Krause, Kalfayan, Benink & Slavens, LLP Achieves $7.2 Million Settlement of Prop. 218 Action Against City of Pasadena

SAN DIEGO, Sept. 2, 2014 /PRNewswire/ -- A Pasadena water customer, represented by Krause, Kalfayan, Benink & Slavens, LLP, and the City of Pasadena have settled a lawsuit brought against the City in 2013. 

The lawsuit alleged that Pasadena illegally transferred millions of dollars each year from its separate water utility fund to its general fund in violation of Proposition 218.  The suit challenged Pasadena's practice of transferring a fixed six percent of the water utility's operating revenues to the City's general fund to be used for general municipal purpose.  The lawsuit alleged that from 2010 through June 30, 2014, the City illegally transferred approximately $11.9 million. 

Proposition 218 prohibits local governments from taking money collected for water utility service and using it to pay for general government services unrelated to water service.  Water utility fees and other so-called "property related fees" may only be used to cover the cost of providing service to ratepayers.

The settlement requires Pasadena to restore $7.2 million to the water utility fund over five years.  The City also agreed to stop the six percent transfers to the general fund. 

Krause, Kalfayan, Benink & Slavens, LLP is a boutique San Diego law firm that represents citizens, ratepayers and taxpayers in fee-related litigation against municipalities. 

SOURCE Krause, Kalfayan, Benink & Slavens, LLP