Legal Battle Shapes Up on Sewage Costs : Waste treatment: After suing neighboring cities for their share, Los Angeles is countersued for alleged overcharging for the Hyperion upgrade project and other services.

A long-running wrangle between Los Angeles and neighboring cities about how to split the bill for sewage treatment and for the cost of improvements to the Hyperion sewage treatment plant in Playa Del Rey has degenerated into a tangle of litigation.

In recent weeks, Los Angeles has filed suits against Santa Monica, Beverly Hills, Culver City and county Sanitation District 4, which oversees West Hollywood’s sewage treatment at the Hyperion plant. Los Angeles, which owns the plant, is seeking to recoup millions of dollars the smaller cities have withheld in payments for sewage treatment and capital costs at Hyperion. The plant is undergoing a $1-billion overhaul required by a 1987 federal consent decree, to halt pollution of Santa Monica Bay.

The contracting cities and sanitation districts have countersued, alleging that they are being overcharged for the capital costs and for their use of the plant. Most of the cities and agencies have also countersued for breach of contract, citing a federal clean water law that they claim requires Los Angeles to renegotiate subscribing agencies’ contracts, basing charges on sewage quantity and quality.

Some environmentalists have expressed concern at the growing legal fight, saying it could obscure the pressing need to improve the water quality in Santa Monica Bay.

“There are some irreconcilable differences and it’s for a judge to decide what’s equitable,” said Mark Gold, staff scientist for Heal the Bay. “We just want to make sure it doesn’t impact the city of L.A.’s compliance with their consent decree with the federal and state government to go to secondary treatment by 1998. The quicker this gets settled, the better it is for (Santa Monica) Bay.”

The Westside cities are late entrants in a vast legal battle. Others named in related suits, the first of which was filed in Los Angeles Superior Court in August, 1991, against El Segundo, include Burbank, San Fernando City and county Sanitation Districts 5, 9, 11, 16 and 27, which serve Gardena, Hawthorne, Inglewood, Lawndale, Lomita, Manhattan Beach, Palos Verdes Estates, Rancho Palos Verdes, Redondo Beach, Rolling Hills, Rolling Hills Estates, Torrance, Alhambra, San Marino and South Pasadena.

The dispute between Los Angeles and Santa Monica is fairly typical. Los Angeles sued the smaller city in February for withholding more than $3 million for capital improvements. Santa Monica’s acting city attorney, Joseph Lawrence, said his city has countersued.

“As best as we can tell, Los Angeles is overcharging the city,” Lawrence said. “Santa Monica has had an aggressive water conservation program in place for two or three years now with plumbing retrofitting, reducing the toilet outflow for an entire city. You don’t need the sewer capacity that was (originally) planned. Now we are trying to figure out what is a fair percentage for Santa Monica to pay for capital costs.”

Lawrence said Santa Monica has been in negotiation for three years over “appropriate billing,” Santa Monica’s allocated plant capacity and alleged overcharges for capital improvements.

The Hyperion plant, the largest treatment plant on the West Coast, serves a 480-square-mile area that includes most of Los Angeles and many surrounding cities. Years of complaints from environmentalists and federal regulators over inadequate sewage treatment and disposal practices culminated in the 1987 consent decree in which Los Angeles agreed to undertake the vast upgrading that is now in progress. The goal of the $1-billion improvement plan is to expose all sewage passing through the plant to full secondary treatment, in which air is bubbled in to to help aerobic bacteria remove more solids, by 1998.

Christine Patterson, assistant Los Angeles city attorney, said she thinks the smaller cities are disputing their bills, in part, because of financial difficulties.

“We never had any of these complaints until recently,” Patterson said. “Los Angeles operates a sewage treatment plant not for profit. We bill cities pursuant to contract for their costs, and their costs don’t fluctuate with daily outflow. Most of those contracts are decades old, and if you’ve agreed to a contract, you have to pay. El Segundo has not paid in five or six years and has basically been availing themselves of our services, flushing for free and subsidized by all the other cities. The others have disputed what (fees) we’re asking for and I think are hoping for a settlement.”

Like Santa Monica, Culver City, also named in the suit, has withheld several million dollars over the last two years in what city officials allege are excessive fees.

Culver City Atty. Norman Herring said his community has countersued, accusing Los Angeles of creating a public nuisance with the North Outfall Facility, a sewage treatment plant located at Jackson Street and Jefferson Boulevard. The countersuit also concerns alleged inadequate accounting of charges for the city’s use of Los Angeles treatment facilities. Herring, however, would not comment on fees for capital costs.

“This is really over a 1951 contract,” Herring said. “We just don’t think they know the proper fees. In the claims we’ve disputed, we’ve asked for explanations four times and they haven’t responded. And (Los Angeles) is stinking up our city, affecting hundreds of people who live here. What happens in periods of heavy rains is the (North Outfall Facility) dumps partly treated sewage into Ballona Creek.”

For West Hollywood, the dispute concerns more than $5 million that has been withheld in payments for sewage treatment, according to Janette Knowlton, the attorney representing all six county sanitation districts named in the lawsuit.

“We need judicial intervention to determine West Hollywood’s fair and equitable charges,” Knowlton said. She contended that contract cities and sanitation districts are being charged for capital improvements that benefit only Los Angeles.

Beverly Hills is being sued by Los Angeles for $6 million in unpaid charges, Beverly Hills City Atty. Gregory Stepanicich said. The smaller city has countersued, alleging many of the same complaints as the other contract cities and districts.

“We also contend that the expansion we are being charged for is not benefiting Beverly Hills,” Stepanicich said, “because we are not using full capacity (of the Hyperion plant) allocated our city now.”