GILROY
– The City of Gilroy is bracing itself for a 5 percent to 8
percent reduction in the amount of money it receives from the
Pacific Gas and Electric Company this year.
GILROY – The City of Gilroy is bracing itself for a 5 percent to 8 percent reduction in the amount of money it receives from the Pacific Gas and Electric Company this year.
As part of the utility company’s bankruptcy agreement, the California Public Utilities Commission directed PG&E to reduce its rates and charge its residential and business customers less. Retroactive to January of this year, PG&E will credit its power consumers on their regular power bills.
PG&E spokesman Jeff Smith said customers may see credits on their account worth $10 to $100 depending on the amount of power they consumed.
While the PG&E refunds won’t make residents or businesses wealthy, they will scrape money from the city’s ever-reducing general fund. Gilroy planned on receiving $2.2 million next fiscal year from PG&E. A 5 percent to 8 percent reduction would amount to a $110,000 to $176,000 loss.
“In this case, it’s more bad news for cities,” City Administrator Jay Baksa said.
The city’s general fund revenue is more than $34 million. However, 80 percent of it is earmarked for police and fire service, leaving less than $7 million for everything else, from staff salary and benefits to services such as street cleaning and road maintenance.
Due to the state’s economic troubles, the city already has watched its monies get siphoned off by Sacramento lawmakers struggling to balance their budgets. Baksa says since the early 1990s, the state has taken $16 million of revenue earmarked for Gilroy and redirected it to state coffers.
The bad news from PG&E was accompanied by more positive fiscal developments this month.
PG&E announced it would be able to make its so-called franchise fee payments to cities. Gilroy will take in nearly $587,000 from the transaction.
A franchise fee is a percentage of the gross receipts that PG&E pays cities and counties for the right to use public streets to run gas and electric service.
PG&E also announced this month it would make good on $77.5 million of property tax payments to the 49 counties in which it operates. Santa Clara County received a nearly $7.3 million slice of that pie.
Gilroy gets 9 cents on every property tax dollar generated. In this instance, Gilroy would take in more than $650,000.
