Electric Bill Refund

x Glendale residents will be receiving a refund / credit to their electric bill.

✔ On January 27th, the Los Angeles Superior Court entered a judgment in two lawsuits challenging the City’s transfer of funds from the utility to the City’s general fund (the “GFT”): Coalition for Better Government v. City of Glendale and Saavedra et al. v. City of Glendale. In both lawsuits, the petitioners contend that the transfer from the electric utility to the general fund (GFT) violates Proposition 26 (an initiative measure passed by the state’s voters in 2010). The petitioners also challenge the City’s fund and accounting procedures, contending they violate the City Charter. The Glendale Coalition also alleges that the water GFT violates Proposition 218.

With respect to the 2013 electric rates, the trial court concluded that although Proposition 26 expressly states it is not retroactive, the City’s imposition of new rates in August of 2013 was a tax because the rate plan included the Charter-required GFT and the court concluded the GFT is not a cost of service. The writ of mandate holds that GWP must credit ratepayers the amount of the GFT since the electric rates increase went into effect in September of 2013. The total credit is $56,950,000 plus interest for FY 2013-14, FY 2014-15, and FY 2015-16. Credits for FY 2017-2018 and subsequent years, if applicable, will accrue at $1,633,916.67 per month until GWP re-designs its rates to exclude GFT or obtains voter approval to include the GFT in the electric rates.

With respect to the City’s accounting practices, the trial court concluded that specified accounting practices, while compliant with Generally Accepted Accounting Principles, violate the City charter. The court enjoined the City from merging some charter mandated funds and splitting up others.

With respect to the water GFT, the court ruled that transfers made from February to June of 2011 (when the water GFT was discontinued) violated Proposition 218. Therefore, the general fund must return $1,733,333.35 to the water revenue fund.

Recently, the City’s motions for new trial of the two GFT lawsuits were denied by the trial court. A motion for a new trial filed by the Glendale Coalition in its GFT case was also denied. The City intends to appeal all three cases. The City maintains that the GFT, adopted by the voters and which pre-dates adoption of Proposition 26, is not thereby vitiated by Proposition 26. It is anticipated that an appeal will take 18-24 months.

The trial court’s rulings in all three cases are stayed pending appeal. This means that while the appeal is pending, the electric rates and water rates may lawfully continue to be collected based upon the current rate plans, and no credits or refunds are to be issued.

For an earlier report on this, go to http://www.latimes.com/socal/glendale-news-press/news/tn-gnp-me-transfer-ruling-20160617-story.html