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Ron Kaye: The trouble with Harry

August 26, 2012

Let's have a big round of applause for retired law professor Harry Zavos.

Citing the state Constitution and a lawsuit won by the Howard Jarvis Taxpayers Assn. against the Los Angeles Department of Water and Power, he got Glendale officials three years ago to stop transferring “surplus” water revenue to the city's General Fund.

Score one for Harry.

Then, he began a crusade to end the transfer of what this year is $21 million in electricity revenues to the General Fund — money that is desperately needed to maintain basic city services at a time when Glendale, like nearly every government agency in California, is facing huge budget deficits.

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Doggedly persistent, one-pointed like a pit bull, Zavos pushed city officials to the wall, claiming the transfer amounted to a tax requiring voter approval under the state's Proposition 26 and violated the City Charter's rules for Glendale Water & Power financial operations.

Finally, City Atty. Mike Garcia and Senior Assistant City Atty. Christine Godinez issued a 16-page legal opinion backed by a 40-slide PowerPoint presentation that came before the Glendale Water & Power Commission three weeks ago. It should properly be called the “Zavos Report.”

Score two for Harry.

The opinion amounted to a detailed refutation of most of the retired lawyer's assertions with one clear exception: The transfer needs to be made in a single payment at the end of the fiscal year and not in monthly installments, as the practice has been.

Score two-and-a-half for Harry.

Prop. 26 doesn't apply because the transfer was grandfathered in, according to the city's lawyers, who dispute Zavos' reading of the City Charter on whether transfers come from “gross revenue” or “net revenue” after all costs are accounted for.

Still, a majority of Glendale Water & Power commissioners took the point Zavos was making seriously enough to raise questions about the practice in terms of the impact the transfer of up to 25% of electricity revenue has on the utility's solvency, and on rates to consumers.

“Starting the conversation about moving forward, we really need to be very judicious about how much we transfer, where the first priority needs to be maintaining the integrity of the system so we're not depleting it,” commission President Zanku Armenian said at the Aug. 6 meeting.

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