Water customers may get $100 rebate as part of city lawsuit

Long Beach Water Department ratepayers will get a roughly $100 bill credit as the city begins to transfer back over $30 million in unconstitutional fees that have inflated customers’ bills for decades.

The city’s Water Commission cautioned Thursday that its vote to give customers a one-time credit did not necessarily mean it was the last action by the commission regarding the full $30.8 million the city must transfer back before September. The first transfer of $9 million was initiated last week, according to a city official.

“The use of the term ‘one-time’ does not mean we won’t consider further rate relief,” President Bob Shannon said in reference to the rebate. “We’re just dealing with the amount of money we have in hand at the time, which is $9 million.”

The city had been charging a 12% access fee to the water department to use city-owned pipes and sewer lines and transferred roughly $9 million annually to the general fund as a result of those fees. The practice was added to the city’s charter in 2018 when voters approved Measure M.

However, a lawsuit that was filed shortly after Measure M was adopted was finally settled last week when the California Supreme Court declined to hear the city’s appeal, leaving an appellate court’s decision in place that said the fees were unconstitutional.

A California law known as Prop. 218 made it illegal for utilities to charge more than it costs to provide the service.

A $9 million bill credit applied equally across the approximately 86,500 residential and commercial accounts would equal about $100 per account.

The unanimous vote followed sometimes harsh public comments, in which some residents referred to the board and the city as thieves who had robbed ratepayers of millions.

Several members of the public called for the commission to do more, including returning the full $30.8 million to ratepayers and having the bill credits applied based on how much each account is owed, rather than an equal credit for all customers.

“This is the people’s money, not the water department’s money,” said Angela Kimball, one of the plaintiffs who sued the city over Measure M. “It all needs to be returned.”

The appellate court’s decision in December ruled that the transfer to the city’s general fund was unconstitutional, but the 12% fee that was imposed and passed on to customers will stay in place, Deputy City Attorney Rich Anthony said.

However, instead of getting transferred into the city’s general fund to be used on anything, the funds will go to the water department’s reserves. The revenue could also be used on water infrastructure, which the department could consider as its next fiscal budget is created over the next few months.

The department’s director of finance, Brandon Walker, gave a presentation to the commission before the vote that outlined some of the department’s infrastructure needs and the challenges it’s facing.

Walker noted that like everyone else in the country, inflation is increasing the cost of materials and labor. The city has 2,000 miles of pipe in the ground and 30 storage tanks that sit on a hill above the Traffic Circle that are all aging and need to be maintained, Walker said.

“Repairing and maintaining one of those tanks costs about $4 (million) to $5 million,” he said.

The city currently gets about 40% of its water supply from outside of the city, with the majority coming from underground sources that it pumps out of the ground and treats at a 30-year-old facility near the Long Beach Airport.

The department has a goal of decreasing its reliance on imported water from the California Water Project and the Colorado River, which have increased in price due to ongoing drought conditions. Shannon said last week that investing in groundwater infrastructure could help keep future water rates lower and ultimately save customers money.

The city is required to transfer the remaining $21.8 million by September, when the Water Commission will likely vote on what to do with it. Water commissioners urged residents Thursday to show up early to budget meetings that it will likely host in May so they can be part of that process.

“Please don’t wait until the August Prop. 218 meeting to air your grievances,” Commissioner Frank Martinez said, referring to a legally required hearing when the agency adjusts rates.

The department has yet to finalize dates for the first budget meeting, but water officials said it would likely be May 12 or May 19.

City loses legal appeal over Measure M sewer and water fees

In major budget blow, Long Beach must pay back $30.8M after court denies hearing on water, sewer fees

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Jason Ruiz has been covering City Hall for the Post for nearly a decade. A Long Beach resident, Ruiz graduated from Cal State Long Beach with a degree in journalism. He and his wife Kristina and, most importantly, their dog Mango, live in Long Beach. He is a particularly avid fan of the Dallas Cowboys and the UCLA Bruins, which is why he sometimes comes to work after the weekend in a grumpy mood.
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