Glendale officials have agreed to repay roughly $500,000 to tens of thousands of its public utility’s customers for overcharging them under a previous water-rate structure, according to a settlement reached between the city and a local government watchdog group.
Approved last week, the settlement also requires the city to repay $55,000 back to Glendale Water & Power for undercharging itself in its 2014 water-rate structure, as well as $550,000 in attorney’s fees for the watchdog group Glendale Coalition for a Better Government.
Beginning Aug. 1, customers who had residential water-rate accounts between October 2016 and June 2018 will be refunded the amount they were overcharged under the city’s 2014 rates, with the money going back into their accounts, the settlement agreement states.
“They were charging a lot of people for the delivery of water that wasn’t costing as much as they were saying,” Frank Gallo, coalition president, said during a phone interview after the settlement was reached. The water rates were recalculated last year.
The settlement resolves two lawsuits, including a class-action suit brought by coalition board member William Taliaferro in 2017 that sought millions of dollars in repayment for ratepayers.
The other suit, filed in 2014, challenged the constitutionality of the city’s water rates, but sought no monetary damages.
In December, an appeals court ruled that city officials erred when they based Glendale’s 2014 water rates on predictions of customers’ future demand for water instead of on customers’ previous consumption, upholding part of a trial court decision in 2017.
As a result, the rates violated Proposition 218, passed by voters across the state in 1996, which mandates pricing be based on “analysis of cost,” the court ruled.
“We did not win every single issue. There are small amounts of credits and refunds being made pursuant to the rate plan,” Glendale City Atty. Mike Garcia said during a council meeting last week.
Each customer’s refund will depend on how much water they consumed and what rate they were charged during the time period covered by the settlement, according to coalition member Roland Kedikian.
Garcia said the city estimates that the total cost repaid to ratepayers will be under $500,000. Gallo estimated that there were 43,000 active water accounts during the years covered by the settlement.
One issue the city won on appeal was the right to include a fire-service fee in its water rates, reversing an earlier trial court decision.
“That’s the primary reason that the [City] Council pursued that appeal,” Garcia said last week, estimating that the city saved $2 million a year as a result.
Because the class-action suit was filed three years after the illegal rates were made, the plaintiffs in that case could not seek refunds for those three years, Gallo said. That curtailed the total damages, which otherwise could have been in the millions, he added.
Meanwhile, the two sides have another legal matter to resolve.
In December, the same appellate panel ordered a separate case brought by the coalition against the city in 2014, concerning its electricity rates and General Fund transfers, to return to L.A. Superior Court for further proceedings.
A trial-setting date for that case has been scheduled for early July.