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Appellate court orders cities to pay water bills but affirms WRD is required to return overcharges

November 1st, 2013 · No Comments · News

Sean Belk
Staff Writer

A California Appellate Court issued an interim ruling at a hearing on Wednesday, Oct. 30 that orders the cities of Bellflower, Cerritos, Downey and Signal Hill to pay their delinquent water bills.
The cities had withheld the assessments from the Water Replenishment District of Southern California (WRD) for more than two years while the municipalities challenged the legality of the water agency’s assessed fees charged for replenishing groundwater.
The cities so far have won the case filed in 2010 that WRD didn’t follow a state law known as Proposition 218 when it approved raising replenishment-assessment rates, as a judge ruled twice in favor of the cities, but a final judgment on the litigation to determine the amount to which the cities are entitled has yet to be issued.
In what some city officials say is a “split decision,” however, the recent ruling affirms that WRD may be required to return money it had “overcharged” the cities in past years, and the cities may be able to recover “an undetermined amount of the payments” once damages are officially awarded, according to a joint statement from the cities. The court also ruled that the cities aren’t required to pay interest on the amounts withheld to date.
According to a statement from WRD, the cities have collectively withheld more than $16.7 million in water bills over the last two and a half years. Legal counsel for the cities directed them to hold the payment amounts in escrow until a final judgment is made. Attorneys advised that paying the bills would have constituted a “gift of public funds.”
The appellate court, however, cited the “pay first, litigate later” doctrine as the reason for overturning the trial court’s initial ruling that the cities didn’t have to pay the assessment, according to the cities’ statement.
Still, the cities claim that WRD overcharged the southeast Los Angeles County cities by more than $10 million per year to subsidize the coastal communities and oil refineries.
“Despite the court rulings, the WRD has not only failed to adhere to Proposition 218 procedural requirements for levying assessments, it has also taken the position that it is not obligated to return overpayments, a position rejected by the court,” read the cities’ statement. “Instead of following the law, the WRD has instituted a bogus protest mechanism that bypasses the cities’ right to protest the assessments, even though the cities are directly responsible for paying the assessments. “
The WRD, which released a counter statement, called the recent ruling a “victory” for WRD ratepayers, referring to residents who ultimately pay for the assessments through a portion of their water bills.
“This is a huge win for WRD ratepayers and the residents of these cities,” said WRD Board President Robert Katherman. “Residents can rest assured that when they pay their water bills, that money is going to pay for clean, reliable water and for ensuring that the region’s long-term water needs are met.” ß

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