Holding Pattern: Petitioners Not Ready to Turn in Water Initiative Signatures


water-rate-iconCity and YRAPUS Await Judge Maguire’s Ruling – Despite claims to the contrary last week and this week, a group of petitioners looking to qualify an initiative for the June ballot are not ready to turn in their signatures yet, Michael Harrington confirmed on Thursday.

To qualify for the January ballot, the initiative backers would need to submit their signatures within the next two weeks.  In order to qualify they would need five percent of the numbers of votes cast for candidates for governor in the city of Davis in 2010 – a figure which is 1161.

The initiative seeks to invalidate water rates that were set during the joint Measure I – Prop 218 process in the spring of 2013.

“New rates approved by the City Council this year increase annually for the next five years,” the initiative backers, Pam Nieberg and Ernie Head write in their initiative statement of proposed action.  “After the five year increase, the water bill paid by a typical, single-family residential customer (including new base rates and consumption fees) will have at least tripled.”

They also attack the Prop 218 process, arguing, “Voters have not been given the opportunity at a regular, direct election to approve recent water rate increases, despite the voters’ clear statement in the successful Fall 2011 water rates referendum that the voters desired to repeal or vote upon such large increases.”

They add, “The people of the City of Davis desire to establish reasonable water rates that accurately represent the cost of providing water services to residents and business. By approving this initiative, voters will repeal the confusing, unfair and onerous CBFR rates that the City Council deliberately kept away from the voters by excluding these rates from the March 5, 2013 ballot with the surface water project.”

The initiative seekers are running out of time to get the initiative on the June ballot.  In the meantime, we still await Judge Maguire’s ruling.

On Thursday, a local columnist noted, “A recent case in Southern California may shed some light on the situation … in a case decided several months ago, Orange County Superior Court Judge Gregory Munoz found the city of San Juan Capistrano’s water rates “invalid because the fees imposed on each parcel or property exceed the proportional cost of the services attributable to each parcel.” …”

In September 2013, Orange County Superior Court Judge Gregory Munoz issued a final ruling in a lawsuit brought against the city by the Capistrano Taxpayers Association.  What is less clear is whether it would have any bearing at all on Davis’ water rates.

The issue in San Juan Capistrano does not appear to be congruent with the issues raised in the Davis Case.

The Capistrano Taxpayers Association argues that in the tiered rate system, that has four tiers and substantially raises the water rates under Tiers 2, 3, and 4, “the City failed to provide any evidence to justify the new rates as required by Proposition 218.”

Judge Munoz ruled that the city failed to carry its burden by proving that the Tier 2, 3 and 4 water rates were “proportional to the costs of providing water services to its customers.”

As the local paper noted, “Like many cities, San Juan’s tiered water rate structure is not designed to accurately reflect cost of service, but to discourage high-volume water use and encourage conservation by charging more to rate payers for excessive use.  This is social policy, not cost recovery. If that was the only question, there would be no dispute and no litigation.”

Interestingly enough, the paper notes that Prop 218 is in conflict with the California Constitution, which “requires that public policy encourage water conservation.”

The Orange County Register notes, “A grand jury convened to study water issues in Orange County said in April that, essentially, you should be. A 36-page report issued by the grand jury recommends more cities implement tiered rate systems, calling them ‘one of the best practices in the search for new methods of conservation.’”

The paper goes on to note, “Munoz’s ruling didn’t declare all tiered systems illegal. It simply said San Juan Capistrano’s is illegal because it’s not based on the cost of service. The fix seems simple: provide better support for the higher costs in the tiers by connecting them to costs. But the essence of a tiered system has nothing to do with costs.”

This is a different issue than what emerges in the Davis case.  In fact, the very idea behind the CBFR rate structure is to find a better way to measure the impact of water usage on capacity.

As City Attorney Harriet Steiner explained, “We do not build a water system based on gallon by gallon. We build a water system so that in August when you turn on your tap you get water.

“And so we build a water system based on two factors: capacity demands on the system and usage. And so between those two, there are both costs that go to capacity. If you have a house and you have a meter or you have a business and you have a meter, you have the capacity. And we build for that capacity.”

At the same time, the argument made by YRAPUS (Yolo Ratepayers for Affordable Public Utility Services) Attorneys Jon Morse and Michael Harrington is that the disproportionality is at the lower end of the usage, rather than the upper end of the usage.

As Mr. Morse argued, “Under Proposition 218 there’s a requirement that the revenues that they collect from these fees can’t exceed the cost of providing the services. We are not here challenging the way they calculated the costs; that’s for another forum and another time. However, we are challenging whether these fees are proportional.”

He argued, “Arguably the system of setting rates fixed fees by meter size fails Proposition 218’s proportionality test by requiring low water use customers to pay fixed costs for water they have the theoretical potential to use but do not have the actual capacity to use while giving those customers who have a larger share of the water infrastructure based on meter size an incentive to do so.”

Mr. Morse made it clear that his argument is not “in order for there to be proportional costs, everyone has to pay the same per ccf,” but rather that “it’s totally out of whack to hit everybody with a huge fixed rate when there is such a discrepancy, such a diversity, in how much water they use.”

As the Vanguard demonstrated last year, CBFR greatly reduces that disproportionality in the per ccf charge for water, but the plaintiffs here argue that this is not enough.

This is a very different argument, from our perspective, than the one put forward in San Juan Capistrano.  Judge Maguire may indeed invalidate these rates based on the above argument.  The only thing that the San Juan Capistrano ruling shows is that a Superior Court judge may make rulings that upend long-standing policies.

If Judge Maguire ends up invalidating the Bartle Wells rates, that will likely impact municipalities up and down the state that rely on similar rate structures.

There is also a clear tension in the law, as the Orange County Register noted, between Prop 218’s proportionality requirements and conservation requirements, particularly in a time of impending drought.

—David M. Greenwald reporting


About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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28 thoughts on “Holding Pattern: Petitioners Not Ready to Turn in Water Initiative Signatures”

  1. Mr. Toad

    “Like many cities, San Juan’s tiered water rate structure is not designed to accurately reflect cost of service, but to discourage high-volume water use and encourage conservation by charging more to rate payers for excessive use. This is social policy, not cost recovery.”

    Would this apply to charging more for bigger trash bins because encouraging conservation was explicitly stated as justification for our new tiered trash rates?

    1. Davis Progressive

      if you read the case law, there is no problem with having a conservation motivation, but the cost itself has to reflect the cost of service analysis. capistrano didn’t, it will be interesting to see if davis’ does – that’s what the city claims. the opponent claim that the city just threw documents at them.

      1. John Baldry

        if you read the case law, there is no problem with having a conservation motivation, but the cost itself has to reflect the cost of service analysis. capistrano didn’t

        The way California Water Law is constructed, the cost of programs that incent water conservation are considered to be a valid cost for the purpose of establishing compliance with the proportionality provisions of Prop 218. At one point in time San Juan Capistrano’s rate structure complied with those provisions, but over the years they simply passed on percentage price increases that had no underlying cost proportionality rationale.

        In short, San Jan Capistrano didn’t pay attention to what it was doing, and got way off course, and as aresult ended up in a final destination that was not the one they had mapped out at the start of the journey.

  2. growth issue

    Are they not ready because they don’t have enough signatures or are they just holding off for now for whatever reasons? I thought they had plenty of signatures already.

  3. Michael Harrington

    I have always said “soon.” We will file the signatures “soon” and we expect it to qualify “soon” and we expect to see it on the ballot “soon” and we hope to win the repeal “not soon enough.”

    1. John Baldry

      We expect to see it on the ballot “soon”

      Yes, but if you don’t file soon, the election won’t be until November.

      At Tuesday’s City Council meeting the Mayor asked the City Manager about the date when Council would need to authorize the placement of a Tax Measure on the June Ballot. The answer from both the City manager and the City Attorney was, “The January 28th Council Meeting is the last Council meeting when you can do that.”

      It appears that if the initiative backers want to get their water rates initiative on the June Ballot, then they too will need to have Council act on or before January 28th. If that is the case, then Mr. Harrington’s “soon” is very soon indeed. Ten days and counting to be exact.

  4. Ryan Kelly

    I would stop covering this story until something really happens – a decision is made by the Court or signatures have actually been turned in. Otherwise, it just looks like it is just promotion for the signature gathering campaign. No more “happening soon” stories, please, from this group. This seems to be a campaign strategy of theirs.

    1. David Greenwald Post author

      i was expecting the signatures turned in this week, so i figured I should explain that they won’t be. Most of the article had to do with a comment in the Dunning column about San Juan, but it doesn’t seem to apply from what I can read.

      “Otherwise, it just looks like it is just promoti”on for the signature gathering campaign.”

      I don’t care if it does or doesn’t.

    1. John Baldry

      Mr. Harrington, how much time does it take from the point where you file the signatures to the point where the Council makes its formal decision to put your initiative on the ballot?

    2. hpierce

      I’m thinking, if you get a ruling from the judge, invalidating the rates, you won’t need the ballot measure, saving the costs of the elections. Might torpedo the project, good for at least some of the proponents of the initiative. Very civic-minded of all.

      If the judge upholds the rates “soon”, you can still push for the vote, and delays for resolution could still torpedo the project. Still works for some of the initiative proponents, but the downside is the City would incur costs of the election.

      Masterful. Brilliant. Hat’s off to you all.

  5. Mr. Toad

    Perhaps they don’t want it on the June ballot. Since they have tried to obstruct the water project at every turn delaying another election until November might be part of their strategy.

    1. John Baldry

      Mr. Toad, do you really think that the initiative will actually obstruct the water project at all? I don’t. I don’t think it will obstruct it if the vote is in June. I don’t think it will obstruct it if the vote is in November. I don’t think it will obstruct it if the vote is in any of the other ten months of the year.

        1. John Baldry

          I disagree. The cost of the City’s borrowing to fund the water project will escalate during any period of uncertainty, but the water project itself will not be under any serious jeopardy. Further the actual vote on the initiative when and if it ever happens will produce a resounding validation of the prior Measure I vote.

          1. John Baldry

            Do you have any doubts that the Davis voters will reaffirm their Measure I vote? I certainly don’t. Why wouldn’t they reaffirm it?

    2. hpierce

      See my comment, above. Yeah, strategic placement of the torpedo on the project. This suit is obviously NOT about the rates, for many of the initiative supporters (not all). The project is the underlying issue, and anyone who opposes it may find many ways to de-rail it, yet the project had an affirmative vote.

          1. John Baldry

            It will. The eight point margin of 54-46 of Measure I will rise to at least an 18 point margin of 59-41.

          2. Mr. Toad

            I agree and hopefully we are correct about the voters tiring of the obstruction but voters can be fickle. Monday will be the 20th. If they have until the 28th they are going to need to turn in lots of signatures to have enough verified in a short enough time period to qualify for a June vote. They may have that many signatures they seem to have a low threshold to qualify but we will see when they turn them in and how the verification process goes.

            Meanwhile, Woodland just borrowed money for the water project at 1.5%. Every additional percent we are forced to pay on $100,000,000 will cost us a million dollars a year in debt service. Davis is trying to to mitigate the damage by using bridge funding and only borrowing enough to fund current obligations until this is settled but at the end of the day this obstruction is going to cost us real money. Harrington likes to talk about how much scaling back the project has saved us but when confronted about how much its costing us now about the obstruction he claimed in August on this very blog that he is not concerned about the money. His inconsistency reveals his true motivation to be to try to kill the project through obstruction. In any campaign the proponents should use the argument about how much more debt service we are paying because of continued obstruction to drive a wedge between those concerned about costs and those concerned about development. I believe voter fatigue and the fact that the opponents are no longer aligned with those concerned about costs will increase the vote margin in favor of the project. In the meantime obstruction and delay are the rules of the day.

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