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V OF SAN LEANDRO ""v R1" MEMORANDUM JUN - 4 2001 CIP! OF S'AN l.EANI)n-0 DATE: June 4, 2001 TO: Ed Schilling, Assistant City Manager FROM: Mike White, Acting Finance Director Y,/1 SUBJECT: Proposed Utility User Tax Exemption for Low -Income Residential Ratepayers Staff has identified PG&E's CARE Program as a potential vehicle for providing Utility User Tax (UUT) exemptions to San Leandro's residential utility users. The City currently levies a 6% UUT on charges for services provided by electric, gas, cable TV and telecommunications utilities operating in San Leandro. Staff is proposing to grant a UUT exemption to San Leandro residents who qualify for the CARE Program. PG&E currently provides a 15% monthly discount on gas and electric rates to qualifying low-income households. San Leandro residents must meet the following eligibility requirements to qualify for the CARE Program. These restrictions are based on 175% of the federal poverty level. Household Maximum Size Income 1-2 $21,250 3 $25,000 4 $30,000 5 or More $30,000 plus $5,000 for each resident after the fourth one Estimated Fiscal Impact PG&E recently expanded the CARE Program eligibility requirement from 150% to 175% of the federal poverty level. My fiscal impact estimate is based on the following data provided by PG&E. • Total number of San Leandro households that qualified for CARE in 2000: 2,614 • Average monthly CARE discount for gas: $4.92 • Average monthly CARE discount for electricity: $8.45 Based on the above information, the estimated fiscal impact to the City in terms of foregone UUT revenue at the 150% qualifying level is $168,000 per year. At the 175% qualifying level, I don't expect the City's UUT loss to exceed $200,000. PG&E has indicated that there is no charge for this service and it will take sixty to ninety days to implement the program. 17