By Brian CHERNICK

A hearing is scheduled next Wednesday in Los Angeles Superior Court with the City of Glendale to discuss a recent judgment against the city in the amount of $58 million.

The city was ordered to pay back utility users after a judge found the city had violated Proposition 26 when it inappropriately transferred funds from Glendale Water & Power to its General Fund. The hearing will discuss details as to how the city will facilitate the repayment and will allow the city to make an argument for a stay on the ruling during the appeal process.

L.A. Superior Court Judge James Chalfant ruled in June that the city had violated its own charter by transferring the funds.

“The transfer cannot fairly be described as cost of providing electric service,” Chalfant wrote at the time. “Any contrary conclusion would defeat the purpose of Prop 26 by permitting a city to drain monies from its public utility as an alleged cost and then impose that cost on the utility’s customers without a vote from the electorate.”

Proposition 26, passed in 2010, instituted a required two-thirds approval by voters for any utility rate increase that would go toward anything that is not related to the utility or maintenance of the utility services. Over the past five years Glendale has transferred $85 million from the water and power fund. The last transfer in June, of $20.1 million, accounted for nearly 11% of the city’s budgeted revenue.

In 2013, the Glendale City Council voted to raise electricity rates, prompting allegations that the rate hike was being used as a form of taxation since those increased rates would potentially be used for general purposes.

The Glendale Coalition for Better Government filed suit in 2014 for “the approximately $90 million in misappropriated funds,” according to the Coalition’s legal representative Arthur Cohen.

A clause in a recently approved Memorandum of Understanding, which included an agreement for salary increases over three years for Glendale police, stipulates that the agreement would be nullified should the city lose the ability to transfer money from the electric fund.

Glendale City Attorney Mike Garcia said he is confident that the judge will allow a stay on the ruling and that the appeal will be successful. Garcia has stated in the past that the transfer of funds was “grandfathered in” before the passing of Prop 26, allowing them to maintain it.

The appeal process is expected to take nearly two years.