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Burbank sued over funds transfers

Plaintiff claims moving utility funds has illegally increased water rates.

October 16, 2013|By Alene Tchekmedyian, alene.tchekmedyian@latimes.com

A Burbank resident has filed a lawsuit against the city claiming that Burbank's long-running practice of transferring funds from the city's utility to its General Fund is illegal. The suit calls upon the court to order the city to quash the practice, records show.

In a petition for writ of mandate filed in Los Angeles County Superior Court, Christopher Spencer argued that the city's practice of transferring utility funds to the city's General Fund, which pays for most public services, has illegally hiked up water rates to the point where they “exceed the reasonable costs” of providing the service.

Spencer argued that the fund transfers violate Proposition 218, which states that property-related service fees can't exceed the cost of the service.

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“As a direct consequence of these yearly transfers of funds from the Enterprise Fund, Burbank has been required to impose on its water customers higher charges and fees than it would otherwise have been required to impose had the transfers not been made,” Spencer argued, according to court records.

On a monthly basis, the utility transfers a percentage of the electric and water sales to the General Fund. Voters authorized the transfer program in a 1958 charter amendment, according to the utility's website.

In the lawsuit, Spencer refers only to transfers from the water fund, which he claimed amounted to nearly $3.4 million of water revenues over the last three fiscal years, and are not earmarked for any specific purpose.

Burbank City Atty. Amy Albano said the city is evaluating the lawsuit.

In his petition, Spencer asked the court to order the city to stop making the transfers and to restore to the utility all funds he claimed were transferred illegally.

A hearing on the case is scheduled to take place in February, records show.

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Follow Alene Tchekmedyian on Google+ and on Twitter: @atchek.

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