State Orders L.A. Harbor Panel Not to Pay Bill for City Services

State authorities have ordered the Los Angeles Harbor Commission not to pay the city up to $80 million in fees for municipal services.

But Mayor Richard Riordan’s office insisted Tuesday that the city will not refund a $20-million portion of the sum that the harbor panel already has paid, setting the stage for a legal battle with the State Lands Commission, which oversees trust properties, including the Port of Los Angeles.

Harbor officials voted in August to transfer the $80 million to the city for services provided to the port since 1977. Commission members said the money represented their fair share for city services. Under state trust law, money flowing into port coffers can be used only to pay commercial and navigation-related costs.

In a Nov. 3 letter to Riordan and the City Council, the State Lands Commission found that the proposed payments, which cover past and present expenses, run afoul of trust regulations.

“We believe that many of the proposed charges are overly broad and do not constitute proper trust expenditures,” the letter says.

A private analysis of port finances had found that the Harbor Commission owed the city $68 million in old charges and $12 million in current fees for such services as parks construction on harbor property, and police and fire protection.

But the state panel concluded that the study overestimated the amount of back fees due to the city and that proposed future payments would not meet the requirements of the trust law, either because they were unreasonable or would not directly benefit the port.

Port officials declined comment, saying they were reviewing the letter. Riordan aide Steve Sugerman said the mayor has rejected the state panel’s order because he feels the 18-month financial study is sound.