L.A. gets to keep $69 million taken from port over 2 years.

The City of L.A. would get to keep the $69 million it took from Port of L.A. coffers in the past two years as part of a lawsuit settlement that goes before an L.A. County Superior Court judge for approval this week.

The settlement results from a suit filed by Raymond Veltman, a retired trucking company owner, against several California cities and ports. Veltman's suit alleged the City of L.A. and other cities throughout the state illegally transferred port funds into city treasuries.

The ports' reserves are part of the state's Tidelands Trust, which is composed of money reserved for commerce, navigation, recreation and fisheries, the suit noted. But in 1992 the state Legislature passed a measure which allowed the cities to take money from port funds during 1993 and 1994 to recoup property tax revenue they were losing as a result of budget changes. The law expired Dec. 31, 1994.

Veltman, whose trucking company did business with several ports throughout the state, is concerned about money being siphoned from them, according to his attorney Richard Fine, principal in the Century City-based law firm Richard I. Fine & Associates.

The ports are included as defendants because they complied with the law by giving the money to the cities, Fine said.

The defendants in the suit are the cities of L.A., Long Beach, San Francisco, Oakland and their respective ports, along with the Port of San Diego and the five smaller cities surrounding it. The City of Long Beach took $22 million from its coffers during 1993 and 1994.

The settlement involving the City of L.A. and the Port of L.A. basically allows the city to keep the money. However, the city agrees to contribute $3 million to the port over the next 10 years to "protect and develop navigation, fisheries and harbor-related commerce," according to the proposed settlement.

"We certainly think this is a fair and reasonable settlement. It protects the interests of both sides and avoids expensive and protracted litigation," said Winston Tyler, senior assistant city attorney for the City of L.A. Officials at the Port of L.A. declined to comment.

Fine said the settlement could dissuade the Legislature from passing another bill to take away port funds in the future. Because of a statute of limitations loophole, the cities could potentially have tried this year or next to take money that existed in the ports on the date the law expired, he said.

But the pending L.A. settlement, as well as the San Diego, San Francisco and Oakland settlements, all state that the cities agree not to take any more money from the ports under the state measure, he noted.

The part of the suit filed against the City of Long Beach and Port of Long Beach has not yet been settled. Long Beach Assistant City Attorney Robert Shannon declined to comment.