The Los Angeles Housing Department on Sept. 5 told the City Council that the city has appealed an appellate court ruling about housing fees to the California Supreme Court and that the matter remains unsettled.

Gary Penny, general manager of the Los Angeles Housing Department, said the city appealed the fees case to the California Supreme Court; the department had prevailed in superior court but lost in an intermediate appellate court. Penny told the council the city had submitted reports estimating the potential repayment exposure at approximately $13 million at the time the department reported last fiscal year.

During the discussion council members asked about setting aside money in a reserve or trust in case the Supreme Court upholds the appellate decision. Penny and other council members said the matter had been discussed with the budget and finance committee and the city attorney; the city has a separate reserve fund and a separate liability account for settlements. A council member asked whether the city should hold money in a special trust pending the Supreme Court decision; the transcript records staff and other council members saying the lawyers believed the city’s chances at the Supreme Court were “quite good” and that friend‑of‑the‑court briefs were being filed by other municipalities.

The council discussed the budget reserves: Penny said the reserve started the year at approximately $60 million but had been drawn down for items such as Democratic National Convention costs; staff said settlements are handled through a separate liability account. The transcript records that the council adopted the item on the agenda concerning the housing program and accepted the oral report.

No final financial obligation was imposed at the meeting; the discussion was a status update and the council did not direct creation of a trust account during the session.