Updated: 6:03 p.m. Friday, May 2, 2014 | Posted: 5:45 p.m. Friday, May 2, 2014

Man taking city of Atlanta to court over hidden tax in water bill

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Consumer taking City of Atlanta to court over secretly taxing water customers photo
Consumer taking City of Atlanta to court over secretly taxing water customers

By Jim Strickland

ATLANTA —

An Atlanta resident accuses the city of secretly taxing hundreds of thousands of water customers.

Channel 2 consumer investigator Jim Strickland was the only reporter to speak with the water customer who's taking the city to court.

"It feels like there's an act of deception," said Steve Newton, owner of a Midtown Atlanta condo.

Newton is lead plaintiff in a class action lawsuit accusing Atlanta Watershed Management of charging a hidden tax in the water bill.

"They're taxing themselves, and hiding it and passing it off as a fee. It's kind of absurd," he said.

The city has been charging the water utility a fee to use city infrastructure.  Non-municipal utilities such as Georgia Power and AT&T pay the same type of fee. The lawsuit claims that fee imposed on Watershed Management amounts to the city taxing itself.

"It's a hidden tax, and it's been uncovered," said Newton.

"The money that's involved is $9.8 million per year starting in 2009, and to date it adds up to $58.8 million," said lead counsel Jimmy Hurt.

The suit could cover hundreds of thousands of current and former customers. Newton expects a drawn out court fight.

"When you're talking dollar figures this much, I just don't know of any government entity that says, 'You caught us, you're right.  Sorry, here's your refund.'"

Strickland received the following email from the city's communications department:

"The City of Atlanta was just served with the Complaint in Steven J. Newton et al. v. City of Atlanta yesterday.  While it is the practice of the City not to comment on pending lawsuits, please note that the City remains confident in the validity of the ordinances in question and looks forward to defending the ordinances in court."

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