A solo practitioner and a lawyer from the San Diego firm Krause Kalfayan Benink & Slavens, LLP entered into a settlement last week against the City of Long Beach on behalf of a civic activist. The action prevents the City’s Water Department from future charges known as “Pipeline Permit Fees.The plaintiff was Diana Lejins, a long-time city resident who argued that the fees, which totaled nearly $11 million annually, did not serve a legitimate purpose and merely bolstered general fund revenues from taxpayers. Proposition 218, passed by People of the State of California in 1996 and enshrined in the 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.”
The plaintiff was represented by solo practitioner Gerrie Schipske, a solo practitioner who is is also councilwoman for the 5th District, and Eric J. Benink, Esq. of Krause Kalfayan Benink & Slavens, LLP.