LIVERMORE — The city of Livermore will pay back over $4 million to utility customers after the City Council voted to settle a lawsuit that alleged officials illegally collected fees for services that didn’t exist.
In a closed-session meeting on Sept. 8, the City Council unanimously voted to settle the suit filed in October 2023 by the Alameda County Taxpayers’ Association and Livermore resident Alan Heckman.
The decision, which was announced during the council’s later public session, includes a $1.56 million credit to the city’s water utility, a $2.22 million payment to the sewer utility and $271,000 in legal fees. Heckman and the ACTA claimed the city collected charges for water and sewage services that residents never received. Customers should see reduced bills, with the settlement money going toward the overpayments previously made.
The ACTA did not immediately respond to a request for comment Monday. The taxpayer association has been known to take local governments to court, including bringing an unsuccessful lawsuit Alameda County aiming to block Measure W, a controversial $1.8 billion bond voters narrowly approved in 2020 that officials are now using to combat the region’s homelessness issues. In 2022, ACTA lost another lawsuit filed against the county to block Measure C, a 2020 half-cent sales tax that now provides $150 million annually to early education and affordable childcare programs to county residents.
The Livermore lawsuit alleged the city overcharged customers $2.5 million annually between 2020 and 2023 and transferred some of the money to the city’s general fund. The taxpayer association claimed that the city “violated, and continues to violate” because the general fund can be used “for purposes other than providing utility service,” such as paying employee salaries and benefits.
Livermore’s utility service area is about 28-square miles, serving a population of about 90,000 people, including water service to about 9,500 accounts. The city’s storm water infrastructure consists of 7,000 storm drains and 225 miles of storm pipes.
Mayor John Marchand on Monday told this news organization the case breaks down to “a difference of interpretation” in how the city has to recover its costs for maintaining its water infrastructure. He said that the fees were used to pay for infrastructure improvements and repairs that also included repairs to the roadways above water lines when the city repaired or replaced underground pipes.
“We just need to be more transparent and clear in how all of those infrastructure costs are recovered,” said Marchand, who spent 40 years working as a chemist at the Alameda County Water District. “This wasn’t some big pot of money that was thrown open for anybody. This was to provide the cost of the infrastructure and replacement.”
As part of the settlement, the city did not admit fault but agreed to create a new street pavement maintenance fund, to which it will later charge costs for future street repairs.
Marchand added that Livermore has been “very efficient” in funding and maintaining its water and wastewater infrastructure, compared to neighboring cities that are suffering through multi-million-dollar budget deficits and shortfalls due to failing and aging infrastructure.
For example, the city of Pleasanton has been plagued by water infrastructure issues due to damaged water lines and contaminated wells amidst a devastating $100 million budget deficit through the next several years.
Marchand acknowledged that paying to replace water lines and storm drain improvements can seem expensive to the city’s utility customers, “but it’s not as expensive as having it fail.”
“My mantra is, those who benefit pay. If you expect to benefit from that infrastructure, you have to pay,” Marchand said. “The bottom line for all is that the city has to recover the costs of providing this service.”
