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LBCUR Co-Chair Donaldson Presses Council To Agendize Discussion of City Charter "Consumer Protection" Section 1502; Also Says City Hall Shutting Off Gas To Some Consumers For Non-Payment

City Manager Details Significant LB April Rate Cut, Suggests It May Help Compensate For Past High Charges; Confirms Gas To Some Customers Is Being Shutoff If Made No Payments Since December

Councilmembers, Mayor & Manager Say Nothing Re Charter Requirement

We provide extended transcript excerpts, below

(April 4, 2001) -- In response to statements by the co-chair of a recently formed LB grassroots group, City Manager Henry Taboada said City Hall's low April gas rate (roughly .19 cents per therm compared to So. Cal Gas' April rate of .69 cents per therm) reflects a price reduction expected to be approved by the State Lands Commission on April 24 which City Hall is crediting to LB consumers now, suggesting this may help compensate for past high prices. first reported City Hall's dramatic April rate cut hours before the April 3 Council meeting. (Coverage at: LB April Gas Rates)

The City Manager's comments came in response to statements made by John Donaldson, co-chair of LB Citizens for Utility Reform, during the public comment period reserved for non-agenidized items. provides extended transcript excerpts of the parties' statements, below.

Mr. Donaldson pressed Councilmembers to agendize for public discussion City Hall's policy on City Charter section 1502, which specifies that rates by City Hall-run utilities be based on the prevailing rates for other like utilities, public or private, in the southern California area. This past winter, City Hall allowed its LB Gas Dept. to charge roughly $1.40 to $1.60 per therm while Lakewood consumers (served by So. Cal Gas) paid roughly .60 to .70 center per therm.

Councilmembers, the Mayor and the City Manager all remained silent on the City Charter issue.

However, City Manager Taboada requested the floor following a subsequent public speaker and explained the basis for City Hall's low April gas rate.

The City Manager also confirmed the essence of a claim made by Mr. Donaldson that gas service for some LB consumers was being shutoff for non-payment. Mr. Taboada said the shutoffs involved customers who had made no attempt to pay any portion of past due bills since December.

The City Manager's response did not satisfy Councilman Ray Grabinski who subsequently engaged in a colloquy with Mr. Taboada (also in transcript).

Extended transcript excerpts follow:

John Donaldson,
Co-chair LB Citizens for Utility Reform (LBCUR)

...I'm here today to address you on behalf of an organization which I co-chair, which I am proud to co-chair, Long Beach Citizens for Utility Reform.

They've asked me to come to you and ask you to agendize, and I don't mean you as a Council, I mean you as each individual Council member, because we as citizens no longer can bring anything to your agenda, we must ask one of you to do it, and that's what we're doing, asking you to agendize a discussion of section 1502 of our Charter.

During this entire crisis that has impacted the residents of our city, there has been no discussion about that portion of our Charter which we all thought was there to protect the ratepayers of the city. It was almost a consumer protection clause.

In a recent discussion I had with our City Manager, it wasn't a discussion, it was actually a one-liner, Henry told me that the only way that's gonna come up is in the courts or at the ballot box.

I must tell you, many of us as citizens do not understand the interpretation that allows the city to charge the rates that it has charged. And in fact I called the City Attorney about it and he told me that that was attorney-client privilege. And I can't fathom that.

But I must tell you, we suggest setting that aside. Let's not talk about it as a legal issue. Let's talk about it as a moral issue. Let's talk about it as a moral imperative. Let's talk about it as a duty to the ratepayers by you who oversee our utility district.

Anytime we can take $250 million dollars out of a utility, we ought to be able to talk about things that we can do to protect the ratepayers at the most extreme time of need.

We also would like to have a discussion about a moratorium on shutoffs. Now we have been told that shutoffs have not been taking place, but I must tell you this last week I received over 50 telephone calls from people in distress because they had received shutoff notices or they had neighbors who had received shutoff notices. I believe that shutoff notices are going out,

And lastly I want to say one thing about April's utility bills. If we get a rebate from the State Lands Commission, which I know is coming to us as a city, we should rebate that to the taxpayers, the ratepayers of this city, against their December and January bills, not use it to offset rates in the month of April.

It does nothing for our elderly who've already had shutoffs. Or who've imposed a self-shutoff on their utilities. They need to pay their bills and if there's a rebate, they need that money to pay their bills, not given to them against future bills.

City Manager Henry Taboada

...I communicated to you [i.e. the Council] this afternoon late, and you may not have gotten this memo in front of you yet. But let me just indicate that what we've done for the month of April as far as the billing process is concerned, is that if we did nothing more because we have yet to get in front of the State Lands Commission for final approval on the scaling back of the price of gas out of our own gas and oil field, we would be paying 9.5 cents a decatherm [i.e. 95 cents per therm. Although the Manager cited prices in decatherms, for consistency, LBReport cites prices in therms in this transcript, bracketed] and passing that cost on to the consumer.

That is much higher than the So. Cal WACOG [weighted average cost of gas] price which is [.69 cents a therm] and we have elected administratively to adjust the billing cycle so that we take advantage of what in all likelihood will be an approval sometime, on April the 24th, in front of the State Lands Commission, to get the WACOG price for So. Cal Gas as the price for gas in the city of Long Beach.

And if we take into account the savings that will accrue as a result of the backlog of gas that we have purchased at the higher price, that would result in a total credit to the consumer in the month of April of approximately [75 cents per therm] for a net cost of gas of [19 cents per therm] which will create an opportunity for people to pay the lowest prices they've paid in a long, long time and to compensate for the high prices that they have paid in the past.

With regard to the shutoff notice policy, I've advised this Council that we have had a moratorium on the shutoffs of gas service since this gas crisis really came on scene sometime in January. And we have honored that except for the fact that we have people who have not made a payment at all since December of last year.

And those cases where people who have made no attempt whatsoever to make any payment, we have reinstated the cutoffs of those accounts as we would have previous to this gas crisis. So we're simply working with folks to try and get them through this period. We have done everything possible to lower the gas prices so that they can make payments and where the level pay plan and any other payment method is taken advantage of, we have honored their commitment and have not shut off their service.

Again, the only people who've received shutoff notices are those who have made no payments since December of last year.

One other fact that takes place this month as this Council will recall, you authorize dus to reduce the utility tax form 9 percentage points in April rather than October to 8 percentage points and that is taking effect this month as well.

So the combination of these two things, both the utility tax reduction, and this tremendous lowering of the price per [therm] for gas, will result in April gas bills that will be significantly lower than they have been even before this gas prices began and give a lot of people an opportunity to catch up.

[The Mayor thanks the Manager, moves ahead with consent calendar, then Councilman Grabinski seeks the floor for colloquy with Manager re shutoffs]

City Councilman Ray Grabinski
Colloquy With City Manager

Councilman Grabinski: ...Are we in contact with those people, because if they got a large bill, the senior got a large bill they couldn't pay.

City Manager Taboada: Councilmember, what I've said was, that if anybody has made any payment whatsoever since that point, we will continue gas service. What we're cutting off are those people who have made absolutely no payment whatsoever since December of last year.

Councilman Grabinski: I wonder if Mr. Garner can speak to what he told us here in January, because this issue was raised, and what I understood was the people who had not paid before the crisis were the ones that we were cutting off but, am I correct Mr. Garner, you said...

City Manager Taboada: [interrupting] Well, Mr. Grabinski, I am answering the question for the city staff. And my answer to you is that, our policy that I initiated in front of this Council was that we would not turn off anybody during this gas crisis who made any attempt to pay their bills.

Councilman Grabinski: [interrupting] Well let me rephrase, Mr. Manager. I'm not trying to go past you to the gentleman, but he is the one who made the statement so, excuse me for going through you, but would you at least find out? Because that was a statement that I was told. If people were bad pays before, and they weren't paying, they were getting their gas cut off too.

City Manager Taboada: That's correct.

Councilman Grabinski: OK, now if a senior got a double bill and then decided that that was too much for them to pay, what I want to know is, are we contacting those people because they're not paying anything at all? Are we assuming they're just all deadbeats?

City Manager Taboada: What we've assumed is that we have created a level pay plan, we have worked...

Councilman Grabinski: [interrupting] That's not what I asked. I know about the level pay plan. What I'm asking you is, when somebody is not paying their bill because of this energy crisis, I brought the bill in December Henry...

City Manager Taboada: Yes you did.

Councilman Grabinski: Mine was double.

City Manager Taboada: Yes it was.

Councilman Grabinski: And if a senior got a bill that was doubled and felt they couldn't pay, they're not gonna necessarily make a partial payment just out of the blue. So what I want to know is, are we cutting their gas off without knowing whether or not they can handle it?

City Manager Taboada: Well when we send a shutoff notice, there's an opportunity there to respond to a service rep and to try and arrange payments. That's a normal course. That takes place on a regular basis. We don't simply just shut the gas off. We send a notice. We tag. we hang something on the door if we get no response. And we leave it up to the customer to contact us and tell us what their situation is.

So we give 'em three different notices before we do the shutoff. And when they come and tell us that they have extenuating circumstances, that they're willing to set up payment arrangements, or go on level pay plan, or pay any amount that is reasonable for them to pay, we will accept that and continue their service.

So the only people we're dealing with here are those people who've made absolutely no contact with us and have made no payments since December of last year.

Councilman Grabinski [sounding unsatisfied]. Thank you Madam Mayor. I'll get my question answered.

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