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Several LBCUR leaders to file notice of intent to circulate LB ballot initiative to repeal utility tax entirely on City Hall run utilities (water & gas); Prop J leader/Mayoral candidate Norm Ryan may endorse the measure

Cong. candidate Schipske files notice of intent to circulate ballot initiative measure to eliminate utility tax for residential homeowners;

Councilman Grabinski and Council brush aside pleas for immediate action, instead ask City Manager to report on freezing utility tax revenue at current level if utility rates go up

(August 8, 2001) -- has learned several leaders of LB Citizens for Utility Reform (LBCUR) will file with the City Clerk a notice of intention to circulate a ballot initiative to repeal entirely LB's utility users tax on City Hall run utilities (water and gas). The filing is expected shortly and could take place as early as today.

The measure may also be endorsed by Mr. Norm Ryan, who overcame City Hall opposition and led Prop J (cutting the utility tax from 10% to 5% over five years) to a near 70% voter victory in November. It is consistent with his position, stated publicly in March (before he was a Mayoral candidate), when he told LBCUR's inaugural meeting he favored a ballot measure to end what he called City Hall's "double-dipping."

Currently, LB utility consumers pay non-commodity charges paralleling investor owned utilities even though City Hall's cost to provide the services is less; City Hall pockets the difference mainly for the General Fund. City Hall then imposes the utility tax on its own utility bills and produces additional revenue. The ballot measure would eliminate the latter.

Collecting the necessary petition signatures for the new utility tax cutting measure will likely be easier than for Prop J. Last year, the City Attorney's office initially told Mr. Ryan, in err, that his then-proposed measure required over 20,000 signatures to qualify for the ballot. That changed after the Howard Jarvis Taxpayers Association contacted City Hall and noted that under Prop 218, only a few thousand signatures are required. has also learned that on July 18, Ms. E. Gerrie Schipske, who lost to LB Congressman Steve Horn in November 2000 by less than 1% of the vote and has indicated she wants a rematch in 2002, quietly filed a notice of intent to circulate a LB ballot initiative to eliminate the utility tax on all utilities (telephone, electricity, gas and water services) "in or upon a residence occupied by such individual, provided such individual is the legal owner of such residence..."

Before facing Cong. Horn, Ms. Schipske would have to prevail in a Democrat primary against former congressional candidate Erin Gruwell and incumbent Assemblywoman Sally Havice who have both indicated they intend to run.

Meanwhile, at the City Council's August 7 meeting, incumbent Councilman and Mayoral candidate Ray Grabinski brushed aside pleas from LBCUR members to take immediate action and, with his Council colleagues (7-0, Baker and Kell absent), requested a report from the City Manager to discuss freezing City Hall's utility tax revenue at the current level even if utility rates go up. LBCUR co-chair John Donaldson called Grabinski's action a "milquetoast motion."

LBCUR is the grassroots group that on May 31 filed a class action lawsuit against LB City Hall, seeking LB consumer rebates for disproportionately high natural gas commodity rates passed on by the City Hall run utility his past winter. For several months, LB consumers paid significantly higher commodity rates than in neighboring areas served by So. Cal Gas, a policy the suit contends violated LB City Charter section 1502 requiring rates based on prevailing rates among like utilities in the southern California area.

As previously reported on, the LB City Attorney's office has filed a Demurrer to the complaint, denying its central allegations by contending City Hall's utility did, in fact, charge rates based on those prevailing among like area utilities. especially when San Diego Gas & Electric's rates are taken into account. The Demurrer is set for a hearing later this month.

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