Congratulations (sort of)! Due to a state Supreme Court ruling against the city, you’ve got some cash coming your way.
The Good News: You can expect a refund to appear on one of your upcoming utility bills. The helpful Jason at SPU says that the average family of four will see refunds of around $45.00. Actual amounts vary according to your individual use, and will only appear for people who had active water accounts prior to January 2005.
The Fine Print: Think of this more as a loan, since you’ll be paying that refund back to the city over the next 20 months, through a temporary 10.2% surcharge on the water portion of your bill.
Since the Great Fire of 1889, the city has funded the cost of fire hydrants through the water rates charged to utility customers. In 2003 the Supreme Court ruled that a similar scheme for street lights was illegal, and the city decided it would have to start paying for hydrant costs out of the city’s general fund and refund customers for the hydrant charges they had previously paid.
But, the city council didn’t want to have to cut other city services to pay for this refund, so they got creative and placed a temporary surcharge onto the tax that they charge to SPU. The money from that tax goes back into the general fund to pay for the rebate, essentially having water rate-payers re-pay for the previous costs of maintaining fire hydrants. That surcharge will stay in place through the end of 2010.
The bottom line: might as well put your refund in a savings account and earn some interest on it as you pay it back over the next year and a half.
From the P-I on February 18: “More than $4 million of the lawsuit cost is for lawyer fees and interest that accrued while the city appealed the court decision.”