Pasadena Prevails in Lawsuit that Challenged Voter-Approved Transfer of Electric Rate Revenues

A Los Angeles County Superior Court judge threw out a class-action lawsuit that challenged the $18 million annual transfer from the city of Pasadena’s power fund to the city’s general fund.

The lawsuit was filed in 2017 and claimed the use of electric rates to fund the transfer to the General Fund violated the state’s constitution and is a non-voter approved tax.

“I am pleased that justice prevailed,” said Pasadena Mayor Victor Gordo. “The transfer continues to be approved by Pasadena residents, and for good reason. Pasadena has proven that our residents have confidence in receiving high-quality essential services and that residents want to ensure that our general fund and tax dollars are protected from class-action lawsuits.”

Pasadena voters established and confirmed City Charter provisions allowing the general fund transfer a total of seven times, dating back to 1934. In November, voters passed Measure P, which maintained the annual transfer.

The general fund is the city’s primary operating fund, providing a number of essential services to Pasadena residents and businesses.

Almost 84 percent of Pasadena voters approved Measure P, confirming that voters approve of having a portion of their electric rates fund the $18 million annual transfer to the general fund.

With voter approval of Measure P, and a January 29 published (precedential) appellate decision approving of Sacramento’s utility fund transfer, Pasadena sought reconsideration in its case.

Rather, the court decision Wednesday recognized that Measure P and the court decision on Sacramento’s transfer both require “new and different orders granting [Pasadena’s] motion for summary judgment.”