Legal News

Department of Water may have to use city budget money for customer refunds

By Richard Binder

A Superior Court judge has issued a tentative ruling ordering the Los Angeles Department of Water and Power to repay its customers nearly $30 million that city officials had hoped to spend on other services.

The ruling said the Department's long-standing practice of moving money from its water fund into the city's general fund -- which pays for such services as police, fire protection, street maintenance and libraries -- violates provisions of the anti-tax measure Proposition 218.

If upheld, the decision would represent a major victory for the Howard Jarvis Taxpayers Association, which said the state Constitution bars municipal utilities from overcharging ratepayers for water and then using the surplus to pay for other city programs.

"They can only charge those customers for the commodity that they're selling to them," said Tim Bittle, the group's lawyer.

The city has until Thursday to respond to the proposed decision.

Full story at LAT.com.

Full post as published by Legal Pad | LA on April 03, 2009 (boomark / email).