By Sara Beth Williams–
Citrus Heights Water District (CHWD) and Fair Oaks Water District (FOWD) have filed a joint lawsuit against San Juan Water District according to an April 11 press release.
The joint lawsuit was filed on April 10 “as a last resort” and alleges that a recent rate increase proposed by San Juan Water District illegally overcharges Citrus Heights and Fair Oaks customers.
The SJWD board of directors approved a rate increase in December 2023, despite Director Pam Tobin “urging more coordination” with other local city water districts, according to the release.
“Local residents, business owners, and our Districts pleaded with the SJWD Board to work with us, but they simply approved the rates over our opposition,” CHWD Board President Caryl Sheehan said in the news release.
The San Juan Water District responded to the suit in an April 12 press release, calling the lawsuit a “nuisance litigation” that “has no merit.” SJWD said it will be filing a response with the court by May 27.
This is the second suit filed by CHWD and FOWD against San Juan in the past seven months, the district said in its release, adding that the first lawsuit was dismissed by the Sacramento Superior Court in January.
San Juan is a wholesale water agency that provides water to five local water agencies, including those in Fair Oaks and Citrus Heights, who in turn deliver it to homes and businesses, according to its website.
According to the Citrus Heights Water District’s press release, plaintiffs allege that San Juan sells its least expensive water to other areas, which leaves Citrus Heights and Fair Oaks customers with higher water bills. The news release did not specify which areas are receiving less expensive water.
The legal complaint also suggests that under the newly approved rate plan, local water agencies are “disincentivized to conserve or use local, reliable groundwater.” The suit claims that discouraging conservation directly conflicts with state policy and “decades-long efforts” to build and conserve regional water supply resiliency.
San Juan addressed the allegations in its news release, stating that the board used industry consultants recommended by local water agencies, as well as independent industry consultants, to help prepare a five-year-wholesale rate plan, which was delivered to local water agencies five months before the San Juan board approved the rate increase “to allow for robust review and input.”
“San Juan’s wholesale rates that I and my fellow Board members approved in December are fair, reasonable, responsible and meet all legal requirements,” said Manuel Zamorano, president of the San Juan Board of Directors, adding that the five-year plan was based on operating and maintenance costs, future capital investment needs, and an “ultra-low” interest loan. Zamorano also added that rate increases were necessary to address growing inflation.
San Juan’s five-year wholesale rate plan includes annual rate increases of five percent for 2024-26, dropping to four percent in 2027 and 2028, according to the district’s release.
“This litigation will be a waste of ratepayer dollars,” Zamorano said.
San Juan Water District provides water service to approximately 265,000 retail and wholesale customers in eastern Sacramento and southern Placer counties according to its website. Citrus Heights and Fair Oaks water districts represent two-thirds of the San Juan Water District population, according to the Citrus Heights water district’s news release.
More information is posted at chwd.org/lawsuit.
