The taxpayer-plaintiffs in the legal action are the same individuals who challenged the now-ended-pipeline fees: Long Beach resident Diana Lejins and County of Los Angeles resident Angela Kimball. The plaintiffs' legal team again includes former LB City Councilwoman Gerrie Schipske.

A release by the San Diego-based Krause Kalfayan Benink & Slavens, LLP law firm announced the legal action "in response to Measure M taxes" and challenges the City's adoption of new water and sewer fees on October 1, 2018.

[Lawfirm release text] On October 22, 2018, Long Beach resident Diana Lejins and County of Los Angeles resident Angela Kimball filed a lawsuit against the City of Long Beach in response to the City’s adoption of new water and sewer fees on October 1, 2018. The suit alleges that the water and sewer fees violate Proposition 218 because they embed a surcharge designed to transfer funds from the utilities to the City’s general fund. Proposition 218, passed by People of the State of California in 1996 and enshrined in the California Constitution, prohibits local governments from charging more than it costs to provide utility service and from using utility fees for non-utility purposes.

On June 5, 2018, Long Beach citizens passed Measure M, a "general tax measure," which authorizes the City to include the surcharge in the water and sewer fees. But this local tax measure conflicts with restrictions in the California Constitution. Specifically, section 3 of article XIII D prohibits a local government from imposing general taxes on water and sewer fees. Furthermore, nothing in Proposition 218 suggests that voters can circumvent constitutional restrictions on property-related fees. Because Ms. Kimball resides in an unincorporated area of Long Beach, she was not afforded the opportunity to vote on Measure M.

This lawsuit follows the 2017 settlement of a lawsuit Ms. Lejins filed to challenge the transfers. In the settlement, the City agreed to greatly reduce the amounts of the transfers and to restore $12 million to the utilities. Measure M is the City's attempt to restore the transfers to their prior levels.

Ms. Lejins and Ms. Kimball are represented by Eric J. Benink, Esq. of Krause Kalfayan Benink & Slavens, LLP, a San Diego law firm with substantial expertise in Proposition 218 matters and former City Councilwoman Evelyn "Gerrie" Schipske.

City response invited by LBREPORT.com is pending.

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After ending the pipeline fees and agreeing to certain consumer rebates to settle the taxpayers' previous legal action, the City, with a unanimous Council voted action, put Measure M on the June 2016 ballot, then disseminated materials it described as informational/non-advocacy while a political committee operated by Mayor Garcia mounted a six-figure political campaign for the measure. The political campaign denied Measure M was a tax and said it would basically reinstate a long-standing City practice without which the City would likely have to make major cuts to services including police and fire.

Opponents (lacking a similarly well-resourced campaign) said Measure M is a tax and noted it would no longer rely on transferring surplus utility revenue to City Hall and would instead create a new system in which utility rate increases would cover revenue transfers for City Hall spending. Within weeks of voters approving Measure M, LB's Water Commission approved a rate increase for a FY19 revenue transfer now included as part of the Council-adopted FY19 City budget.

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