Additional Refunds Sought for Disputed Utility Tax

Since imposing a 4% utility tax on residents in 1994, the city has faced opposition.

The tax was finally repealed in a 1996 special election, and last year the city issued some refunds. Now Agoura Hills faces a Superior Court lawsuit seeking $2.2 million in additional tax refunds, filed on behalf of 163 plaintiffs.

Part of the dispute hinges on the interpretation of two court rulings after the tax was imposed. City Atty. Amanda Susskind said Agoura Hills complied with a 1995 state Supreme Court decision that required voter approval of new taxes. After that ruling, the city put the utility tax on the 1996 ballot and offered refunds for taxes collected after the court decision.

“There couldn’t be a city that did more to comply with this,” Susskind said.

But Citizens Against New Local Taxes, a local group that filed the lawsuit on Sept. 24, argues the tax was illegal from the start because it had not been approved by voters, said Barbara Murphy, the group’s chairwoman.

Murphy cites a 1997 appellate court decision that, she said, indicates the state Supreme Court ruling also applies to taxes imposed before 1995. Her group wants the city to offer to refund every dollar collected under the utility tax between June 1994 and July 1996.

Murphy said that when the city offered about $1.1 million in refunds last year, only about $360,000 was actually claimed by residents.