2014

DWP, City of Los Angeles Named in Class Action Lawsuit Mayor Hahn, City Council Members Also Sued Over Transfer of DWP Funds to City

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Over $800,000,000 in 'Surplus Funds' Sent to City in Past Four Years



    LOS ANGELES, Sept. 30 /PRNewswire/ -- Five Department of Water and Power
 customers have filed a class action lawsuit against DWP, the City of Los
 Angeles, Mayor James Hahn and City Council members from the year 2000 to the
 present.  The lawsuit demands that DWP and The City of Los Angeles stop
 transferring hundreds of millions of so-called "surplus" dollars from DWP's
 Water Revenue Fund and Power Revenue Fund into the City's Reserve Fund, while
 DWP is in serious debt.  Since the beginning of fiscal year 2000-2001, more
 than $800 million in DWP funds have been transferred to city bank accounts.
 DWP is currently $1 billion in debt and over the past four years has been in
 as much debt as $4 billion.
     The plaintiffs in the case are all DWP ratepayers; Frank Jacobs, Harry M.
 Nakada, Robert Wynn, Anna M. Kinzle and Soledad Alatorre.  The class includes
 all Los Angeles residents who paid DWP for water and power service between
 January 1, 2000 and the present.
     Attorney for the plaintiffs, Stephen Garcia said, "These are DWP customers
 who paid their utility bills in good faith, only to find they've been
 subsidizing the City of Los Angeles with a secret and inappropriate tax."
     The class-action lawsuit claims that transferring so-called "surplus
 money" to the City's Reserve Fund is an unlawful practice that violates the
 Los Angeles City Charter and other codes, statutes, ordinances, regulations
 and policies.  The suit demands that the City of Los Angeles and the
 Department of Water and Power be prohibited from illegally transferring money
 from DWP's Water Revenue Fund and the Power Revenue Fund -- into the Reserve
 Fund of the City of Los Angeles.  It also demands that the City and DWP be
 prevented from spending any of the more than $800 million that have been
 transferred from DWP to the City's bank account, that the money be returned to
 DWP's Water and Power Revenue Funds and then refunded to DWP customers who
 paid for Water and Power Services from 2000 to the present.
     The lawsuit also says a recent 11% rate increase is unnecessary and
 unlawful, and should be rolled back.  The lawsuit demands that DWP not spend
 any of that additional money -- and that DWP refund that rate increase money
 to customers.  That rate increase, which went into effect in June, is expected
 to generate an additional $60-million a year in revenue.  Coincidentally on
 June 25, 2004, the City Council adopted an Ordinance which transferred
 $60 million from the Power Revenue Fund of the Department of Water and Power
 to the Reserve Fund of the City of Los Angeles.
 
 

SOURCE The Law Offices of Stephen M. Garcia

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