Commissioners Okay Settlement of Class Action, Seek Court Approval

Fruitland Park January 22, 2014 — City commissioners voted 5-0 last night to approve the terms of a settlement to resolve a class action lawsuit to overturn the city’s controversial utility services fees—a voluntary $8 per month charge on city utility bills commissioners enacted in 2009 to help bolster police and fire department budgets.

At 6:30 p.m., the city’s governing board convened a so-called “Shade” meeting—closed to the public—to discuss settlement plans privately with the city’s attorneys before convening the public commission meeting. Shade meetings are permitted under Florida’s Sunshine laws when elected officials need to discuss pending litigation with attorneys.

Lake County Judge Michael Tacac will have to approve any settlement before it becomes official. A hearing is tentatively scheduled for March 5.

If approved, the city will establish a $530,000 settlement fund and a mechanism to refund utility services fees paid by city residents since 2009.

City attorney Scott Gerken explained that the court will first determine how much of the settlement fund to award in legal fees and administrative costs, then determine an amount to award two-time commission candidate Michael Howard and his wife, whom Judge Tacac appointed as class representatives last year.

Former Commissioner Jim Richardson, who initially filed the suit, was disqualified as class representative. An earlier settlement offer proposed by attorneys for the plaintiffs called for a $15,000 payment to the class representatives. Judge Takac may set a different amount on March 5.

After those amounts are allocated, monies remaining in the settlement fund will be returned to utility customers who have paid the fees in the past. Only city residents will qualify for refunds. Utility services fees were not charged to utility customers outside the city limits.

Eligible utility customers must apply to the city for their refunds. Refunds will be made on an individual pro-rated basis—customers who paid the most will receive the biggest refund checks.

The city will establish the mechanism for applying for refunds after the court approves the settlement.

Any monies that remain in the fund after utility customers are paid will be returned to the city’s general revenue fund.

Commissioners enacted the utility services fees five years ago to offset budgetary shortfalls brought on by the recession, the housing market collapse and reduced property values. From the start, the city has collected approximately $560,000 from the fees—about $100,000 annually.

The police department’s annual budget is approximately $1.1 million.

Richardson filed the lawsuit in federal court in February, 2013 leveling two sets of allegations—that the utility services fees were illegal and that commissioners and city staffers unfairly opposed his reelection campaign in November, 2012.

Last year the federal judge split that complaint into two separate actions and sent the utility service fee issue to Lake County court for disposition.

The city settled its federal court suit last year for $150,000.


One Response to Commissioners Okay Settlement of Class Action, Seek Court Approval

  1. Sue Conner Reply

    October 1, 2014 at 6:43 pm

    October 1, 2014

    I received a check today for less than one half the amount that I actually paid for these taxes.
    Do you know what amount we are supposed to be
    refunded? It does not seem like enough of a refund.

    Sue Conner

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