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Lincoln City Leaders Illegally Overcharge Residents Millions Of Dollars For Water

LINCOLN, Calif. (CBS13) - A group of citizens in Lincoln have successfully sued the city after they allege the city was overcharging residents for their water rates.

Residents say they warned the city before the rates were put into place, but city leaders didn't listen.

This group says they were shocked after seeing water rates skyrocket, launching their own investigation discovering that what the city was doing was illegal.

"My bill was sometimes $650-$700 a month; it was ridiculous," said Lincoln resident Jerry Jackson.

Jackson is part of the group that's angry over water rates. A former department head for water issues in Roseville, he was part of a lawsuit charging the city of Lincoln with cheating customers out of millions of dollars.

"It wasn't right and we proved it with the limited lawsuit we filed," he said.

It's a lawsuit they won. The city reached a preliminary settlement and $1.2 million will be refunded, but there's a statute of limitations that applies to municipalities of one year. This group claims there's a lot more money that should be returned to the 40,000 residents of Lincoln.

"You guys are in violation. You need to refund about 10 million bucks," he said.

The Group hired a law firm to warn the city about the violation after they say the city wouldn't listen to them.

"They told us from the beginning we weren't smart enough," said one Lincoln resident.

The law firm informed the city in 2013 that the tiered rate structure they were proposing was a violation a Proposition 218.

"It states that cities can't make any money by providing any of the services that they provide. They can only charge their exact cost," said a Lincoln resident.

But this group says that's not what happened. Their rates increased dramatically -- higher than nearby cities -- even higher customers in San Francisco.

"It was three and four times as much is it cost them," said Jackson.

Lincoln Mayor Peter Gilbert tells CBS13 the issue was handled improperly, and could have been resolved better, but the city relied on water advisory firms and attorneys and he doesn't recall any conversations about them being in violation.

Not satisfied, this group says it's not stopping its investigation into water rates, moving onto sewer rates and other areas it thinks the city may be handling improperly

"We are trying to help the citizens of Lincoln paid fairly for what they get," said a Lincoln resident.

Mayor Gilbert says funds taken during that time of tiered water rates are in the city's enterprise fund. He said he didn't know exact amount, but says it was in the millions of dollars. He says those funds will be used for water issues and the city can't legally give them back to the residents even though they were taken illegally because of that one-year statute of limitations.

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