Laguna Beach, South Coast Water District and other agencies sue Moulton Niguel Water District over treatment plant bills

The city of Laguna Beach and South Coast Water District are among multiple agencies that sued the Moulton Niguel Water District, alleging the latter failed to pay more than $755,000 in bills for infrastructure projects of a wastewater treatment facility in Aliso Canyon.

The complaint, filed May 30 in Orange County Superior Court, includes Emerald Bay Service District and the 10-member South Orange County Wastewater Authority as plaintiffs. It claims Moulton Niguel violated contractual agreements as an authority member and as one of four agencies that shares ownership of the coastal treatment plant.

The suit alleges Moulton Niguel owes $755,871, retroactive to last July. This amount covers Moulton Niguel’s 30% share of costs to repair and maintain the coastal treatment plant, which treats 6.7 million gallons of raw sewage per day, the suit said.

Without Moulton Niguel’s portion, “several pending repair and maintenance actions necessary for the safe, future operation of the CTP have been delayed, or soon will be,” the complaint said.

Some of the projects, which include replacing aging electrical equipment and repairing a pipeline that distills solids from the sewage for further treatment, have been on hold for more than a decade, Laguna Beach city manager John Pietig said in a phone interview.

“If the pipeline breaks, it could spill in the regional park, it could make its way to Aliso Beach Park,” Pietig said.

Moulton Niguel, which serves customers in Aliso Viejo, Mission Viejo, Laguna Hills, Laguna Niguel and Dana Point, has not sent wastewater to the plant “in years” and is looking to divest itself of its ownership stake, assistant general manager Matt Collings said.

Collings cited a section of the SOCWA joint powers agreement, which says that any project constructed or “acquired” must have unanimous consent of every member agency.

“To fund improvements in a plant that we don’t use does not benefit our taxpayers and ratepayers,” Collings said, adding that Moulton has continued to pay general, operations and maintenance funds.

The suit said the joint powers agreement mandates Moulton Niguel to “fully perform all of its obligations” including payment of operations and maintenance costs for the CTP in proportion to its ownership capacity including necessary capital improvements and repairs.

Laguna Beach has a 38% ownership stake in the coastal treatment plant while South Coast has 30%, Moulton Niguel has 29% and Emerald Bay Service District has 3%, according to the complaint.

Pietig is concerned about the possible added financial burden placed on Laguna Beach residents if Moulton Niguel does not pay its bills.

“We’re willing to meet with them and figure out a certain way for them to get out of the agreement, as long as [Moulton’s costs] are not passed on to the ratepayers of Laguna Beach,” Pietig said.

“These conversations could have happened a year ago,” Collings said. “I’m disappointed the other agencies are resorting to a lawsuit.”

Laguna Beach, South Coast and Emerald Bay called two public meetings to discuss the matter with Moulton Niguel, the last on May 12.

bryce.alderton@latimes.com

Twitter: @AldertonBryce