Key Water Issue Emerges: Is Proportionality Requirement by Parcel or Class?

water-rate-iconIn January, Yolo County Judge Dan Maguire denied the claims of the Yolo Ratepayers for Affordable Public Utility Services (YRAPUS).  He wrote, “The water and sewer rates adopted by the City of Davis meet the proportionality standards of the California Constitution, and therefore plaintiffs’ claims are denied.”

However, that ruling was tentative and the parties had 15 days to comment and make objections.  After receiving and considering the parties’ responses, the Court will enter a final Statement of Decision and Order.

On February 6, the plaintiffs submitted their response and based on that Judge Maguire ordered the city to submit a written response by February 25.

The issue that will decide this is clear, and it came out during the original arguments: is the test for proportionality based on a parcel by parcel basis as the plaintiffs in this case argue that the statute states – as Judge Maguire during arguments in December seemed to acknowledge – or is the city right in the case law they cite that indicates that proportionality must be class by class?

The plaintiffs argued that the court’s ruling that “proportionality may be established by ‘grouping similar users together’ and then charging members of the group according to their usage” – “is inconsistent with Proposition 218.”

They argue, “Proposition 218 clearly and unequivocally requires a parcel by parcel analysis and not a class by class analysis of the costs to be charged to a property owner.”

The plaintiffs note that the court cites two decisions which in essence rule “that Proposition 218 does not mean what it says.”

They argue, “Plaintiffs do not accept the idea that a Court of Appeal can so cavalierly ignore the plain words of a constitutional provision or that the two cases cited actually support the conclusion that one can ignore the literal mandate not to impose upon any person or parcel more than the proportional cost of service attributable to the parcel.”

They add, “A close reading of the two cases cited by the Court in this case shows that neither actually supports a construction which would justify ignoring the plain words of the constitutional provision at issue.”

As we noted above, during oral arguments in December, Judge Maguire himself would note the discrepancy between case law and the plain language of Prop 218.  In the question as to what the relevant level of comparison was – person by person, parcel by parcel, or class by class, Judge Maguire would note, in response to the city’s argument in favor of a class by class comparison, “I understand that argument. I understand the case support for it, and there is case support for it.”

He would add, “What I’m struggling with though is how to square that concept with the language of Section 6 which says, ‘The charge shall not exceed the proportional cost of the service attributable to the parcel.’ So that seems to suggest a more granular analysis than class by class.”

In reconciling that issue, he wrote that the language of Proposition 218 would appear “at first blush” to require the city to demonstrate on a per-parcel basis, that the rates are “proportional to the costs for that parcel.”  However, “The Court of Appeal, which this Court must follow, 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.’”

The city in their response brief argues, “As this Court recognized in the Tentative Decision, “the Court of Appeal, which this Court must follow, has rejected” an interpretation of Section 6(b)(3)’s proportionality requirement for property-related fees, like those at issue, which would require a parcel-by-parcel analysis.”

The city cites case law that they say “squarely rejected any reading of Section 6 that requires a parcel-by-parcel proportionality analysis.”  Citing an appellate court decision in Griffith v. Pajaro Valley Water Management Agency from the fourth appellate district in 2013, the court there wrote, “The question of proportionality is not measured on an individual basis. Rather, it is measured collectively considering all rate payers.”

Harriet Steiner argues, “This court may not ignore such controlling authority.”

She adds, “More importantly, neither Griffith nor this Court’s Tentative Decision in favor of the City are contrary to the plain text of Proposition 218’s proportionality requirement.”

Here, she notes, the proportionality requirement states that the “amount of a 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.”

She argues, “The City’s rate classes are readily squared with this requirement because the City, after determining its costs of service, analyzed water consumption data, as well as number of customers, customer service, and equivalent meter size amongst customers, which takes into account the characteristics of the parcel being served.”

She continues, “Development of these classes and corresponding rates takes into account the parcel being served. Such parcel characteristics include the type of use on a particular parcel (e.g., single family residential, commercial, multi-family residential) and also the size of the water meter to determine the appropriate rate for that parcel.”

“As explained more fully in the City’s Opposition Brief, the customer class is pertinent to determining how to apportion costs of service amongst parcels with similar characteristics. Customers with similar peaking and usage characteristic were grouped together because customer use correlates to the parcel use and water meter size serving the customer’s parcel.”

The plaintiffs in their most recent response argue that the Griffith decision “simply does not say what the City would have it say, and if it does, it is inconsistent with the plain language of Proposition 218.”

After showing examples from the Griffith decision to demonstrate their point, they note, “Prop 218 uses the word parcel, not class, and the City’s attempt to restrict this Court from considering the proportionality at the parcel, or ‘granular’ level, basically reads out or eliminates the word ‘parcel’ from Prop 218, and substitutes in the word ‘class.’”

“Plaintiffs are not suggesting that mathematical precision be applied to meet the proportionality requirement,” the plaintiffs argue. “However, the distribution of costs among the parcels must at least be reasonable, and this Court must let its opinion and conclusion be governed by Prop 218’s clearly written requirement that parcel means parcel, and no parcel shall be required to pay more than the costs of providing water to that parcel. The ‘class by class’ analysis used by this Court in its Tentative Decision abdicates independent judicial authority to the City, allows the vote of a City Council to change the application of a constitutional amendment, and lets the public agency chose how to label its classes and which subgroups of ratepayers should be in a particular class.”

How Judge Maguire ultimately sorts out the issue at hand will go a long way toward determining the future of the city’s surface water project.

—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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18 Comments

  1. Reallchangz

    This is all very interesting, however, as case law and interpretations become more granular – at some point the question will arise at the macro level as to what classes, or categories or parcel types is/are most responsible for the most water consumed in the state and have/has the greatest impacts on our water infrastructure maintenance costs and our water discharge impacts on the environment. Something to keep in mind as we spend more time exploring the more granular aspects of this conversation.

    1. Matt Williams

      Although it is outside the scope of Proposition 218, that is a very important question. A really good snapshot is to look at the percentage of the water in the proposed BDCP Twin Tunnels that will go to agriculture vs. go to human consumption.

      1. Nancy Price

        We don’t really know that percentage yet!!!!!!

        Furthermore, we do not know how much will go to fracking, though the industry says it is developing ways to re-use the fracked water. But re-use is not the only issue. It is the great danger and probabiility , already demonstrated, that fracking causes contamination of goundwater aquifers as well therefore reduces the amount of fresh water available without costly, at the public expense, of processing for household and other uses.

        One more example of the externalizing of costs at public expense. We don’t need fracking and waster water.

        Join The Global Climate Convergence: People, Planet and Peace over Profit at http://www.globalclimateconvergence.org

        1. Frankly

          Off topic.

          Fracking does more to help the poor and middle class and ensure US safety from the global ills of sending billions to hostile medieval tribal cultures that want to kill all people that are not Islamic fundamentalists.

          Liberals have gone off the rails on the subject of fracking. It, more than just about anything else today, demonstrates that care of other people and the country in general, is secondary to their demands to force the world to be transformed into their ideological views. The end justifies the means. it has been the same view that every tyrannical dictator and collectivist has used before.

          So let me ask you this… if we outlaw fracking like liberals would prefer, then how do you propose low income people will pay for their energy that would double or triple in price… especially for heating?

          And note too that the cost of electricity would skyrocket as our President and his tyrannical EPA agency has shut down coal mining and coal-fired electricity plants and they have been and are being replaced with much cleaner-burning natural gas derived from fracking.

          The industry is reusing water today. There are areas where frack drilling does not have access to water and so they have to truck it in and they are using containment and reuse technology.

          1. DavisBurns

            Stanford professor Mark Z Jacobson has a plan to provide all US energy needs with wind water and solar. They have a detailed plan for California and New York State. It includes transportation. We have the technology it is a political and social problem. The barriers are the lack of leadership and of course the fossil fuel industry who won’t go gently into that food night.

      2. Realchangz

        Matt,

        Perhaps the issue is better framed in terms of the disparate financial burdens associated with consumption and post consumption waste water management obligations expected to be borne by the different categories of user groups as between urban and agricultural.

        At some very real level, it seems we are talking about who should be expected to shoulder how much of the financial burden in order to meet the requirements of the mandates.

        If the urban consumption pattern is expected and required to shoulder a quality of discharge burden that is both more rigorous and more expensive and of less cumulative environmental impact (owing to the disparity of volumes involved) than for the agricultural class of user – how is that equation to be determined?

    2. Don Shor

      From Wikipedia: “About 80-85% of all developed water in California is used for agricultural purposes. This water irrigates almost 29 million acres (120,000 km2), which grows 350 different crops.[8] Urban users consume 10% of the water, or around 8,700,000 acre feet (10.7 km3).[9] Industry receives the remnant of the water supply.”
      The Delta proposal for conveyance tunnels isn’t intended to change the proportions of that water usage, nor is it intended to increase the total water supply to any one of the interest groups. From the start of the CalFed process in the early 1990’s, the main interest groups (ag, metropolitan, industry, fisheries, environmental, and Delta property owners) have been at the table. The one group among those that is isolating itself is the last one. It is also the weakest in terms of influence.

      Agricultural property owners are dealing with water discharge impacts, especially those who drain in the Delta region.

      1. Nancy Price

        Ag is going to have to conserve much more and even transition to less intensive water use crops. We are exporting a huge amount of virtual water in crops that are being grown in regions that need so much irrigation. That actually is a huge transfer of water to the importing country as well as the carbon footprint for transport.

      2. Frankly

        Yet – Don thinks we need to support extreme farm land preservation. His quote “we have plenty of water.”

        There is a lot of new exciting technology being developed and it is about ready for production in the area of the use of super-absorbent polymers to retain water in the soil.

        Again, technology will save the day as long as those enemies of the pursuit of profit do not prevail.

        1. Don Shor

          Yet – Don thinks we need to support extreme farm land preservation. His quote “we have plenty of water.”

          Yolo and Solano Counties have plenty of water. My support for farmland preservation is not extreme.
          Polymers are not going to be widely applied in row crop or orchard production here. I have been quite familiar with the use of polymers in our industry and in ag for decades. It’s nothing now, but it isn’t relevant or cost-effective in a place where we have abundant water. Which we do.

    3. David Greenwald

      One of the things I was told, but never really saw the argument explicitly made is that some of the cases the city is citing are appellate districts that actually have no authority over the local court. So that needs to be sorted out in terms of which case law applies.

  2. Davis Progressive

    this is a very strong pushback by harrington and company. it won’t sway maguire, but it might carry water on appeal. i hope the plaintiffs are prepared to appeal because reading through the list of caselaw, it’s all based on appelate rulings not trial court rulings.

  3. Frankly

    How the Other California Lives

    Some of the most productive farm land in the world is going fallow thanks to a man-made water shortage. A long-time grower explains.

    Just ask Mark Watte, a second-generation dairyman and nut grower from rural Tulare, who doesn’t mince words. “Everywhere you turn, they are coming at us with this nonsensical b.s.!” he says. Who are “they”? Environmentalists, though the beleaguered California farmer cautions against using that word: “Most of them don’t really care about the environment. They are obstructionists.”

    Ironic… environmentalists demand that we preserve farmland, and then work to prevent water from going to farmland.

    http://online.wsj.com/news/articles/SB10001424052702303775504579396093119215448?mod=Opinion_newsreel_1

  4. David Greenwald

    “The court held a Pre-Trial Status and Scheduling Hearing on March 7th. The Court set the case for a 6-day bench trial commencing on October 15, 2014. The trial concerns the allegations that the City was improperly using water and sewer services without paying for them. Although it was not brought up at this limited hearing, Plaintiffs report that all briefing has been completed and the Court is expected to issue shortly a final decision on the Plaintiffs’ challenge to the water and sewer rates.”

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