Wastewater Services and Sewer Charges to Change Hands

The Grand Terrace City Council voted on March 11th, 2014 to transfer the obligation of maintaining the Grand Terrace wastewater collection system, providing the day-to-day operations, and overseeing the collection of monies from the residents of Grand Terrace to the City of Colton. The transfer was negotiated between the special counsels of both cities and completed through an agreement between the staff and city council members representing each of the two cities as they worked to settle the ongoing dispute of sewer fees collected. This action was due to litigation brought forward by the City of Colton in reference to the dispute over the amount of fees Grand Terrace allegedly owed Colton for sewer services performed under prior sewer agreements dating back several years. A rumored amount of nearly $3-4,000,000 was owed to the City of Colton. After discussions were finalized over the past few weeks, the parties drafted three agreements which both sides need to sign for the finalized settlement to be completed, which included: a) a Settlement Agreement and Release b) a Sewer Services Agreement c) a Lease Agreement Under the terms and conditions of the agreement, Colton will operate and maintain the Grand Terrace wastewater collection system, and will collect all applicable charges from users in the City of Grand Terrace. Colton will make an annual lease payment of $300,000 to Grand Terrace, which will be based upon a system evaluation currently being conducted by consultants approved by both cities and contracted by Colton. Within the sewer services agreement, Grand Terrace will receive a one-time $400,000 cash infusion to its General Fund once the agreement is finalized by both cities. As mentioned by the special counsel representing Grand Terrace, “Grand Terrace shall pay the Colton Authority $1.2 million from their reserve fund as settlement of the fee dispute, and Grand Terrace shall transfer the remaining amounts held in its reserve fund to be put in a fund to pay for any unexpected capital improvements to the Grand Terrace system.” In terms of rates going to be charged to Grand Terrace residential customers, the rates are expected to rise from $27 per month for single-family residences to approximately $32.75 per month; the rates for Colton residents will also be approximately $32.75. After the council discussion on March 11th concerning these 3 agreements, the council unanimously approved the item. One week later, on March 18th, Grand Terrace Mayor Walt Stanckiewitz and Interim City Manager Kenneth Henderson represented Grand Terrace at the Colton City Council Meeting to show support and encourage Colton’s City Council to approve the three agreements. Stanckiewitz said, “The sewer fee issues have been festering for over 25 years, and we need to resolve them now.” With that suggestion in mind, Councilman Frank Navarro moved to approve the waste water agreements, and Councilman David Toro seconded the motion, all other members voted in favor of motion with Councilwoman Deirdre Bennett and Councilman Isaac Suchil being absent. The initial term of the settlement agreement will be for a period of fifty years, commencing on the date if the final signed contract and ending on June 30, 2064.