The town of Watertown may have to pay Waterbury more than $34 million after a court ruling in a dispute over the rates the city charges for providing water and sewer services.
Waterbury, in late 2018, filed a civil lawsuit against Watertown, accusing it of failing to abide by rates imposed by the city after the town was unable to negotiate new terms. At the time, the town continued paying rates set under a lapsed contract.
The city prevailed in Waterbury Superior Court in 2023, prompting the town to appeal. On Friday, Waterbury Mayor Paul Pernerewski announced a three-judge panel of the Connecticut Appellate Court unanimously upheld the earlier decision.
As of April 2023, Watertown owed $18.8 million to the city. That debt grew at 18% annual interest.
“This is a tremendous win for Waterbury and its taxpayers,” Waterbury Mayor Paul Pernerewski said Friday. “It affirms our right to set fair and reasonable rates for the services we provide, ensuring that our residents are not left to subsidize the obligations of others.”
Pernerewski praised Waterbury Corporation Counsel Angela Juliani and, particularly, city attorneys Joe Mengacci, Dan Foster and Kevin Daly, who handled the trial and appeal.
“Their dedication and expertise led to a successful outcome in this case,” Pernerewski said. “This decision not only validates our position, it protects the financial interests of our city and its residents for years to come.”
Watertown Town Manager Mark A. Raimo said he would meet with town leadership next week to deliberate a response.
“We’re disappointed by the decision, and I will meet with the Town Council next week to discuss options moving forward,” Raimo said.
Watertown has until June 30 to petition the Connecticut Supreme Court for permission to pursue another appeal. The court would have to agree to take up the case.
Pernerewski said any payout from Watertown would go into an enterprise fund and could eventually blunt future rate increases needed to maintain and upgrade the water system, which includes Litchfield County reservoirs, a treatment plant and more than 400 miles of water main that are many decades to more than a century old.
Much of it is in need of repair. It supplies an average of 14 million gallons of drinking water per day to more than 125,000 people in Waterbury, Watertown, Prospect and Wolcott.
The Appellate Court, in its Friday ruling, confirmed that Waterbury has the authority to bring legal action to recover unpaid fees and that the rates charged to Watertown were reasonable and appropriately applied, according to the city.
The court rejected Watertown’s argument that it should pay a lower “wholesale” rate and noted that Watertown was free to contract with private water companies, such as Connecticut Water Co. or Aquarion Water Co.
Those alternatives would have been “substantially more expensive” than Waterbury’s rates.
