The letter from attorney Eric Benink (of the San Diego lawfirm of Krause, Kalfayan, Benink & Slavens, addressed to the Water Commission, challenged the sufficiency of the March 7 hearing notice sent to LB property owners alleging it failed to comply with CA Constitution Article XII D, section 6, subdivision (a)(1) with regard to the water fees and charges.

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[Lawfirm Feb. 26 letter] We object on two grounds.

First, to the extent that Resolution WD-1404 continues the practice of embedding surcharges pursuant to Measure M, we believe such action is illegal and unconstitutional for the reasons set forth in the lawsuit entitled Lejins, et. al. v. City of Long Beach, Los Angeles Superior Court Case No. 18STCP02628...

Second, the Notice of Public Hearing (Notice) mailed to property owners does not meet the requirements of California Constitution, article XII D, section 6, subdivision (a)(1) with regard to the water fees and charges. Specifically, the Notice does not provide the basis upon which the proposed fee was calculated. Notably, a November 9, 2018 Finance Committee presentation entitled "Long Range Financial Projections" indicates that, inter alia, labor costs, AMI Debt service, and conservation programs underlie the need for the fee increases. But there is no mention of any of these items in the Notice. Furthermore, the Notice does not identify the proposed fees for residential customers; instead a single "typical" bill is provided. The Notice fails to identify any proposed fee information for commercial, industrial, and irrigation customers.

Based on the foregoing, we respectfully request that the Board decline to recommend that the City approve such rates by ordinance.

LB's Mayor-chosen/Council-approved Water Commission voted on Dec. 20, 2018 to approve a roughly 6% rate increase which was scheduled to become effective April 1, 2019 subject to the outcome of the now cancelled March 7, 2019 protest hearing. Water Dept. staff told the Water Commission in December that the rate increase reflected normal increases from its water supply and capital improvement projects including drilling new wells/building water storage facilities. Under Prop 218, a majority of LB water users can block such a rate increase only if a majority of ALL LB Water Dept. users citywide submit written protests or protest in person at a Prop 218 hearing that had been scheduled for March 7. That March 7 hearing is now cancelled with no new date currently set, although the March 7 deadline for submitting written protests remains.

It's not immediately clear if the water rate increase will take effect April 1, and if it doesn't, what FY19 City Hall budget/spending impacts that might have; LBREPORT.com will update this story as it develops.

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As previously reported by LBREPORT.com, the same legal team now challenging Measure M previously sued and won a settlement ending "pipeline fees" that LB City Hall had previously imposed on LB Water Dept. customers to fund general City Hall spending.

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

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After settling the previous lawsuit by ending the pipeline fees and agreeing to certain consumer rebates, the City, with a unanimous Council voted action, put Measure M on the June 2016 ballot. Proponents of Measure M argued it wasn't a tax and 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 inviting utility rate increases to cover revenue transfers for City Hall spending. Within weeks of voters approving Measure M, LB's Water Commission approved a rate increase (offsetting the settled-lawsuit's rebated sums) that now funding a number of FY19 City Hall spending items.

Developing.

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