City Reaches Settlement on Sewage-Treatment Overcharges
Monday, November 20, 2006
On Monday, San Diego Mayor Jerry Sanders announced a tentative settlement over a class action lawsuit accusing the city of overcharging residential ratepayers for sewage treatment. The city is proposing to pay $40 million for the overcharges. Full Focus reporter Rebecca Tolin has more.
Mayor Jerry Sanders and City Attorney Mike Aguirre say residential ratepayers have been shouldering an unfair burden when it comes to wastewater treatment.
Essentially, single-families and some small businesses were overcharged almost $19 million a year over a 10-year period. Although charges are supposed to be allocated based on usage of the sewage system, residents were subsidizing commercial and industrial users discharging organic pollutants. Consumer advocate Michael Shames spearheaded a class action lawsuit two years ago highlighting the unfair billing practice. At a press conference today, the mayor announced a proposed settlement. Customers who overpaid would receive almost $40 million in refunds, just a fraction of the overcharges. But Mayor Sanders and Mike Aguirre say this sets a new precedent.
Michael Aguirre: In some generations, much is given and some generations, much is asked and this generation of San Diegans much is asked and is being asked in order to correct the past problems that we've had within wastewater and other areas of the city.
Jerry Sanders: The city must do a better job of maintaining the integrity of ratepayer funds. This settlement will help us do just that. The imbalance that led Mr. Shames to sue the city has been corrected. The inequities in billing practices have been addressed. And residential ratepayers are no longer shouldering the burden of supporting an unfair share of the basic cost of maintaining our wastewater system.
The refunds will likely be offset by a larger rate increase in the future. Tomorrow, Mayor Sanders will be announcing proposed increases to pay for much-needed upgrades to the wastewater system. He says there is a critical backlog of projects needed to keep the system operating.
The City Council still has to give its stamp of approval to the tentative settlement, and the Council is scheduled to consider it tomorrow. If approved, existing ratepayers who were overcharged will see credits in their future bills over a four-year period. Those ratepayers who have moved will be able to file a claim form to recoup the refunds. Out of the $40 million rebate, $5 million would go for attorney fees and the additional $35 million would be distributed to the overcharged customers.
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