The Paso lawsuit that just won't die

phild2008@sbcglobal.netNovember 15, 2012 

Three residents of Paso Robles went to court in 2009, alleging the city had illegally raised water and sewer rates in 2002 and 2004. A Superior Court judge finally ruled Oct. 30 on the case. He found in favor of the city. On Wednesday, I telephoned the residents’ lawyer, Paul Heidenreich of Manhattan Beach. He said it looked like they’ll probably appeal to a higher court.

This is like an old horror movie that climaxes with the monster killed and buried. The people celebrate. As the movie ends, we see inside the monster’s coffin. One of his fingers moves.

The people suing the city are John Borst, Brooke Mayo and Teresa St. Clair. Borst is best known. He emerged as a leader in the rate-increase opposition that coalesced in 2007 when city officials clumsily tried to raise water rates.

The city needed higher water rates to pay for getting and processing 4,000 acre-feet of Nacimiento Lake water each year. The city had contracted in 2004 to be a partner in the Nacimiento Water Project.

Water is scarce and precious in California. Paso Robles will probably never again be able to add that much to its water supply. The council’s decision to grab it was “right on.” But the rate increase it approved in 2007 was way off.

The water rate at the time already included $12 per month for Nacimiento water. The council voted to raise that by $12 every year until it reached $60 per month in 2010. Every customer would be charged that $60 regardless of the amount they used. A retired widow would pay as much as a laundry.
That led to four years of hearings, lawsuits, elections, petitions and failed increase proposals. In 2011, the council approved a water rate based entirely on the amount used. Every unit of water (748 gallons) costs $2.50. That rate started this year on Jan. 1. It will increase annually to $4.40 in 2016.

Borst and his colleagues argued that water rates are really taxes that need two-thirds approval by voters. They sued the city twice on those grounds, and two Superior Court judges ruled them wrong.

The 2009 suit, which lawyer Heidenreich is now thinking of appealing, is different from the other two.It is a class-action suit to compel refunds to those water and sewer customers who paid the rates that were raised in 2002 and 2004. The figure $8 million has been mentioned.

Let’s say a higher court approves that suit. Who would pay those ratepayers their $8 million in refunds? Current water and sewer customers would pay it, either through much higher rates or horribly reduced services. I may be wrong, but I only see one person coming out ahead on this: lawyer Heidenreich; unless he’s donating his services in the interest of tax justice.

Phil Dirkx writes special to The Tribune. Reach him at phild2008@sbcglobal.net.

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