Eureka City Council mulls excessive electricity use tax; PG&E estimates $485K cost for implementation

The Eureka City Council on Tuesday directed staff to collect more data before making a decision on whether to place an excess electricity use tax on a future ballot.

"I'd like to be able to make an intelligent decision by looking at a few more pieces of information," Councilman Mike Newman said.

Newman said he would like more data on usage, projections about what might happen in the future and whether households that exceeded the baseline in Arcata after the passage of Measure I, which assesses a 45 percent tax on residences over the 600 percent baseline, moved into other areas of the county.

"That's part of why we're looking at this -- it is not to raise revenue, but it is to get rid of grow houses and such," Newman said.

Eureka police Chief Andrew Mills said there have been 14 cases of large amounts of marijuana seized within city limits this year.

"It is a substantial problem, and it is something we should certainly take a look at," Mills said.

After surveying the city's meters, Pacific Gas and Electric Co. determined 393 meters exceeded the 600 percent of baseline threshold -- or three times more than the average household -- for at least one month. The city would have yielded $932,300 in revenue if a tax similar to Measure I in Arcata was in effect in 2013.

PG&E officials estimate it would cost Eureka $485,000 to implement a similar tax, but if the tax were to be executed at the same time as another jurisdiction, it could cost less.

The Humboldt County Board of Supervisors last month directed staff and a board subcommittee consisting of 1st District Supervisor and Board Chairman Rex Bohn and 5th District Supervisor Ryan Sundberg to begin working on a tax for unincorporated areas of the county with the goal of placing a measure on the 2016 general election ballot. According to county staff, approximately 3,000 homes would have qualified for the tax over the last three years, generating $8 million in revenue.

If the county saw a 65 percent decrease in the number of customers exceeding the baseline as Arcata did once the tax was implemented, that figure would have dropped to $300,000.

In other business, Mayor Frank Jager pulled an item to authorize staff to negotiate a contract with Wahlund Construction for work on the Martin Slough Force Main project from the agenda at the beginning of the meeting.

"We had some complaints from other contractors out to bid on the project," Jager said. "They wanted a chance to take a look at it."

Lorna Rodriguez can be reached at 441-0506 or Follow her on Twitter @LornaARodriguez.