News

Opinion: No on Measure L

Let's direct utility funds to climate-action programs

Measure L, which would affirm the city's practice of using gas revenues to pay for basic services, will be decided by voters in the November 2022 election. Embarcadero Media file photo.

I object to a major provision of Measure L and call for voters to reject it. Instead, I propose a future alternative measure I call "Kick Gas" that would go much further in support of Palo Alto's decarbonization goals.

Don Jackson. Courtesy Don Jackson.

My objection to Measure L is that profits from the city's gas utility will be transferred to the general fund; Kick Gas would retain these profits in the utility, within a special projects reserve, where their use would be dedicated to additional programs to help customers transition off the gas utility. A significant caveat to consider is that the law regarding the use of utility profits is complex and unclear, and Kick Gas may not be easy, or even possible. But I think we should make the time and effort to try to explore this option.

If gas utility profits are transferred to the general fund, they'll be allocated among all the competing budget items that the City Council considers. I understand and respect that these are very difficult tradeoffs to make, but I believe directly funding our climate change programs takes priority.

Palo Alto's decarbonization programs and staffing reside primarily in its utility, funded by that budget, not via the general fund. Therefore, to allocate the gas utility profits exclusively for decarbonization efforts, this money must remain within the utility.

I fear that authorizing the transfer of gas utility profits to the general fund for non-decarbonization use, while simultaneously calling for utility customers to make financial sacrifices to electrify, may be perceived as contradictory or hypocritical, potentially lowering support for these programs, and detract from the city's "moral authority" as a leader on climate action and sustainability.

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Measure L seeks to keep gas utility rates at their current levels, and its supporters state: "By raising the cost of natural gas, the city is acting in alignment with its sustainability goals." Kick Gas would also maintain gas utility rates at these high levels but would go much further by ensuring that all gas utility profits be spent exclusively on our climate goals.

These are complex topics, and I'm concerned that my objection to the general-fund-transfer provision of Measure L is being confused and conflated with other arguments against Measure L.

The accompanying table compares the climate goal support of Measure L, Kick Gas and the Libertarian/Anti-Tax position.

Contributed chart.

Unfortunately, the November ballot has been finalized, and the flawed Measure L cannot be changed.

Measure L pays only lip service to our climate goals. Therefore, I call for a "no" vote on Measure L. If we are serious about decarbonization, let's return at the next election, with Kick Gas.

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Don Jackson is a former member of the Palo Alto Utilities Advisory Commission. He can be reached at dcj@clark-communications.com.

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Opinion: No on Measure L

Let's direct utility funds to climate-action programs

by Don Jackson / Contributor

Uploaded: Fri, Oct 14, 2022, 6:51 am

I object to a major provision of Measure L and call for voters to reject it. Instead, I propose a future alternative measure I call "Kick Gas" that would go much further in support of Palo Alto's decarbonization goals.

My objection to Measure L is that profits from the city's gas utility will be transferred to the general fund; Kick Gas would retain these profits in the utility, within a special projects reserve, where their use would be dedicated to additional programs to help customers transition off the gas utility. A significant caveat to consider is that the law regarding the use of utility profits is complex and unclear, and Kick Gas may not be easy, or even possible. But I think we should make the time and effort to try to explore this option.

If gas utility profits are transferred to the general fund, they'll be allocated among all the competing budget items that the City Council considers. I understand and respect that these are very difficult tradeoffs to make, but I believe directly funding our climate change programs takes priority.

Palo Alto's decarbonization programs and staffing reside primarily in its utility, funded by that budget, not via the general fund. Therefore, to allocate the gas utility profits exclusively for decarbonization efforts, this money must remain within the utility.

I fear that authorizing the transfer of gas utility profits to the general fund for non-decarbonization use, while simultaneously calling for utility customers to make financial sacrifices to electrify, may be perceived as contradictory or hypocritical, potentially lowering support for these programs, and detract from the city's "moral authority" as a leader on climate action and sustainability.

Measure L seeks to keep gas utility rates at their current levels, and its supporters state: "By raising the cost of natural gas, the city is acting in alignment with its sustainability goals." Kick Gas would also maintain gas utility rates at these high levels but would go much further by ensuring that all gas utility profits be spent exclusively on our climate goals.

These are complex topics, and I'm concerned that my objection to the general-fund-transfer provision of Measure L is being confused and conflated with other arguments against Measure L.

The accompanying table compares the climate goal support of Measure L, Kick Gas and the Libertarian/Anti-Tax position.

Unfortunately, the November ballot has been finalized, and the flawed Measure L cannot be changed.

Measure L pays only lip service to our climate goals. Therefore, I call for a "no" vote on Measure L. If we are serious about decarbonization, let's return at the next election, with Kick Gas.

Don Jackson is a former member of the Palo Alto Utilities Advisory Commission. He can be reached at dcj@clark-communications.com.

Comments

Mama
Registered user
Crescent Park
on Oct 14, 2022 at 11:51 am
Mama, Crescent Park
Registered user
on Oct 14, 2022 at 11:51 am

How about the utility just lower their rates and give some back to the inflation-beleaguered residents?


Online Name
Registered user
Embarcadero Oaks/Leland
on Oct 14, 2022 at 12:12 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Oct 14, 2022 at 12:12 pm

"How about the utility just lower their rates and give some back to the inflation-beleaguered residents?"

Hah. I wish. Because the city has long seen us as cash cows and the Mayor has bragged about the city's strength in profiting from utility customers as a justification for pursuing the risky $144,000,000 Fiber network while oddly ignoring the fact that CPAU is a monopoly and we have no choice.

So tired of the city justifying these ripoffs by claiming they're like PGE's shareholder dividends with the big difference that the CITY -- not us -- is the only shareholder and it gets to waste OUR money on all sorts of nonsense over which we have no say.


BobH
Registered user
Palo Verde
on Oct 14, 2022 at 12:21 pm
BobH, Palo Verde
Registered user
on Oct 14, 2022 at 12:21 pm

I am voting No on Measure L.

I think the money should be used to building out the electrical power grid in Palo Alto so we can support all electric and move away from gas. Putting the money into the general fund is the wrong thing to do.


Annette
Registered user
College Terrace
on Oct 14, 2022 at 12:39 pm
Annette, College Terrace
Registered user
on Oct 14, 2022 at 12:39 pm

Only specific tax measures come with the guarantee that revenue will be spent as promised. There are many demands on the General Fund and no predicting which ones will percolate to the top each year and be funded.

I am also voting no on this measure. I don't like being asked to make legal a practice that the courts have determined to be illegal. I hope Mr. Jackson's idea gains traction so that it is at least studied.


Eric Filseth
Registered user
Downtown North
on Oct 14, 2022 at 5:12 pm
Eric Filseth, Downtown North
Registered user
on Oct 14, 2022 at 5:12 pm

In arguing for a “no” vote on Measure L, former Commissioner Jackson doesn’t mention what’s likely the most important aspect to most Palo Altans: that without it, there will be millions of dollars in cuts to city services going forward. As one of the people whose job it was to help decide on such cuts two years ago, and who saw the pain so much of our community felt over them, I can attest to the gravity here.

Yet somehow Commissioner Jackson’s argument for a “no” vote on Measure L does not even mention this. No legitimate assessment of the pro’s and con’s of any ballot measure ducks that measure’s most important community issue.

In fact, assuming it can be done legally, the “Kick Gas” proposal sounds a lot to me like a carbon tax whose proceeds would go towards Climate actions. Independent of Measure L, that’s a concept whose time many Palo Altans think has come, including me. But demanding that it must only come at the expense of closing libraries and cutting public safety, which the piece above implicitly does, presents a false choice to Palo Altans. It’s too bad Commissioner Jackson’s table doesn’t show another column where we both pass Measure L and also consider such a program.


The other “naw, that stuff is no big deal” posters above represent a legitimate expression of personal values and preferences. But anybody else reading this – make sure you understand what’s at stake here, and that those are your values and preferences too. It was a big deal to a lot of Palo Altans in 2020, and it will be again without Measure L.


OnlineName
Registered user
Embarcadero Oaks/Leland
on Oct 14, 2022 at 6:05 pm
OnlineName, Embarcadero Oaks/Leland
Registered user
on Oct 14, 2022 at 6:05 pm

I don't think the posters above are saying "no big deal" as suggested but rather questioning the "very big deal" of money the city STILL plans to throw at NEW big-ticket items that cost SO much more than what this tax would net while threatening to cut current services.

Eric, you pride yourself on being spreadsheet whiz so please run the numbers for us: how many years of continued utility 'overcharges " are needed to fund Fiber and the new gym and appliance purchases vs the services you're threatening to cut?

Extra credit for naming a single NEW project rejected or for acknowledging money was wasted on like The Junior Museum and Zoo nobody wants to pay $18 for each visit.


resident3
Registered user
Another Palo Alto neighborhood
on Oct 14, 2022 at 8:50 pm
resident3, Another Palo Alto neighborhood
Registered user
on Oct 14, 2022 at 8:50 pm

@Annette,

“Only specific tax measures come with the guarantee that revenue will be spent as promised.”

Not to forget that the business tax has the Council “compromise” to spend it in a negotiated manner by the business lobbyists.

@Eric,

“– make sure you understand what’s at stake here, and that those are your values and preferences too”

Lack of accountability on how the City spends money and how Council plans to take risks on projects that nobody asked for (like the fiber idea) is a big concern for me. Can you share why you think this would be nothing to worry about?


Rebecca Eisenberg
Registered user
Old Palo Alto
on Oct 15, 2022 at 3:08 am
Rebecca Eisenberg, Old Palo Alto
Registered user
on Oct 15, 2022 at 3:08 am

I wonder about the incentives created by Measure L, and the potential impact it may have on electrification and progress towards renewable energy sources.

Specifically, if the City grows reliant on revenue created from gas use, will it pursue measures that will reduce gas use, as it promised?

IMHO it is rarely wise for rewards (revenues generated from gas use) to conflict with goals (electrification). As such, this tax strikes me as off the mark.

It's too bad that the City chose not to propose a large business tax, like Mountain View's recent Google tax, East Palo Alto's Amazon.com tax, and EPA's large landlord tax, all of which passed by more than 70% of voters. Instead our Council chose a gas transfer tax and a regressive business tax that exempts billionaire landlords.

The City really needs the money. But some of California's biggest problems were caused by bad taxes that proved impossible to repeal - e.g. Prop 13, particularly its windfalls for big corporate property owners. So I am not sure that a bad tax is better than no tax.


Anonymous
Registered user
Duveneck/St. Francis
on Oct 15, 2022 at 9:12 am
Anonymous, Duveneck/St. Francis
Registered user
on Oct 15, 2022 at 9:12 am
T. PAR
Registered user
Midtown
on Oct 15, 2022 at 2:21 pm
T. PAR, Midtown
Registered user
on Oct 15, 2022 at 2:21 pm

I'm voting "No" for the simple reason that this practice obfuscates the collection and spending of money. The bill we pay for utilities should go to utilities. We should be "billed" for other programs -- those in the general fund -- separately.

When we pay our gas bill, we don't see how much of that is going to other programs. If they need to raise money for other services, they should do it in an explicit way that is transparent and promotes accountability. How many of us paid attention to this practice before it was determined to be illegal?

I don't respect any attempt to hide what's going on by making it hard to track.. Let's have it be clear where money is coming from and where it is going. If we need to make hard decisions between services and increasing payments, let's be clear and make those decisions explicitly. Let's NOT let there be a shell game to move money around. This is especially important as services and utilities costs go up. How would we know how much of our gas bill increase is due to utilities costs vs. the cost of other programs?

Again, "No" on this from me.


Eric Filseth
Registered user
Downtown North
on Oct 15, 2022 at 5:41 pm
Eric Filseth, Downtown North
Registered user
on Oct 15, 2022 at 5:41 pm

@Online, et al

Fiber: there is no citywide fiber project at this time (other than the current dark fiber network, which serves businesses and generates a small surplus – it’s why the Fiber Fund is growing). There might be City residential fiber some day, but a key criteria is it’s supposed to be self-funding. There’s reason to think that could actually happen, but the issue has got a lot of grilling from the UAC and Council, and will get more. If it looks likely to need ongoing subsidies from the General Fund, I expect Council won’t approve it.

Gym: I don’t know of any gym. With the potential private donation gone, I don’t see there being one anytime soon.

JMZ: Tickets are $10, not $18. But folks should remember the JMZ has always needed a subsidy from the General Fund; when it was free, ticket revenues didn’t cover -any- of its costs.

Courts: The courts ruled that most of the utility transfer (all the electrical and part of the gas) did indeed comply with state law, but some (the rest of the gas) didn’t. It’s not accurate to imply the court found the entire concept illegal.

Business Tax: I know of no agreement with any business interest on how business tax money would be spent.

I should add that nobody (well, almost) on Council liked the situation we found ourselves in with respect to the Silicon Valley Leadership Group et al. Many of us thought the chances of passage were still reasonably good, even in the face of a massive opposition campaign. But the risk of getting nothing was significant, and the consequences if that happened so severe to the community, that we held our nose and made the deal.

That some folks in our community would now intentionally choose that scenario, that we dreaded so much that we felt we had to do what we did - I find that just astonishing. But values and preferences.


Online Name
Registered user
Embarcadero Oaks/Leland
on Oct 15, 2022 at 10:24 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Oct 15, 2022 at 10:24 pm

Well, if Fiber to the Home isn't on the table, why is the city trying to get advance deposits from residents? Why not take it off the table instead of citing a flawed survey where there way to respond you didn't want it?

Why not simply say the city's going to concentrate on the electrical grid instead?.

Re a new city gym, please see the 9/14 article entitled:

Palo Alto City Council candidates tackle top issues at Tuesday forum
Seven challengers united over higher density housing, new city gym

by Gennady Sheyner / Palo Alto Weekly

Web Link


Rebecca Eisenberg
Registered user
Old Palo Alto
on Oct 15, 2022 at 11:08 pm
Rebecca Eisenberg, Old Palo Alto
Registered user
on Oct 15, 2022 at 11:08 pm

Eric,

With respect, that "massive opposition campaign" was a handful of people, few of whom are eligible to vote in Palo Alto.

Similarly, the surveys that were conducted had multiple, enormous problems. The questions that were asked were vague and misleading. The tax itself was not described well. Numerous community members including myself spoke at every meeting that the surveys were discussed in order to point out the invalidating flaws with the surveys.

What would have been easier -- and far less costly to the taxpayer -- is if the City would have looked into taxes that passed by wide margins in neighboring communities and proposed the same taxes. That is why many of us pointed out the 2 EPA large business / large landlord taxes and the MV Google tax. These cities are next door.

Had City Council proposed large business / large landlord taxes like EPA and MV, it is close to certain that the same result would have followed. Not only did voters pass those taxes by wide margins, but also neither Amazon.com -- the company that pays the majority of EPA's tax -- and Google - the company that pays the majority of MV's tax -- file an opposition statement in the voter guide.

To repeat: Neither Amazon nor Google even filed an opposition in the voter guide, even though both companies knew that they would be paying the majority of the taxes in East Palo Alto and Mountain View.

City Council should have reached out to colleagues in our neighbor cities to discuss. We have Amazon and Google offices here as well, in addition to Tesla, Palantir, Oculus, and more multi-billion dollar profitable companies. To these huge companies, a $30 million tax bill is not a lot, which is why the big companies do not object. They also realize that the improvements to the city serve them by helping attract employees. It's a win-win.

City Council tried to reinvest the wheel (again), and that is why both taxes may fail. We *can* learn from others. To blame voters is unfair.


Annette
Registered user
College Terrace
on Oct 16, 2022 at 8:52 am
Annette, College Terrace
Registered user
on Oct 16, 2022 at 8:52 am

So now this thread is about both K and L. OK; they do go together in that both would provide money for the General Fund.

I take umbrage with Councilmember Filseth's assertion that not voting for K and/or L is equivalent to CHOOSING the scenario of massive service cuts. He's astonished. Well, so am I.

I am astonished at the inference that, should these measures not pass, it is residents who don't vote as he hopes who are to blame for any future massive service cuts.

I am astonished that Palo Alto engages, even a little, in scare politics.

I am astonished that there isn't more introspection about City management.

I am astonished by the growing disconnect between CC and residents.

I am astonished that the City continued the gas utility transfer for as long as it did, a practice found to be illegal.

I am astonished by the arrogance of "we know better than you" (residents) that is a big part of how the City ended up negotiating with the Silicon Valley Business Group, that resulted in a business tax proposal that isn't even close to being relevant to impact.

I am astonished that Ed Shikada and Larry Klein were involved in that negotiation in any way; neither is an elected official.

I am astonished by the frequency of Closed Session meetings. Issues such as how the Fry's site is developed should be discussed in the open, particularly at this time when we are trying to dig our way out of the housing hole we dug ourselves into by supporting a massive level of unmitigated commercial development. As candidate Summa succinctly says, Palo Alto is a community, not a commodity. CC should remember that.

I am astonished that we are a city that folds at the threat of a lawsuit. One outcome of this is the loss of dozens of affordable housing units that were at the President Hotel.

If Councilmember Filseth wants both measures to pass, he might want to let others do the promoting.


resident3
Registered user
Another Palo Alto neighborhood
on Oct 16, 2022 at 9:04 am
resident3, Another Palo Alto neighborhood
Registered user
on Oct 16, 2022 at 9:04 am

@Eric Filseth,

"I should add that nobody (well, almost) on Council liked the situation we found ourselves in with respect to the Silicon Valley Leadership Group et al. Many of us thought the chances of passage were still reasonably good, even in the face of a massive opposition campaign. But the risk of getting nothing was significant, and the consequences if that happened so severe to the community, that we held our nose and made the deal.

That some folks in our community would now intentionally choose that scenario, that we dreaded so much that we felt we had to do what we did - I find that just astonishing. But values and preferences."

About values and preferences and the Silicon Valley leadership group. If the mob offered my family to not abuse us in exchange for something, I would probably have to make some hard choices. In this case, the fear of "some" on Council or the City that led to the closed door beat down by business lobbyists could mean it was irrational or there's more to this that prevented Council from doing what other cities have done, to pass taxes without this "compromise." Then after reducing the tax to practically nothing with the expanded exemptions and caps, the bullies decided how we would need to spend paltry $9 million. I don't see how you fix this later.

While every penny counts, $9 million doesn't wash off the beat down by non-voters calling the shots. The exemptions and caps compared to the growing burden of businesses is steep and practically charity for parties which don't contribute to city services above and beyond as residents do. How much do businesses support the junior museum, or schools? Residents donate millions every year to the schools and other city treasures and have donated gyms and buildings. I don't see how it's even legal to have non-voters and business lobbyists decide what a town can or cannot spend taxes on; this is a precedent I would prefer not to have.


Online Name
Registered user
Embarcadero Oaks/Leland
on Oct 16, 2022 at 11:53 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Oct 16, 2022 at 11:53 am

Thank you, Annette.

I'm also astonished at the dismissive tone and/or blatant insults by the Mayor and CC to legitimate comments and questions from residents when they bother to respond at all.

This is particularly egregious when the comments come from attorneys who know whereof they speak. Must residents file suit like Miriam Green did to get any response from the CC and/or City Attorney and City Manager?


staying home
Registered user
Crescent Park
on Oct 17, 2022 at 1:41 pm
staying home, Crescent Park
Registered user
on Oct 17, 2022 at 1:41 pm

Voting no on measure L. Keep the books simple and have funds generated by the utility say for the utility. Disconnecting the source of revenue from the spending will lead to a lack of accountability. If this means cuts to public services, then raise a tax or bonds for those services.


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