Residents may decide fate of the city’s General Fund Transfer

Riversiders will soon face the decision to keep the city’s General Fund Transfer (GFT) intact or stop it altogether. The GFT has existed in Riverside for nearly 100 years and was created so taxes from electricity and water bills would be shifted into the city’s general fund. The money called into question comes from the electric portion of the utilities. A measure to decide this fate will likely be placed on the November ballot.

The general fund pays for the city parks, museums, streets, the police department, the fire department and other services provided by the city.

Councilmember Andy Melendrez (Ward 2) said many good things have come from the transfer.

“The amount of money we receive, the revenue, certainly helps the city run,” Melendrez said. “It has been a great benefit for our residents. When we went through the economic downturn in 2008, the transfer was a huge help … in recovering from it.”

Melendrez added that he would like to see the transfer continue because a stable budget is important for a city.

The amount transferred every year from the electric utilities into the general fund is approximately $40 to $46 million. This is around 17 percent of the city’s total budget, according to Riverside’s Chief Financial Officer and Treasurer Edward Enriquez.

“Right now, Riverside residents pay a tax on their utilities, especially the water and electric bills,” Enriquez said. “This transfer however, which only affects the electricity portion, needs to be voted on and approved by Riverside’s residents, which is what could happen in November.”

The reason for the vote, according to Enriquez, follows the council’s decision to raise the electricity prices for residents.

In 2018, the city voted to steadily increase the price of the electricity bill by three percent over the following five years, which would benefit the general fund. However, a lawsuit filed in September 2019 argued the mandatory increase was too high and clearly helped the general fund without consent from residents.

In response, Riverside County Superior Court Judge Craig Riemer ruled the increase without consent of the residents violated the California State Constitution.

Enriquez added that a yes vote on the ballot would not cost Riverside residents any additional money. Rather it would approve the transfer. If residents vote no, it will stop any future transfers, leaving it up to the judge to determine whether there is a refund to the citizens for money accrued since 2019.

Melendrez said the city would have to find another way to bring in the money if residents voted against the measure.

“The transfer is really important when it comes to maintaining the quality of services we have here in our city,” Melendrez said. “I really hope residents see how important this transfer really is.”

For the measure to appear on the ballot, it has to be drafted by the Charter Review Committee and then voted on by the city council.

Our reporters could not find anyone to comment on the record against the transfer fund.