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Exclusive: Fresno spends $232,000 in taxpayer funds on water rate lawsuits

By on May 21, 2014
lawsuit

Nearly a quarter million dollars in taxpayer funds has been spent by the City of Fresno in its ongoing lawsuits to keep a water rate referendum off the ballot, a CalNewsroom.com investigation has revealed.

As of May 6, the city has spent $232,254.28 to sue a group of taxpayers that are trying to overturn controversial water rate hikes approved by the city council last year. The figure was obtained through a public records request filed by CalNewsroom.com for all city funds expended to date in Doug Vagim v. City of Fresno and City of Fresno v. Doug Vagim.

Opponents of the water rate increases, who were sued by the city, said that the city’s actions have been “a reckless waste of public funds.”

“Challenging the constitutional rights of the citizen-electorate of Fresno has proven to be a reckless waste of public funds,” said former Fresno County Supervisor Doug Vagim, who is leading the water rate referendum. “When you add our legal fees, the cost to city taxpayers will now be over a third of a million dollars.”

A spokesman for the city did not respond to a request for comment about the litigation costs, which have already increased since the public records request was submitted.

On May 6, the date of the public records request, the city filed a petition for writ of mandate in the 5th District Court of Appeals that sought to set aside a previous trial court order. This week, the appeals court dismissed that petition without prejudice. If the city chooses to pursue another writ of mandate, it would add to the city’s litigation costs.

City denied petition, then sued taxpayers

The battle over Fresno’s water rates began last August, when the city approved a plan supported by Mayor Ashley Swearengin to increase the average water bill to $48 per month. The city says that the additional revenue is needed for a $410 million upgrade to the city’s aging water system. But, some residents of the city and unincorporated parts of Fresno County balked at the prospect of higher water bills, which are expected to double by 2016.

Ashley-Swearengin

Fresno Mayor Ashley Swearengin

When taxpayers attempted to circulate a petition to overturn the plan, the City of Fresno denied the taxpayers a title and summary for their referendum. Then, the city sued the taxpayers to prevent their initiative from entering circulation. The move appeared to be a direct violation of the California Constitution. Section 3 of Article 13C states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.”

Even supporters of the water rate hikes have grown disgusted with the city’s hard-ball tactics.

“We support the water-rate increases; they are vital to the city’s future,” the Fresno Bee editorialized last November. “But with these stalling and blocking tactics, Swearengin sends a message that she doesn’t trust Fresno voters to do what’s best for the city.”

The city says that the lawsuits were necessary in order to fulfill its obligation to deliver an essential public service to residents.

“State law is very clear that a ballot initiative is illegal if it deprives a public entity of the ability to supply an essential public service,” City Attorney Doug Sloan said in a statement to CalNewsroom.com earlier this month.

11 judges disagee with city

Yet, 11 judges have disagreed with the city’s arguments in the case. Most recently, the California Supreme Court denied the city’s petition for review of a 5th District Court of Appeals ruling, which held that the city has a legal obligation to issue a petition title and summary.

“The result is disappointing, but asking for a Supreme Court review is always a long shot,” Sloan said of the city’s loss at the state Supreme Court. “The real question that needs to be answered concerns the legality of this initiative, and we are now seeking that answer from the appellate Courts. The citizens of Fresno and public entities throughout the State deserve an answer to that question.”

The potential for further reviews and more litigation disappoints Vagim, who wishes city officials would allow the measure to reach the November 2014 ballot.

“I don’t know if they’ll pursue further reviews and even new lawsuits,” he said. “If they do, it illustrates just how irresponsible the City Council majority, Mayor and City Attorney have been — their protracted acts of hubris are an insult to the citizens of Fresno.””

For years, local government agencies have routinely cited attorney-client privilege as a basis for withholding the cost of ongoing litigation. In 2013, the California Supreme Court ruled that legal fees can be disclosed “when a public records request is made during active litigation.”

City of Fresno Water Rate Referendum: Litigation Costs

Fresno Spends $232,000 on water rate lawsuits

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About John Hrabe

John Hrabe spends his time traveling the world as a freelance journalist. When he isn’t on an international flight, John writes about state and national politics for CalWatchdog.com, FlashReport.org, Huffington Post and the editorial pages of the Orange County Register. John’s most recent high-profile investigation uncovered the questionable labor practices of Goodwill Industries, the nonprofit organization famous for its secondhand clothing stores.