The San Juan Capistrano City Council approved a refund/credit process on June 16 for tier 2, 3, and 4 water customers who paid the city’s previous tiered water rates, which have since been ruled illegal by the 4th District Court of Appeals. Last month, the city settled the lawsuit questioning the validity of the previous rates filed by the Capistrano Taxpayers Association.
The council approved the refund/credit process by a 3-2 vote, with Mayor Pro Tem Pam Patterson and Councilman Sam Allevato dissenting. Top tier customers who paid water bills between Aug. 28, 2013 and June 30, 2014 will need to apply for either a refund or credit from the city.
Assuming that 100 percent of the water customers who overpaid complete and return a claim form, the refund/credit, in addition to the CTA settlement, is expected to have a fiscal impact to the city’s Water Enterprise Fund of approximately $4.1 million. City staff is recommending that the $4.1 million be funded by an inter-fund loan from the Sewer Enterprise Fund to the Water Enterprise Fund. The proposed loan agreement will come back before the City Council.