July 6, 2016
FOR IMMEDIATE RELEASE
Sarah Henry, Public Information Officer, 510-747-4714
Alameda City Council Approves Placing Utility Modernization Act
on November 2016 Ballot
The Alameda City Council approved placing the proposed Utility Modernization Act (UMA) on the November 8, 2016 General Election ballot. The measure passed with a 4-1 vote, with Mayor Trish Spencer opposed.
Alameda voters will decide this November whether to modernize language that would clarify the technologies included in the existing Utility Users Tax (UUT) and confirm the existing annual transfer of funds from Alameda Municipal Power (AMP) to the City’s General Fund. The transfer and the UUT preserve over $5 million of the City’s General Fund budget, which is dedicated to essential city services including public safety, fire and emergency response, recreation and parks, street and sidewalk maintenance, libraries, and streetlights.
Following a presentation at the previous June 7 City Council meeting, Alameda’s City Council unanimously voted to direct staff to prepare a measure for the November 2016 ballot that would update and modernize the existing City of Alameda Utility Users Tax ordinance and reaffirm Alameda Municipal Power’s General Fund transfer to support the provision of essential city services.
At the July 5 City Council meeting, Assistant City Manager Liz Warmerdam presented information about the UMA, asking the City Council to support putting this measure on the ballot. Expert testimony stated that 90 percent of cities in California have voted to modernize their UUT. Warmerdam explained that eight of the ten cities in Alameda County that have a UUT have already modernized, with the exception of Alameda and Piedmont.
Alameda City Manager Jill Keimach explained that the measure is not about expanding city services, it is about preserving city services currently in place. “This measure will continue to provide essential city services that allow Alameda residents to live in a vibrant, well maintained community.”
Alameda’s existing UUT ordinance was written in 1970, before cell phones were widely used. The UMA updates this ordinance by clarifying what services are covered and equally applying the existing 7.5 percent rate across all providers. Without modernization some telecom providers are not applying the tax correctly. Today, two customers with the same service and the same bill but with different carriers may not be taxed the same. Because some customers are being taxed and others are not, revenues from the UUT have been declining each year. If the UUT is not modernized, this decline will continue to impact core city services.
In addition to updating the UUT, the UMA updates language in the City’s Charter that addresses a practice started in 1914 and officially adopted in 1937, authorizing Alameda Municipal Power to support the City in providing essential city services. Currently, AMP transfers $2.8 million annually to the City (standard operating practice for municipal utility companies) and funds approximately $900,000 for the electricity and maintenance of our street lights. The UMA affirms this transfer and authorizes adjustment in the future to account for inflation. If the AMP transfer is not confirmed by voters, the City could lose up to $3.7 million in funding each year.
“AMP’s transfer to the City has been in place for over a century. Affirming the transfer will continue this existing practice and allow the City to pay for essential services. The transfer has no impact on the current year’s AMP rates as this transfer was already included in the budget,” stated Commissioner Mary Sutter, AMP Public Utilities Board President.