Weekend Open Thread: If Anaheim is Prospering, Why Did Lucille Kring Try So Hard to Raise Its Utility Rates?




You weren't going to need this extra money, were you?

You weren’t going to need this extra money, were you?

We have sort of a “file” on Lucille Kring, containing things that you (and maybe even she) may not remember.  (To get a three year-old primer on her flip-flops, start here.)  With filing having closed for the November election’s political offices (other than where an eligible incumbent seeks re-election), it seems like a good time to remind you (and maybe her) of a few things.  (Well, maybe “a few” is selling our Kring file a bit short.)  Let’s start here:

General Municipal Election – November 4, 2014

Measure N: Anaheim Local Services Measure

Shall Section 1221 of the Anaheim City Charter regarding water and electric rates be amended to:

update language regarding financial reserves, reaffirm and authorize the transfer of money to the City’s general fund to support general City services, remove unnecessary language that duplicates a requirement of the California Constitution, and authorize programs to assist non‐residential and residential customers? (Measure Text / Impartial Analysis)

Measure N: Vote Count

Yes: 21,413      No: 21,535

To recap: Measure N, raising Anaheim’s utility fees, came within 123 votes out of 42,948 of passing.  (If only 62 people had switched from “No” to “Yes,” it would have passed.)

Measure N was Lucille Kring’s baby.  Its primary opponent was the cranky, obnoxious, booming, and disgustingly vicious Council gadfly William Denis Fitzgerald.  (This explains why many of us still listen to the substantive portions of what Fitz has to say: while they are sometimes nonsense, and the sense in them is often drowned out by the gratuitous and bigoted attacks … he’s often right about the policies!  And more importantly, he often sees things that other people don’t see.  So while there are good reasons that Kring hates Fitz, there are also bad reasons: such as he sometimes plays a huge role in blocking her own stupid, vile, and mean plans.)

But that’s not the best part.  How many of you actually read the text of the measure, to see what that innocuous-sounding “update language regarding financial reserves” actually means?  You didn’t?  Well, now would be a great time to do so!

Measure N

I have helpfully highlighted the four substantive changes in Kring’s measure — additions in blue, deletions in pink — and put tiny red numbers next to each for purposes of discussion.  I’ve also highlighted some useful text from the measure in yellow, because sometimes that helps the worst abuses hide.

Change 1: Removing the requirement that Anaheim’s utility rates maintain financial reserves “adequate to assure debt service on bonds outstanding.”

Maintaining the utility agency’s reserves at a high enough level to assure payment of its debt service on bonds ensures that the utility will never have to tap into the city’s General Fund to cover its debts.  Kring, in proposing Measure N, did not want to keep reserve levels that high.  Why?  Do we want the general fund to be more at risk?  Did you even know that you were voting on this two years ago?

Did you realize, when you read the ballot statement, that THIS was what she meant by “update language regarding financial reserves”?

Change 2: Chiseling away at the amount that the utility must contribute to the general fund

The City Charter requires that Anaheim’s utility provide up to 4% of its total revenues to the City during the previous year.  “Up to” means that it can be less, but only if the City Council takes responsibility for the cut.  Kring wanted to reduce this cap from 4% of the gross revenues to 4% of the net revenues — net of everything except  “operating revenue” — necessarily a lower number.  So she wants Anaheim’s utility to have lower reserves and to quietly be able to give less money to the City!  Why?

Did you realize that THIS was what she meant by “reaffirm and authorize the transfer of money to the City’s general fund to support City services”?  Did you know that “reaffirm and authorize” meant cutting the amount of money that the General Fund would receive?

Change 3: Detaches amount of rates from cost to provide utility services

Currently, different “classes” of customers pay the same rates (except for special discount programs for some residential customers.)  But all utility customers in the same “class” pay the same rates, and those rates are based upon the actual costs of providing services to them.  Kring’s Measure N would have removed this requirement from the City Charter.  The ballot argument applies that it is redundant with a requirement of the California Constitution — but then why eliminate it?  It would only make a difference if there were a drive to remove the requirement from the state constitution, or if there are court decisions circumventing the Constitutional requirement in some cases.  (Strangely enough, it does happen.)

Did you realize that this crucial extra layer of protection against being gouged on utility rates was what what Kring considered to be merely “redundant”?

Change 4: Allow special rate concessions to businesses for unspecified reasons, not solely to distressed residents

Currently, the City Council can create ratepayer discount and other programs designed to assist residents who have trouble paying their utility bills.  That’s a nice thing for the city to do for its residents, especially in hard times (at least for the working and middle classes) like ours.  And it’s not like politicians or staff members are so willing to put themselves in the vulnerable position of bending the rules to give breaks on rates to undeserving residents.  But non-residential users such as businesses?  They DO have the money to push financial breaks and benefits for themselves through the City Council!  Does anyone really imagine that Disney — the Angels, the Ducks, Hardin Automotive, or plenty of other businesses wouldn’t push the Council for a lower utility bill if they could?  Measure N would have left only one barrier to keep them from doing so: the City Council’s own (cough!) integrity.

Did you realize that, when the ballot statement said Measure N would “authorize programs to benefit residential and non-residential customers,” residential customers were already eligible for benefits if they couldn’t pay bills (so those programs didn’t need to be newly “authorized”) while non-residential customers were being newly authorized for what could have been new classes of larger, and less justifiable, breaks on their utility bills?  You probably didn’t right?

Was all this Kring’s own cunning plan — or did some outside interest plan it and put her up to it?

Now let’s be fair: this is well enough and subtly enough drafted that Lucille Kring did not likely come up with the language (or even the underlying ideas) on her own.  So she was probably carrying water for some interests wealthy enough to hire a team of sharp lawyers who were getting paid to do what I’m trying to undo for free.  (And if Kring is re-elected, they’ll probably do it again  in 2018 and/or 2020.  After all, that was one close vote!)

So, for those people who think that it’s better if Kring was duped (or, um, “enticed”) into trying to rip-off consumers, rather than coming up with the scheme by herself, you have a good question to ask Kring this year: WHO PUT YOU UP TO SPONSORING MEASURE N?”

Conclusion: Does all of this add up?

Meanwhile, let’s total up the score: Kring’s narrowly defeated Measure N would have meant less money set aside for debt service, less money likely to be paid to Anaheim’s General Fund, less protection against arbitrary rate hikes, and no greater protection for residents who were having trouble paying their bills.  So what was going to happen to all that extra money that wasn’t going to be saved, wasn’t going to be given to the City, wasn’t going to be used to hold down rates, and wasn’t going to expand forbearance programs for struggling residents?

Well, what’s left in what Measure N would have done?  Oh, there it is.  It would have taken away money from the city and from residents to give it to big business.  And Lucille Kring probably got some nice far contributions on the basis of her playing along with business interests and carrying their water here.  When you see those glossy mailers promoting Kring’s re-election, remember that some of the money paying for them probably came from interests that were using her as their vehicle to push through Measure N while everyone’s attention was distracted on Measures L & M.  You have to keep a really close eye on this one, hmmm?

Lucille Kring: You can’t trust her, so don’t re-elect her.

This is your Weekend Open Thread.  Talk about that, or anything else you’d like, within reasonable bounds of discretion and decorum.

About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)