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HAWTHORNE : Trash Pickup Claim Says City Overcharged

October 20, 1994|JON GARCIA

A longtime city resident and a local businessman have filed a claim against the city, saying officials have overcharged residents and businesses for trash collection.

Resident Francis Stiglich and pool hall owner Jerry Jamgotchian filed the claim Oct. 10.

City officials say refuse charges are added to residents' property tax bills, and businesses are charged directly. After deducting a 25% franchise fee, officials said, the money is forwarded to H & C Disposal Co., the city's trash hauler. Each year, the fees are increased according to the cost-of-living index.

According to the claim, the city has miscalculated the cost-of-living increase and has overcharged customers by 37%. In addition, the claim alleges that the city has imposed a 33% franchise fee that adds more than $2 million to city coffers.

Stiglich and Jamgotchian say the franchise fee is a hidden tax and violates California's anti-tax Proposition 13 passed in 1978.

City officials declined to comment on the claim.

Although franchise fees are generally paid to cities by businesses that hold city contracts, Stiglich and Jamgotchian say H & C Disposal has not paid any fee and that the cost, instead, is being added to customers' bills. Because the money collected is placed in the general fund, the claim alleges, the fee is actually a tax.

Stiglich is asking for a $500 refund for overcharges dating to 1988. If the city agrees to refund the money, Jamgotchian said, it would have to give a refund to all residents and business owners. The cost to the city, he said, could be millions of dollars.

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