Krause Kalfayan Benink & Slavens, LLP Announces Settlement of Proposition 218 Lawsuit With City of Long Beach
LONG BEACH, Calif., Nov. 9, 2017 /PRNewswire/ -- On November 8, 2017, Diana Lejins, a 32-year resident of the City of Long Beach entered into a settlement of a lawsuit she filed against the City of Long Beach in September 2016. Ms. Lejins, a civic activist, claimed that the City's Water Department has been illegally charging its water and sewer customers "Pipeline Permit Fees." The Pipeline Permit Fees, totaling approximately $11 million per year, serve no legitimate purpose and were blatantly designed to bolster general fund revenues on the backs of ratepayers. Proposition 218, passed by People of the State of California in 1996 and enshrined in our State Constitution, prohibits local governments from charging more than it costs to provide utility service and from using utility fees for non-utility purposes.
The settlement requires the City to stop charging the Pipeline Permit Fees when it adopts rates in the future. The City must reduce its water and sewer rates to eliminate the Pipeline Permit Fees from the current rate structure within 60 days. The City will also restore $12 million in previously-transferred Pipeline Permit Fees from the City's general fund to its Water Department over the next four fiscal years.
After the lawsuit was filed, the City commissioned cost-of service studies to ascertain the amount of right-of-way and public safety costs that the general fund pays on behalf of the Water Department. The settlement allows the City to transfer some of the costs identified in the studies, but they are less than half the Pipeline Permit Fees that the City has agreed to eliminate. Utility ratepayers will save millions of dollars in the future as a direct result of the lawsuit.
Ms. Lejins stated, "The Pipeline Permit Fees were bogus from the start. Hard-working citizens don't appreciate it when their government plays games. Hopefully, this lawsuit serves as a warning to those 'money-is-no-object' politicians who so fervently attempt to extract and spend every last dime they can from hard-working taxpayers. This victory transcends the exploitation, validates the people's vigilance and is truly OF the people, BY the people and FOR the people."
Ms. Lejins' attorney Gerrie Schipke said, "This settlement is not only a tremendous win for the water and sewer customers in the City of Long Beach but also for the voters of California who approved Proposition 218, requiring voter and taxpayer control over local fees and taxes. The law is clear: cities, like Long Beach, cannot assess fees merely because they want to raise revenue."
Ms. Lejins was also represented by Eric J. Benink, Esq. of Krause Kalfayan Benink & Slavens, LLP, a San Diego law firm with substantial expertise in Proposition 218 matters.
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