Will City Agree to Settle Water Lawsuit?

lawsuitThe Vanguard learned that the city and plaintiffs for the water suit – John Munn and YRAPUS (Yolo Ratepayers for Affordable Public Utility Services) had collectively requested that the court establish a confidential settlement communication process and refer the matter to a confidential mediation with a neutral mediator.

Last month the Davis City Council approved an 87-13 water rate process and a Prop 218 protest ballot was mailed on Thursday. Earlier this year, Yolo County Superior Court Judge Dan Maguire had ruled that the water rates that were previously in effect met constitutional standards of fairness and proportionality under Prop 218.

However, that was only part of case against the city. In July of 2013, the city had moved to bifurcate the water rate portion of the lawsuit, allowing for the financing of bonds.

Michael Harrington, the attorney representing YRAPUS, and John Munn issued a statement: “Members of YRAPUS look forward to fully exploring settlement options in the context of a formal confidential mediation process.  We appreciate the leadership exhibited by Mayor Dan Wolk, his colleagues, and City Attorney Harriet Steiner in securing the City Council’s appointment of a settlement subcommittee and establishing this early mediation process.”

He added, “The Members of YRAPUS are pleased that their efforts have saved over $135 million in ratepayer costs, and hope to continue serving the public’s interests.”

In the stipulation order issued on July 31, 2014, it states that the parties stipulate as follows:

First, “Given the rapid approach of the November 2014 bench trial on the remaining causes of action in this action, the Parties, together with their respective attorneys and representatives, believe that a confidential settlement communication process and confidential mediation before a neutral mediator pursuant to Evidence Code sections 1115-1128 would have the best chance of promoting free communication among the parties and facilitate resolution of their disputes.”

Second, “The Parties agree and stipulate that all communications, negotiations, or settlement discussions by and between participants in the course of a mediation shall remain confidential…” The communications would be subject to review only by the parties themselves, and would not be released to, shared, or viewed by any third party.

Third, “Plaintiffs understand that any settlement tentatively reached in the course of mediation is subject to approval by the City Council and that any settlement agreement reached will be a public record subject to disclosure and will not be kept confidential.”

Mediation would take place as soon as possible and is currently scheduled for August 21, 2014.

The statement is signed by Michael Harrington, the plaintiffs’ attorney, and Harriet Steiner for the city. Judge Maguire has stamped the proposed order.

In July of 2013, Harriet Steiner, the city attorney, argued in a brief that “bifurcation of this action will result in a more efficient resolution of this litigation, preserve judicial resources, and minimize undue prejudice to the City.”

The plaintiffs at that time opposed the bifurcation, arguing that the “city is requesting that the damages portion of this action be tried first, before the liability portion is resolved.”

In his response, Mr. Harrington argued, “The requested relief, if granted, would do nothing to further judicial efficiency. Moreover, such relief would severely prejudice the rights of Plaintiffs by depriving them of the right to make a complete presentation with cross examination of witnesses.”

He adds, “The City is attempting to have the issues decided on an incomplete administrative record based on documents of the City’s selection.”

In late January of 2013, the group, represented locally by attorney Michael Harrington, filed a suit that claims, “The Current Water Rates violate Proposition 218 and are unconstitutional and illegal in that, inter alia, they impose a fee or charge incidental to property ownership which exceeds the proportional cost of the services attributable to the parcel. The City knows this, and staff and/or paid city water consultants acknowledged such constitutional deficiencies at various meetings of the City Water Advisory Committee.”

The suit continues, “Plaintiff contends that Current Water Rates are in violation of Proposition 218 and therefore unconstitutional and illegal. The City disputes this contention.”

A year later, in January 2014, Judge Maguire ruled that the water rates met constitutional standards.

Judge Maguire wrote at the time, “The present lawsuit was filed on March 22, 2013, and it includes multiple causes of action, but the only causes of actions at issue now are the second cause of action (declaratory relief regarding the Bartle Wells rates), the third cause of action (declaratory relief regarding the CBFR rates), the fourth case action (mandamus for both water rate structures), the eighth cause of action (declaratory relief for sewer rates), and the ninth cause of action (mandamus for sewer rates).”

The remainder of the causes of action have yet to be determined.

In his final ruling in March, Judge Maguire wrote, “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.”

However, that was not the end of that issue. A group of citizens would then put the water rates to a vote of the people and in June, 2014, Measure P narrowly passed.

In early July, the city passed new water rates. Upon their passage, Mayor Pro Tem Dan Wolk stated, “I think I have been motivated on two things. One is finding a fair and viable rate structure and the second is honestly trying to find a global solution to this water issue. I feel that an adoption of a rate structure 60-40 does not address really either of those. It doesn’t appease a large group of our community and I think there is a real fairness issue about that 40-60 rate.”

While the plaintiffs have never formally made a statement about the current rates, Don Price, who was among the plaintiffs, noted during public comment that the fear of legal action was a red herring.

He explained, “The only reason that the council has been plagued with legal action this past year is that people didn’t like the experimental rates that the city council voted for before. I can’t imagine anyone bringing any kind of legal action or challenge to an 87-13 rate.”

Settling YRAPUS’s suit, however, is the first step toward bringing the entire water rate process to a close.

—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. Alan Miller

    What is the issue surrounding the sewer rates? I’ll tell you my issue around the sewer rates: they are a lookback on water rates! The people of the City have made it very clear they hate lookbacks. So wake up everyone, our sewer rates are a lookback, and that should be abolished. We already pay in arrears for what may be someone else’s water use because of this. YARPUS you are working on this, eh?

    1. Anon

      Your sewer rates are based on winter usage for good reason. You use less water in the winter, because most people do not irrigate then. The idea is to “estimate” how much water you will use in the winter as a basis of how much of it is flushed/drained into the sewer system.

      1. Alan Miller

        I know what the “idea” is, Anonymouse. And it is a lookback and an estimate and you can end up in at least two ways paying for other people’s water use. It’s an estimate, and that’s all it is. Other cities have other structures for sewer that are perfeclty legitimate.

        1. John

          Alan, one alternative to the current method would be to pay for sewer services by the number of residents. Would you feel that reporting the number of residents in each household to the City would be intrusive?

          1. Alan Miller

            That’s a trap. That’s ONE alternative. The number of residents in a unit changes so much seasonally and year to year that such a method would be insane.

            Right now one pays if their neighbor on the same bill waters their sidewalk or the toilet gets stuck while they are away for the weekend, or if you move into a house where someone had pot farm in the attic as the previous tenant.

          2. Alan Miller

            And by pay I mean pay for the whole damn year for what someone else did. That’s the problem with lookbacks.

          3. John

            Alan, if that is a trap, what isn’t a trap? What method would you use to bill that would equitably spread the costs to the users?

          4. Mark West


            When was the last time you moved?

            The only downside with ‘look backs’ is if you were not the one who used the water during the ‘look back’ period. If this doesn’t describe you, then you really have no reason to whine about it. The City could deal with this problem with an exception process, which would not be that difficult to implement.

          5. Davis Progressive

            if you were the not the one who used the water and it varied substantially from what you use. how likely is that?

      2. South of Davis

        Anon wrote:

        > You use less water in the winter, because most people do not irrigate then.

        Most people kept their sprinklers on all year in the past (drought) year also most people wash their cars more in the winter (a single trip to Tahoe in the winter will get more dirt on a car than driving around Davis for three months in the summer)…

        1. John

          The question that your post brings to mind is what effect the additional irrigation water usage in the Winter months has on the City’s wastewater revenues. If the amount of winter irrigation water is equal to the amount of indoor use water, does that mean that the sewer bills are twice as high as they would be in a normal irrigation-less Winter?

  2. Anon

    How exactly did YRAPUS save $135 million in ratepayer costs? Harriet Steiner said, as described in the Davis Enterprise, “setting aside who saved whom what money”. I doubt that she or anyone other than the plaintiffs would agree with Michael Harrington’s statement that his suit somehow saved ratepayers $135 million.

  3. Ryan Kelly

    The sewer rates and how they are set is not the issue being discussed in the settlement.

    The Davis Enterprise:
    “These are principally sections pertaining to the city using water and sewer services without paying for them, plaintiffs say, according to an email from Michael Harrington, a local lawyer, former City Councilman and co-counsel for the plaintiffs.”

    What I understand is that the City doesn’t charge the Water District for use of its public land and the Water district wasn’t charging the City for use of the water. This has been changing, with the City working to place meters on water for public parks. This is why they are suing us.

  4. hpierce

    In the interest of government transparency, we should tell the city to refuse the confidential nature of the negotiatons, even if that means going to trial.

  5. Michael Harrington

    Staff agree, actually. Pretty much the same local concerned citizens repealed the horrible rates and halted the project in the fall 2011 using the referendum process, then the City “suddenly” discovered that the project was way too large for Davis, and made it smaller, and looked for other cost savings to try and sell it to the voters. It’s all one process: Fall 2011 referendum, WAC, Measure I, Measure P, the water rate case. Mostly same people on our side, and the same City. THe $135 million figure was from staff about a year ago, and I suspect there are even more savings now. Also, the CBFR rate structure was going to kill greenery in Davis, and it was horribly unfair. So yes, the $135 million figure is from staff, and it’s too low, and it omits other huge benefits our team has brought to Davis and its ratepayers.

  6. Michael Harrington

    Alan: the Yes on P Committee eliminated the lookbacks. Your comments are exactly correct, and reflect the situation that greatly concerned me and my colleagues.

    1. Alan Miller

      I know. If you feel like taking on the sewer-water lookback, I believe the public would not be too thrilled about that either as it is also a lookback. By “would” I mean if it was in their collective conscious mind. As with every else, people are more concerned about what isn’t than what is. Like chlorine gas or ethenol tank cars that already pass through Davis (“is” a threat but not on public’s mind), but oil that “isn’t” yet is on the front burner. Pardon the pun.

  7. Michael Harrington

    One more thing: anyone remember Rancho Seco Nuclear Power Plant, and how SMUD shut it down after a public vote? It was a white elephant that glowed in the dark.

    Give it a few years, and I seriously think that Davis will pull out of the JPA surface water plant as being a worthless dinosaur that is costing ratepayers too much for too little. With climate change accelerating, there will be less and less summer water available from the Sacramento River. The project was sold to the public as a solution for summer water demand. So give it five years, and maybe someone will run a shut down initiative, and a one time charge to ratepayers to buy our way out of the JPA debacle.

    1. Davis Progressive

      highly unlikely that the city will pull out of the surface water project. that’s a smoking red herring argument if i have ever seen one.

  8. Ryan Kelly

    The Yes on P committee didn’t save the community money. The Yes on P committee didn’t eliminate anything. The only solution or recommendation offered by the Committee was to shut the whole project down, which was to cost us dearly.

    Drop the lawsuit, Mike. Or agree to having the settlement conversations open to the media and public.

  9. Michael Harrington

    John: large public utility projects. R.S. was viewed as too expensive, and no solutions in sight, and the future looked negative to the public’s interests.

    With climate change, and the near certainty that the Sierra snow pack will melt much earlier than the usual mid summer, and the Sacramento River is going to be low during future summers, and our summer water rights are very junior and pretty much worthless, the surface water plant will probably be viewed in a few years like Rancho Seco was.

    Anyway, whatever.

  10. Ryan Kelly

    MH, You are still attempting to convince people that the water project be abandoned. We are past that. We are now talking about how to end your lawsuit.

  11. Michael Harrington

    Ryan, yes, we are talking about all things water. And my prediction, maybe wildly off, is that the JPA water plant will go the way of Rancho Seco in 5-10 years. I dont have a crystal ball, and neither do you. But I have time in the saddle concerning local issues, and over time I have mostly found that my predictions are borne out. We shall see, and you dont need to belittle or make me wrong.

  12. DavisBurns

    Michael Harrington, I agree we are very junior in our rights to Sacramento River water and we are likely to have decreased snow pack in the sierras but I support the water project. We are using our ground water faster than it is being replenished. We keep digging deeper wells. What I think few people consider is that snow pack is our water storage system and when that disappears we are in real trouble. When that happens, we will not have adequate water to maintain our current population in California especially places like Los Angeles which doesn’t have nearby soirces of water and relies on water from Northern California.

    1. Davis Progressive

      you’re agreeing with him on points that have little basis in fact. the city purchased access to the conway folks who have a senior summer water right.

  13. Michael Harrington

    Conway does not provide even close to what our summer water needs are. And even those water rights are too junior to do us much good.

    It’s all pretty much horrible for the ratepayers.

    1. Mr. Toad

      Only in a drought are our water rights seniority a problem. Now if you know that California is going to be in perpetual drought what you are saying might be true but you don’t know that with any certainty. In fact the best minds on the topic can’t tell you whether global warming will result in a wetter or drier future for California. Also my understanding is the water from the river can be used during other seasons to recharge our ground water reducing our need for river water during a drought.

  14. Anon

    Sigh. Voters want the surface water project – hence they voted in favor of Measure I. The majority understand we cannot continue relying on groundwater. If we do, subsidence will occur, and contaminants will leak into the deep aquifer. It is already beginning to happen. All water experts agree. Federal regulations require that the water we dump out from our wastewater treatment plant be devoid of certain contaminants that cannot be removed other than to bring surface water into the system or seriously damage the intermediate and deep aquifers. To refuse to join the surface water project could result in fines from the state as much as if we had built our share of the surface water project. It is time to settle this matter, out in the open, and be done with it, assuming no money finds its way to the plaintiffs from the city. Otherwise the matter should be settled in court. The lawsuit has done nothing other than cost the city and citizens enormous amounts of money to no good purpose.

  15. Mr. Toad

    Mike Harrington had one cause of action that he prevailed on. A settlement probably means a nice payday for Harrington courtesy of the taxpayers of Davis. Harrington likes to talk about how much he supposedly saved the city. I wonder how much he will make for himself?

  16. DavisVoter

    I tried to post earlier that I hope the YRAPUS people will consider a new name if they continue their organization’s existence. Not sure what happened. I don’t think my comment was inappropriate, but just in case it was deleted, I will try to rephrase it.

    “YRAPUS” (for those who’ve never tried to decipher a personaliized license plate, I’ll spell it out: “Why Rape Us?”) seems to compare paying higher water rates to rape. I would venture to suggest that that is not an appropriate comparison.

  17. Pingback: Will City Agree to Settle Water Lawsuit? | wate...

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