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The lawsuit asks the court to declare Pasadena’s rate structure invalid, and to award refunds to its nonresident customers.
The City of Pasadena has been served with a class action lawsuit filed by the Howard Jarvis Taxpayers Association on behalf of nonresident water customers, challenging the rates the City charges them for water.
Pasadena Water and Power, a department of the City, provides water to residents of Pasadena, but also serves territory outside the City. It maintains two rate classes; one for city residents and another for nonresidents. Nonresidents pay 25% more for their water.
The lawsuit alleges that the 25% surcharge is not justified by a 25% greater cost to the City in providing water service to nonresidents, but is an arbitrary mark-up imposed on nonresidents. These ratepayers, because they cannot vote in city elections, are an easy target for the city to subsidize the water rates and charges paid by city residents.
In addition to the 25% surcharge on nonresidents, the City charges all of its customers approximately 6.5% more than is necessary to cover water-related costs, in order to generate an annual surplus that it transfers to the General Fund to help balance the City’s budget for things like police and fire protection.
The Jarvis lawsuit also challenges this annual transfer of revenue from the Water Fund to the General Fund as unfair to nonresidents because the City of Pasadena is not their provider of police, fire, or other municipal services.
Jon Coupal, President of the Jarvis organization, commented on the timing of the case. “California’s drought has literally dried up inexpensive sources of water,” he said. “As agencies turn to more expensive sources, people’s water bills increase. Water is not something people can choose to give up when it becomes too expensive. With seniors and low income families struggling to pay their bills, no agency should be gouging them with unnecessary mark-ups.”
The lawsuit asks the court to declare Pasadena’s rate structure invalid, and to award refunds to its nonresident customers. The City has 30 days to file an answer or otherwise respond to the suit.