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