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Council OK's Staff's Proposed 25% Natural Gas Discount Limited To Qualifying Low Income Seniors and Low Income Disabled 'Til April 30; Groups Are Already Exempt From Utility Tax

We post Mayor O'Neill's letter to Governor Davis re natural gas situation, below

(January 10, 2001) -- At its January 9 meeting, the City Council approved a staff proposed plan to boost an existing 5% natural gas discount to 25% for qualifying low income seniors and qualifying low income disabled persons.

The Council's action does not affect City Hall's windfall collection of additional utility tax on soaring LB natural gas bills since the qualifying groups are already exempt from the utility tax. The limited reduction would be effective for bills issued starting January 15. The program would end April 30, 2001.

No Councilmember suggested giving LB businesses and residents some out of pocket relief by adjusting the utility tax downward. Although the Council cannot directly affect most utility commodity rates. it can reduce the utility users tax it imposes on LB consumers' gas, water, electric and phone bills.

In November, nearly 70% of LB voters supported Prop J, reducing City Hall's then-10% utility tax rate in annual 1% increments over five years. Had voters not enacted Prop J (which was opposed by City Hall), LB consumers' out of pocket costs would be higher than they are now.

In her "State of the City" address, delivered a few hours before the Council meeting, Mayor O'Neill said voters' reduction of the utility tax had given the City "a case of R.A.I.D.S.: Recently Acquired Income Deficiency Syndrome" and "threatens to impede our progress, but it will not defeat us."

Mayor sends Governor a letter re wholesale gas prices

During the Council meeting, staff revealed that the Mayor had sent a letter to Governor Davis regarding the natural gas situation. We have posted that letter at City letter to Governor re natural gas

The LB Gas and Electric Dept. is a publicly owned, City Hall operated municipal utility. It purchases gas at market rates and delivers it to LB residents and businesses. Under the current LB City Charter, city owned utilities must charge the same amount charged by like utilities. In other cities, publicly owned utilities (such as L.A.'s DWP) can provide city residents and businesses with service at lower consumer cost.

A written report submitted by LB Gas & Electric Dept. Acting General Manager Elizabeth Wright (and approved by City Manager Henry Taboada) indicated the 25% low income senior & disabled discount "will reduce revenues by up to $1,000,000, which will be absorbed within the balance of the Gas fund."

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