Paradise tables PG&E settlement oversight board

Proposal aimed to mimic Measure V board

PARADISE » The Paradise Town Council on Tuesday night decided to table the idea of creating a Measure V type oversight board to monitor the Pacific Gas and Electric Company’s settlement to the town for the 2018 Camp Fire.

The idea is based on the Measure V committee that has overseen the half- cent sales tax designated for certain town needs — primarily police and fire.

The committee, which has no legislative power, oversees the tax to make sure the town is keeping its promise to voters.

However, Town Manager Kevin Phillips told the council that it’s a little premature to

create such a committee for that purpose because the committee wouldn’t have any parameters by which it operates.

However, that isn’t quite where the town is on Pacific Gas & Electric settlement funds.

The town recently hired a firm, Meter Investments, to invest $50 million of the $225 million in settlement funds the town got.

Investing that money will be done with three basic state rules in play according to Phillips.

“Your three main objectives are liquidity, security and then return — in that order,” he said on Thursday morning. “Those are what you kind of have to guide your abilities out of.”

He said that liquidity allows the town to access that capital when it is needed. Security is about making sure that the investment goes forward and not backward.

Return deals with the amount of money that investment earns.

He added that the money can’t be invested into the stock market and is done in five-year bonds that, when they mature, are returned to the town coffers. The investments the town makes has to be in AAA-rated securities that Phillips said are mostly federal or state municipal bonds.

As that money begins to mature, the district still has $170 million to manage and that money is sitting in the Local Agency Investment Fund.

That fund, which is staterun, he said, is managed much like Meter is doing with the $50 million, except that all of the money is “100 percent liquid.”

Now the town is receiving bids from financial firms to do a long-term financial view of where the town goes after the state’s backfill ends.

That firm will look at the town’s finances over the 20- 30 years and how the PG& E money can keep operations afloat during that time.

“That’s what this longterm plan is going to look at,” Phillips said. “How are those operations looking with no backfill funds, where are the deficits that we are going to be working with.”

He said that it is then that PG& E funds will be used to backfill and will form the basis of the plan for the next 20-30 years.

Town engineer Marc Mattox said that as time moves as the PG&E funds are used, ideally the town will need property tax revenues to increase and become self-sufficient.

But without that financial outlook and plan, it didn’t make much sense to create oversight without any plan for the future.

Phillips said that once that plan is in place and presented to the Town Council, the council could then create an oversight board to make sure the firm’s game plan is being instituted. But Phillips said the council has already had a good handle on the purpose of the settlement funds.

He hopes to have in front of the council by March which fits perfectly with the budget planning process for 2021-22 financial year.

Phillips added that will give them a true look at the actual revenues without the state’s backfill money.