Special Enterprise Districts are one of California’s oldest forms of government. Most folks don’t know they exist. They are the first form of government many communities form. Fire protection and water systems are government enterprises folks agree on the common need for early. Somebody to tell you what color you should paint your house comes much later.
These districts usually go unnoticed, until they don’t. All a water district has to do to get on the front page is deliver some putrid water to all of the customers in its service area. Frequent catastrophic leaks come in second. They tend to have more impact on poorer neighborhoods.
Another way these districts can get in hot water is when they don’t play well with others. An unwillingness to follow the rules being a common transgression. This is the case with the Moulton Niguel Water District.
In 1999, Moulton Niguel entered into a contract with its partner owners of a sewer treatment plant. Those other owners include the City of Laguna Beach, South Coast Water District, and the Emerald Bay Community Services District.
Moulton Niguel was concerned that it didn’t have enough sewer treatment capacity to deal with its projected population growth. To accommodate those projected capacity needs, it contracted with the other owners to obtain surplus capacity they had in the plant,
Moulton Niguel concluded later it didn’t need the extra capacity. In 2016 they simply stopped paying the bills for the additional capacity they contracted for.
Those unpaid bills grew into $2.4 million. Money the other owners had to pay out of their own budgets, at a cost to other projects their money was meant for. Just because Moultan Niguel decided not to pay its bills doesn’t make its share of the sewer plant’s expenses disappear.
The other owners went to court. His Honor ruled, that yes indeed, a contract is a contract. Moulton Niguel must pay its obligations for the contracted share of the sewer plant’s capacity until the agreement ends in 2030. It must also pay the plaintiff’s legal expenses.
The money forever wasted in this futile argument is staggering. The total cost of legal expenses, for Moulton Niguel and the other partners, is triple the amount of the original unpaid sewer plant bills. This is ratepayer money that can never be spent on vital infrastructure.
The really disappointing part is the fact that the directors and manager at Moulton Niguel still have their jobs. When you don’t pay your valid bills and squander millions of ratepayer dollars on a frivolous lawsuit shouldn’t there be consequences?
J.J. Gasparotti moved to Laguna Beach with his family when he was 11 years old. He has loved it ever since.