City to Appeal Property-Tax Case Ruling

The Huntington Beach City Council has voted to appeal a court ruling that found the city had collected property taxes in violation of Proposition 13.

The 7-0 council vote Monday means the city will now engage in a potentially lengthy and costly battle in the Fourth Court of Appeals in Santa Ana with the Howard Jarvis Taxpayers Assn., which successfully sued the city over the issue in March.

City officials have directed city departments to cut their budgets by 5% in case the ruling is upheld and the city is forced to refund approximately $25 million to property owners from tax years going back to 1997.

The Jarvis group had filed a lawsuit in Orange County Superior Court charging that the city collected property taxes in excess of the 1% limit allowed under Proposition 13. The proposition allows for exceptions to that limit to pay for city debts approved by the voters prior to Proposition 13’s passage in 1978. Huntington Beach had been using the excess to pay for the city’s retirement fund.

The group, however, argued that the excess taxes were not being used for the programs that the city had specified, and the court agreed.

Jon Coupal, president of the group, said the city’s decision to appeal is “troublesome.”

“The city, by its appeal, is going to protract this dispute, which is not only going to be costly, but engender a lack of credibility with the citizens,” Coupal said.

Huntington Beach officials also passed a resolution Monday that they say ensures anyone who files a claim up to 90 days after the final disposition of the case will be reimbursed.