Judge Backs City on Final Water Rate Ruling

lawsuitDespite the lengthy process for re-arguing the water rates case in lieu of Judge Dan Maguire’s January ruling that upheld the constitutionality of the city’s newly implemented water rates, Judge Maguire in his final ruling has allowed his initial ruling to stand.

Once again, Judge Maguire writes, “Having considered all of the evidence and legal arguments provided by the parties, the Court finds that the water and sewer rates adopted by the City of Davis meet the proportionality standards of the California Constitution, and therefore the plaintiffs’ claims are denied.”

The city quickly proclaimed, “This final ruling validates a tentative ruling issued in January of this year.”

The city writes, “The City firmly believed the water and sewer rates were legally valid and the lawsuit was without merit.”

From the city’s perspective, the Surface Water Project and the water rates were determined in a lengthy process by both consultants and approved by the citizen-based Water Advisory Committee.

The citizens of Davis asked for a binding vote on the Surface Water Project. On March 5, 2013, Measure I was narrowly approved allowing the City to move forward on the project. On March 26, 2013, the water rates were approved by the City Council after the legally required Proposition 218 process resulted in less than 11% of the ratepayers protesting.

The city notes, “Proportionality in rates has been upheld because the rates charge different amounts to different groups for valid reasons. The final ruling notes, “…the City has demonstrated a basis for its allocation of costs to the ratepayers.””

Mayor Joe Krovoza stated “Our City Council, acting on the dedicated work of our Water Advisory Committee, took great care to make sure our new rate structures would be in full compliance with the law. The court’s decision affirms our careful work. This means our joint project with Woodland will proceed to bring Davis a clean, environmentally sound, and fiscally responsible long-term surface water supply.”

The Plaintiffs naturally were disappointed in the final ruling, but respectful of the process.

“The Plaintiffs are disappointed by the final decision, but they appreciate the judicial thoughtfulness and hard work reflected in the decision,” Michael Harrington, co-counsel for the plaintiffs, stated in a release.

At the same time, they believe that the court decided wrongly in this matter.

“The Court basically found that its hands are tied by the Griffith decision from another circuit court.  Plaintiffs strongly assert that the Griffith court did not follow the basic rules of statutory construction, and wrongly wrote out the parcel level analysis required by the clear language of Prop 218,” Mr. Harrington argued.

Once again, the case turns on the notion of proportionality at which granular level.

The plaintiffs note, “If Griffith stands, Prop 218 will lose most of its legal force, leaving ratepayers unprotected from public agencies whom manipulate the water rates in favor of certain interest groups, including public agencies, as was done in Davis.”

Judge Maguire notes in his final ruling that the relevant portion of Proposition 218 provides that “[t]he amount of fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.”

He notes, “At first blush, this provision would appear to require the City to show, on a parcel-by-parceI6 basis, that its rates are proportional to the costs for that parcel, since the provision refers to the “proportional cost of the service attributable to the parcel.””

However, “But the Court of Appeal has rejected this interpretation, and found instead that “proportionality is not measured on an individual basis,” but instead is “measured collectively, considering all rate payers.””

Thus, as the city argues, proportionality is established by “grouping similar users together” and “then charging members of the group according to their usage.”

As Judge Maguire, notes “The plaintiffs argue that Griffith is flawed because (1) it misreads prior authority (City of Palmdale vs. Palmdale Water District (2011) 198 Cal.App.4th 926), (2) it impermissibly relies on California Farm Bureau Federation v. State Water Resources Control Board (2011) 51 Cal. 4th 421, a case that did not involve Proposition 218, and, (3) most important of all, it is inconsistent with the plain language of the Constitution.”

Judge Maguire rules that “these arguments fail” because “a trial court must follow applicable decisions of higher courts, and in Griffith the Court of Appeal unambiguously rejected parcel-by-parcel analysis.”

“Thus, this Court will follow Griffith’s ruling that agencies need not show proportionality on a parcel-by-parcel basis, but instead may divide users into groups, and divide costs proportionally among those groups,” Judge Maguire writes.  “It is important to note that Proposition 218 requires rates to be proportional to the cost of service, not equal to it, and so the fact that one rate structure is proportional to the cost of service (and thus legal) does not mean that all other rate structures are disproportional to the cost of service (and thus illegal). This is so because “[a)pportionment is not a determination that lends itself to precise calculation,” and so agencies still retain discretion to consider policy matters, such as the need for water conservation,8 in setting rate structures.”

Clearly the plaintiffs believe otherwise here, believing in part that the court has erred in being bound by case law in other appellate districts and in changing the plain language of Prop. 218.

The key question is now whether this decision will be appealed and one of the interesting factors is whether the Howard Jarvis Taxpayer association which authored Prop. 218 will now engage in a fight to in effect save it.

From Judge Maguire’s perspective, “The Court’s duty is to determine whether the rates are constitutional, and it is for the City’s elected policymakers to determine if they are fair and promote good public policy. The increased water rates will undoubtedly burden many Davis residents who are already struggling to pay their bills, but the elected City Council members and voters themselves, not the Court, must balance that burden against the need to address the declining quality of the City’s water supply.”

—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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  1. Day Man

    I know there’s a lot that makes it hard to compare these two situations, but the concurrent stories of the water rates appeal and the school board fiasco present a striking contrast. This (water rates appeal) is what a disagreement looks like when handled by respectful professionals. That (school board fiasco) is what a disagreement looks like when handled by those with more passion than reason.

  2. Davis Progressive

    so maguire is essentially arguing that a 4th dca decision is binding on trials courts that are not in the 4th dca? that seems odd. i hope that someone appeals this so atl east we can get clarity on the law.

    1. hpierce

      Depends whether the depends whether the decision is ‘certified/published’ [forget the exact term]… if it was recognized that the appellate court was making a decision on the “law”, rather than the limited facts of a given case, it has to be respected throughout the state, as ‘citable’. Don’t have any idea if this applies in the current matter, but it may well.

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