A Sherman Oaks apartment building owner and an apartment owners association have filed a lawsuit against the City of Los Angeles seeking to block a waste-hauling franchise system set to go into effect next month.

The lawsuit filed by the Apartment Owners Association of California and Chuck Betz, who owns a 10-unit apartment building in Sherman Oaks, alleges that trash-hauling fee increases set out in waste-hauling franchise contracts violate California’s Proposition 218, a state law that requires voter approval for new taxes.

The lawsuit makes two arguments: that the fee increases are actually taxes that need to be put to a vote of the people under Proposition 218, and that the fee increases do not apply equally to all residents and business establishments.

“While appearing to benefit all city residents, (the program) actually illegally and dramatically increases for waste hauling on commercial property owners and certain multifamily property owners, not all citizens or property owners equally,” the lawsuit states.

The lawsuit seeks an immediate injunction to block implementation of the franchise system and to have the city rework the program so it complies with Proposition 218.

A spokesman for City Attorney Mike Feuer said his office was reviewing the lawsuit but would not comment at this time.

The trash-hauling franchise system was enacted three years ago following an intense lobbying effort by the union-allied Los Angeles Alliance for a New Economy, or LAANE, which touted it as a way to reduce garbage truck trips and establish recycling standards for commercial and multifamily properties. The city awarded contracts last year to seven haulers to provide exclusive service to the city’s 11 newly drawn-up franchise zones.

In response to the lawsuit, a LAANE official defended the waste-hauling franchise program.

“We’re concerned that this is nothing more than a delay tactic,” said Robert Nothoff, director of LAANE’s Don’t Waste L.A. initiative. “We don’t understand why the apartment association would want to deny Angelenos a cleaner environment, better air quality, reduced traffic congestion, fair and transparent rates, and good, safe, living-wage jobs.”

Public policy and energy reporter Howard Fine can be reached at hfine@labusinessjournal.com. Follow him on Twitter @howardafine.

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