tied up with those companies.
We want reliable, clean, affordable sources of energy and gas for this state, and we don't care if it's a Republican or it's a Democrat in power. We say that we want to put the people back in power...