Will Prop 218 complicate Water Rate Hikes?


Even with the thunderstorms and rain that swept through Southern California last week, California’s crippling drought is still taking a toll on local communities. Santa Fe Irrigation District (SFID) customers are required to cut water use by 42% compared to 2013 levels and district-wide cuts are aiming for a 36% reduction in water use.

Now many residents are worried that steep increases in water rates might be on the horizon. The SFID has indicated rates are set to increase upon the completion of a cost of service study, which is still in the works.

However, a recent ruling by the California Supreme Court could alter the way water districts charge their customers. On Wednesday, July 22, the CA Supreme Court upheld a lower court’s ruling that San Juan Capistrano’s tiered water rates violated Proposition 218 because they did not meet the constitutional requirement that government fees reflect the actual cost of service.

Still, the court held that tiered structures are legal as long as the water district can provide proof that the rates reflect the cost of service.

Similarly, another lesser-known provision of Prop 218 allows property owners to challenge new charges. According to the CA constitution,

“At the public hearing, the agency shall consider all protests against the proposed fee or charge. If written protests against the proposed fee or charge are presented by a majority of owners of the identified parcels, the agency shall not impose the fee or charge.”

The CA Supreme Court’s ruling could have a big impact on water districts with tiered rates, like the SFID. Currently, over two-thirds of all water districts in California have a tiered rate structure, including the Los Angeles Department of Water and Power.

The verdict struck a chord with state regulators in Sacramento who argued that the tiered rate structures were a valuable tool in water conservation efforts. Governor Brown said the ruling puts “a straitjacket on local government at a time when maximum flexibility is needed.”

The agenda for the SFID’s August 20 meeting has not yet been released, but discussions on the upcoming cost of service study are likely to take place in the coming months.

More information on rates and the cost of service study are available on the Santa Fe Irrigation District’s website at www.sfidwater.org.