Facts

On August 15, 2017, Adam Hoffman and Samuel Jason, individually and on behalf of all others similarly situated, brought a class action against City of Los Angeles. The class included any Account holder who paid Sewer Services Charges to the City of Los Angeles calculated subject to the Dry Winter Compensation Factor for a single-family residence or multi-family residential building of four or fewer units who lack separate indoor (tributary) and outdoor (non-tributary) at any time from May 4, 2016, through June 30, 2022.

PLAINTIFFS' CONTENTIONS: Plaintiffs alleged that defendant overcharged certain customers of Los Angeles Sanitation for residential property sewer services. In particular, plaintiffs maintained that defendant improperly determined the annual Dry Winter Compensation Factor, which was used in calculating sewage services charges for single-family properties and multi-family properties of four or fewer units that lack separate indoor (tributary) and outdoor (non-tributary) water meters, thereby overcharging such customers from May 4, 2016, through June 30, 2022. Further, plaintiff contended that defendant improperly failed to timely return to the Sewer Construction and Maintenance Fund certain related costs overpayments made in connection with the annual budgeting process for City Departments that performed various services for the sewer system in violation of California Constitution Article XIII D, Section 6.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Result

The City of Los Angeles agreed to create a $57.5 million Settlement Fund. Additionally, the City will implement the agreed methodology for determining the Dry Winter Compensation Factor and perform related costs reconciliation and return to the Sewer Construction and Maintenance Fund monies due under the reconciliation as soon as reasonably practicable after the close of each fiscal year. Finally, the City will include pension contributions in the overpayment reconciliation and ensure that rebates from the Los Angeles City Employees Retirement System are allocated back to the Sewer Construction Maintenance Fund in proportion to the Sewer Construction Maintenance Fund's pension contribution expenditures.