MSWD Settles Lawsuit for Overcharging Customers

Overcharging customers was an open secret, sources say

DESERT HOT SPRINGS — After fighting it for about two years, Mission Springs Water District will pay a $225,000 settlement, plus attorney’s fees, for overcharging customers.

MSWD must now notify customers it will be issuing refunds.

The judge upheld the class-action settlement in a legal action called a “Preliminary Approval” and MSWD must now notify customers it will be issuing refunds. You may read the motion for preliminary approval here.

“Water customers of Mission Springs Water District have long complained about overcharges from the district’s non-working meters,” said Desert Hot Springs Council Member Russell Betts. “After years of hearing problems customers have had, it is nice to see the water customers finally getting some justice out of this agency.”

Betts said MSWD water customers would often call him mistakenly thinking the city is the water company and that he had fielded years of MSWD customer complaints.

The core of the case rests upon the fact that MSWD was charging for Tier 2 rates for accounts with non-working meters. Sources who asked not to be identified said MSWD knew it was over charging customers, especially leadership, but turned a blind eye and deaf ear. Arden Wallum is General Manager/Chief Engineer at Mission Spring Water District; Nancy Wright is president of the Board of Directors and is seeking reelection to an eighth term. Amber Duff is challenging her.

“It is impossible to determine a metered rate even though water meters were not working,” Betts said “That can’t be calculated using a non-working meter.”

Plaintiffs George Padilla and Sharon Moreno, individually on behalf of themselves and all others in a similar situation filed their original complaint on Sept. 14, 2020.

With no liability assigned, both parties agreed to enter into a $225,000 settlement agreement for impacted customers in the Tier 2 class. The court appointed a third-party settlement fund administrator who will soon contact and provide notice to affected customers.

The complaint alleged that the District had defective and failing water meter registers for years. The Complaint also alleged that the District adopted an undisclosed practice of “estimating,” rather than metering, water usage. While estimates were being utilized, the District had a two-tier system of water charges. The so-called “Tier-2” rates charged a higher price for “excess” water usage. However, the so-called “excess” usage, for which the District charged the “Tier-2” rate, were only “estimates” based on historical usage.

The complaint defined the class to include all current and former water customers of MSWD who were
charged and paid MSWD based upon these “estimates.”