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Judge rules City of San Diego overcharged water customers $79 million since 2014

The City has appealed the ruling, asking for the case to be dismissed.

SAN DIEGO — Months after a judge ruled the City of San Diego is overcharging some water customers, the city has yet to pay up, or make changes to its rates.

Attorneys say the delay is costing taxpayers millions in penalty fees.

They filed the case back in 2017, saying San Diego was violating a portion of the California constitution, which states governments that provide services are not allowed to charge more for those services than it costs them to deliver.

"So, whatever it costs to deliver water to a house, that's what they're allowed to charge and they're not allowed to charge more than that," said Attorney Steven Tindall with the Gibbs Law Firm.

Specifically, the suit alleged San Diego had been overcharging single family residential customers in tiers 3 and 4, which are those who use more water than the average customer.

The liability part of this case was first heard in 2021.

Then, just this past March, during the damages phase, a judge ruled against the city, saying they owed customers more than $79 million dating back to 2014, which is the earliest the statute of limitations would allow.

"In addition to that, the court said for every month after March 31, that amount goes up by an additional 643,000 until San Diego changes the water rates to make them constitutional," said Tindall.

Tindall says so far, no customers have been reimbursed and no changes to rates have been made, resulting in even steeper penalties.

"That's been five months since then. That's an additional over three-million dollars that the judgement has increased because San Diego has not changed the way it's done it's water rates to make them constitutional," said Tindall.

Tindall estimates it breaks down to nearly $21,000 a day.

CBS 8 went straight to the city to get their take on the matter.

In a statement, a spokesperson for the city attorney's office said:

“The court’s ruling, if upheld, will benefit the top 20% of water-using single-family households in San Diego. These high-end water users will be enriched at the expense of the 80% of residential households that use less water. As the City does not profit from its tiered water rates, the City will not pay whatever judgment the court awards. Rather, all San Diego water users will pay it through higher water rates. 

 The City of San Diego maintains the tiered water rate structure it based on Cost of Service Studies in 2013 and 2015 is perfectly legal, and it continues to fight to protect its method of charging higher rates to the high-end users whose demand creates additional costs for the water system. The trial court judgment is on appeal, and the City’s opening brief is due on September 19, 2022. As part of the appeal, the plaintiffs ask the Court of Appeal to increase the award to the high-volume water users to as much as $120 million. The City argues that the entire case should be dismissed as wrongly decided.”

If the city wins its appeal, they'll be off the hook. If not, they'll have to pay up and change rates.

A hearing is being held on Monday, September 20 at 2 p.m.

The hearing does not address the legal judgement but will allow San Diego homeowners to comment on water rate increase issues. 

At the hearing, the City must disclose when changes will be made to the currently tiered water billing system. 

WATCH RELATED: Drowning in debt: Nearly 70,000 San Diego families are behind on water bills (February 2022)




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