SAN FRANCISCO — Dennis Cushman, assistant general manager of the San Diego Water Authority, recently told the Northern California Record that the most fundamental issue at stake in the authority's dispute with the Metropolitan Water District is whether it must limit the rates it charges for service.
The California Sixth District Court of Appeal recently reversed a trial court’s decision regarding an agreement’s attorney fee provision that denied the authority an additional $2.6 million for prosecuting the second phase of a trial between the feuding water agencies. Cushman said the win is about more than just money.
“Both the trial court and court of appeal found that Metropolitan Water District overcharged the [San Diego] Water Authority and its ratepayers by tens of millions of dollars over just four years that have been litigated and breached its contract with the water authority in which it pledged to charge only lawful rates,” Cushman said.
Cushman said the stakes over the initial 45-year term of the water transfer are as high as $7.4 billion.
“In addition to the money in dispute, the trial court and the court of appeal found that Metropolitan Water District illegally under-calculated the water authority’s water right to the Metropolitan Water District supply by about 100,000 acre-feet of water right annually,” Cushman said.
Cushman said that along with a significant water rates victory, the water authority secured a noteworthy “water rights victory for our 3.3 million residents and our $220 billion economy.”
The water authority’s Board of Directors is so steadfast in assuring ratepayers are “not unfairly and unlawfully overcharged,” it has decided to refund its customers, according to Cushman.
“The board has already determined that the net amount of overcharges we recover as damages from Metropolitan Water District, minus any unrecovered legal expenses, will be refunded to our 24 member retail water agencies and cities in direct proportion to their share of the overcharges,” Cushman said.
The appeal process was imperative to the outcome, according to Cushman.
"Appeals are important because the courts do not always get everything right,” he said. “That potential certainly remains, especially considering the statewide importance of these cases.”
Cushman said that for litigation with such “magnitude and scope is a marathon, not a sprint,” and there is no set date of resolution.
“It takes determination and perseverance to see a legal dispute like this through to completion,” he said.