Judgment Made in Prop 26 Case

By Nestor CASTIGLIONE

The City of Glendale was found in violation of Prop 26, according to a judgment handed down last week.

The judgment follows a ruling made in June by Los Angeles Superior Court Judge James Chalfant, which found that Glendale also violated its city charter when it transferred $85 million from its electric revenue fund to the general fund during the fiscal years of 2010-2014.

The lawsuit was filed against the city by the Glendale Coalition for Better Government (GCBC) in 2014. It had requested that the courts force the city to return the full amount transferred. Judge Chalfant ruled partly in their favor, adding that the GCBC failed to “show a nexus between the city’s accounting failures and the city council’s exercise of discretion.”

In a statement issued by City of Glendale spokesperson Tom Lorenz, such transfers have remained unchanged since the implementation of the city charter in 1941.

“[Glendale] does not believe it violates Prop 26, because that measure is not retroactive and specifically allows existing transfers, like the [general fund transfer], to continue so long as their methodology is unchanged,” Lorenz said.

The ruling by the courts disagreed, calling the city’s argument “not persuasive.”

“Nothing in the charter authorizes the city to merge the charter-mandated electric works revenue fund, electric works depreciation fund, and the GWP surplus fund into a single electric fund…” the ruling in part read. “The city’s funding and accounting practices do not comply with its charter.”

Glendale City Atty. Michael J. Garcia stated that the city will likely appeal the ruling, though could not state when the city council would make that decision.

“We believe and are hopeful that we will be successful on the appeal,” he said. “If we are not, we will have to plan accordingly and begin to look at both new sources of revenues and additional cost savings in order to comply with the judgment.”

GCBC spokesperson and board member Roland Kedikian hailed the judgment as “a vindication” of the concerns raised by his organization. He also said it was a rebuke of a practice that the GCBC claims is a “money-making business out of charging [its] own residents for electricity.”

“We are going to continue to defend this lawsuit,” he said. “[The city] did stop those transfers. But it never returned the transferred monies.”

Though the ruling went against the city, Lorenz said that, pending the likely appeal, the trial court’s ruling will be stayed and that the transfer will remain pending the final outcome of the appeal. Current water rates will also continue to remain in effect.