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San Diego Union Tribune
25 Jun 2004

Suit alleges $10 million in sewer-rate overcharges


A week after the San Diego City Council lowered sewer fees for single-family homes, a lawsuit was filed against the city, accusing it of overcharging homeowners $10 million in sewer rates since 2000.

The lawsuit, filed June 16 by Michael Shames, executive director of the Utility Consumers' Action Network, contends that the city was charging homeowners for sewer fees that should have been paid by commercial customers.

The lawsuit seeks unspecified damages. An earlier claim Shames filed against the city sought a $10 million refund for sewer customers who he says were overcharged from 2000 to 2004.

The claim was filed April 30 and rejected by the city Department of Risk Management two weeks later.

The city receives federal grants and low-interest state loans that require it to charge sewer users based on the waste they generate. The lawsuit alleges the city violated the requirement by collecting sewer fees that didn’t vary based on the amount of organic pollutants in the waste.

Sewage from commercial and industrial customers has greater levels of organic pollutants than does residential waste, the lawsuit contends. Organic pollutants include pesticides and other chemical products and by-products.

Maria Velasquez, spokeswoman for the City Attorney's Office, said the city received the lawsuit Monday but that lawyers need more time to review it before the city comments.

Attorney Jim Krause, whose firm was one of three that filed the lawsuit for Shames, said the city indicated its fee system was flawed June 8. That day, the council lowered sewer rates in single-family homes by up to 23 percent to comply with state regulations.

"It's almost an admission that you haven’t been charging correctly," Krause said.

Shames wants a judge to certify the case as a class-action lawsuit to represent everyone who owned residential property in San Diego from June 16, 2000 to June 8, 2004. He filed the lawsuit on his own and not as head of the consumer group.

The claim said the over-charging has gone on for 16 years, but Krause said a legal statute prevents him from asking for a larger refund.

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