L.A. to Pay Millions in Sewer Bill Refunds : DWP: An agreement is reached to reimburse thousands of septic users who unknowingly paid for city sewage service.

The city of Los Angeles has agreed to make an estimated $2 million to $4 million in reimbursements to residents who unwittingly paid for sewer services they did not receive, officials said Wednesday.

Under an agreement between the city and state Assemblyman Richard Katz (D-Sylmar), the city will make the refunds after a study identifies those residents who unknowingly paid city sewer fees even though they were on private sewer systems. The city agreed to the reimbursements after a state Assembly committee approved legislation that would make the city’s current sewer billing system illegal beginning Jan. 1, Katz said.

Department of Water and Power billing procedures that took effect in 1978 charged all water customers for sewer services whether or not they were connected to the sewer system. Users of septic tanks and other private disposal systems could apply for exemptions, but many failed to do so because they did not read or could not understand annual inserts in water bills explaining their rights, said Fred Nakamura, an attorney for San Fernando Valley Neighborhood Legal Services.

It was Nakamura who brought the problem to light when he filed a claim against the city in June seeking refunds for eight Pacoima septic tank users. Nakamura said Wednesday that the lawsuit will be unnecessary if his clients are reimbursed promptly. Under the agreement, the city must make the refunds by July 1, 1991.

Los Angeles officials are uncertain how many residents are entitled to refunds, but with households paying an average of $10.43 a month in sewer fees, Katz said some residents could receive refunds of several thousand dollars.

“Homeowners have been ripped off because the city of Los Angeles was too lazy to find out if they were hooked up to the sewer system,” said Katz, whose district includes Pacoima. “The Department of Water and Power has been operating with a ‘collect now, hope they don’t ask questions’ mentality, and that’s just wrong. People should not have to pay for services they don’t receive.”

The city had said in response to Nakamura’s complaint that billing only those who use the sewers was impractical because it did not know which properties are connected to sewers. Many sewer permit records are outdated or nonexistent, city officials said.

But members of Katz’s staff and city officials have determined that they can obtain the information by conducting a study to identify water customers who have permits for sewer connections. Properties that have water hookups but no sewer connections most likely are on septic tanks or other disposal systems, officials said.

Fred Hoeptner, a Department of Public Works senior civil engineer, said the study is “a pretty massive job” that will require hiring additional staff members. He said he did not know how much it would cost.

“We don’t oppose the principle of granting adjustments to people who aren’t connected to sewers,” Hoeptner said. But there is a question of whether “we have enough time to do it,” he said. The city had asked for two years to conduct the survey.

The agreement calls for the city to reimburse septic tank users beginning from the date they moved into their residences. If exact amounts cannot be determined, the city must calculate the refund by taking the average of rates typically paid by customers in a similar property category.

Residents who mistakenly paid sewer fees but have since moved will be reimbursed only if they request repayment, the amendment states.

The Valley has a disproportionate number of houses on septic systems because many outlying areas are not served by city sewers. The Pacoima residents named in Nakamura’s claim are all residents of Brownell Street, where there is no sewer access.