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City of Cerritos, et. al.

Litigation Support (2014)

Project Background

The Water Replenishment District of Southern California (WRD) historically charged a uniform replenishment assessment (RA) to all pumpers in the Central and West Coast Basins. The City of Cerritos (and other customers pumping from the Central Basin) hired HF&H to study and compare the cost of serving the Central and West Coast Basins, since previous hydrogeological studies indicated that the two basins are hydraulically separate, which requires that WRD operate each basin separately.

Project Results

  • Our cost allocation analyses found that the Central Basin heavily subsidizes the West Coast Basin by overpaying each year.
  • The WRD settled and agreed to pay $9.1 million to the cities of Cerritos, Bellflower, Downey, and Signal Hill.
  • The primary reason for the subsidy is the cost to replenish the West Coast Basin is much greater than the cost to replenish the Central Basin.
  • HF&H provided expert testimony regarding cost allocation methodologies, generally, and our report, specifically.