City to appeal court’s tax decision

Tariq Malik

HUNTINGTON BEACH -- Property owners may have to wait up to three years

before collecting on refunds of a tax deemed illegal by a Santa Ana

judge.

The City Council decided Monday to appeal the decision of Orange

County Superior Court Judge Robert Gallivan, who first stated in a March

ruling that the property tax funding some city employee retirement

benefits violated the 1978 Proposition 13, which capped property taxes at

1% of assessed value.

“I think this will benefit the entire state, win lose or draw,”

Councilwoman Debbie Cook said. “It will provide an opinion for all cities

to rely on in the future, though I hope it won’t take us the three years

expected to get there.”

City officials have argued for the property tax, stating the charter

amendment passed at the same time as Proposition 13 allowed taxes that

met city retirement system obligations, and gave officials the power to

apply the money toward employee pensions.

Assistant City Atty. Scott Field said the appeal could take as long as

three years to make its way through the courts, and an additional two

years should that decision be appealed to the state’s Supreme Court.

The appeal faces much opposition.

Gallivan’s ruling stemmed from a 15-month lawsuit filed against the

city by the Howard Jarvis Taxpayers Assn., on the behalf of resident

Chuck Scheid and the late Charles Davis, who was later dropped from the

case. The two men, then, believed the tax to be illegal and were

demanding refunds.

“The city is wrong on this,” Scheid said of the intent to appeal. “Why

should residents have to wait three years for the city to refund money

that was illegally taken from them?”

The Huntington Beach Taxpayers’ Assn., headed up by former City

Councilman Dave Sullivan, received thousands of calls from residents

seeking information on property tax refunds, many of them angry.

One thing, Sullivan said, that has been positive is the city’s tax

refund claim form, which has been changed to be more user-friendly as a

result of Cook, who brought the matter to the council’s attention earlier

this month.

Although Field stressed that property owners will still be able to

file refund claims up to 90 days after the appellate court decision,

Sullivan said taxpayers shouldn’t rely on “promises written in sand” and

should file now.

If the appellate court ultimately supports Gallivan’s trial ruling,

the city could face a loss of up to $25 million in refunds, dating back

to 1997, and lose $7 million in annual revenue.

Jon Coupal, president of the Jarvis association, said Gallivan’s

decision was “ironclad.”

“I just don’t see how the city hopes to prevail in this,” he added.

“I’d think they’d be better off finding out how they can get the money

back to the taxpayers.”

FYI

For more information on the property tax case, or to find a form from

the city, visit the City Clerk’s office on the second floor of City Hall,

2000 Main St. Copies of the city’s presentation on the subject are

available. Forms and information can also be found on the city’s Web site

at o7 https://www.ci.huntington-beach.ca.usf7 and are available through

fax via the Huntington Beach Infoline (714) 374-4800. Enter Message # 577

for a fax of the claim form, and Message #577 for a copy of the city’s

presentation.