FRESNO, Calif. (KFSN) -- A setback for the City of Fresno came Thursday. Plans to improve its aging water system, funded by rate hikes, are on hold.
The city council voted to repeal last year's rate increase as part of a legal settlement. In a closed session the council approved the settlement agreement with Doug Vagim, a former Fresno County Supervisor.
The city will pay Vagim $150,000 to cover his legal fees. Last year's increases on resident's water bills are gone.
It's a major blow to the city's $410 billion improvement project. But City Hall maintains this deal is a good move.
The Fresno City Council voted unanimously Thursday, minus absent Councilman Paul Caprioglio, to repeal water rate hikes imposed in 2013.
"I'm very happy," Vagim said. "I hope the community will be ready to roll up their sleeves, with us."
Vagim led the movement to allow voters to decide on water rate increases. He turned in a petition calling for a ballot measure. And after months of legal battles the city backed off, saying it's willing to wade toward mutual ground.
"If there's in any way we can try to deliver the product in terms of cost efficiency, rates and so forth, we should do that," said Councilman Lee Brand.
The city says it's losing out on already paid for water that the current system can't process or store for use.
It's clear concern in Fresno is seeing something a nearly 100-year-old water main burst in Los Angele Tuesday, causing tons of damage.
Much of Fresno's system is just as old, so upgrades will be costly.
ABC 30 legal analyst Tony Capozzi is praising Vagim for his David and Goliath-like battle. "No one believed he could do anything when he objected to the water rate increase," Capozzi said. "Council ignored him. City government ignored him. But yet he went forward and got the petitions, spent his own money."
Mayor Ashley Swearengin calls this a win for all, saying in part "the city's goal is to complete the infrastructure projects needed to guarantee our residents a safe and reliable water supply."
Swearengin pushed this rate increase and infrastructure improvements from the start.
The city says it's concerned the next time it needs to raise rates that someone else could step forward to challenge that. But all involved are hoping to come to mutual agreements of how to save and improve the city's water system.
Water rates cannot go up for six months.