Riversiders Against Increased Taxes v. City of Riverside CA4/2

BACKGROUND

For many years, the City transferred excess fees collected from the City-operated

electric utility to the City’s general fund, which provides essential funding for community

services such as police, fire, children’s after-school programs, senior/disabled services.

In 2018, the City was sued in a case captioned Parada v. City of Riverside (Super. Ct.

Riverside County, 2018, No. RIC 1818642) (Parada), in which the plaintiffs argued that

the setting of electric rates at an amount greater than the reasonable cost of providing

electric utility service, which excess was transferred to the City’s general fund,

constituted a tax, which had not been placed before voters for approval. The City entered

into a stipulated settlement agreement by which the City agreed to place its general fund

transfer practices before voters in a ballot measure for the November 2021 election.

On July 20, 2021, pursuant to the Parada, supra, RIC 1818642 settlement

agreement, the City proposed an amendment to the Riverside city charter, adding section

1204.2,1 to authorize the transfer of an amount not to exceed 11.5 percent of the gross

operating revenues, exclusive of surcharges, of…