City of Palmdale v. Palmdale Water District
198 Cal. App. 4th 926
| Cal. Ct. App. | 2011Background
- PWD adopted a new water rate structure in 2009 and sought to bond for capital, prompting City challenges under Prop 218.
- Trial court upheld PWD’s rates; City appealed, arguing rates violate Prop 218 proportionality and related requirements.
- PWD’s rate study proposed fixed charges plus commodity charges with tiers tied to a water budget allocation.
- Board initially favored COS, but chose FV option with 60% fixed costs and 40% variable costs; public hearings were held.
- Irrigation users face higher tier costs (Tier 5) sooner than other users, raising concerns about proportionality across user classes.
- This court independent review reverses, holding PWD failed to prove the rate structure complies with Prop 218.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the rate structure complies with Prop 218 proportionality | City contends rates exceed proportional cost for many parcels. | PWD asserts structure ties to budget allocations and uses tiers to incentivize conservation. | Proportionality not proven; judgment reversed. |
| Whether irrigation tier structure is unlawful discrimination under Prop 218 | City argues irrigation users pay disproportionately higher costs without justification. | PWD maintains allocation-based pricing and tiering are permissible to promote conservation. | Insufficient showing of proportional cost; FV/COS tradeoffs not demonstrated as compliant. |
| Whether PWD bore the burden to prove compliance under Prop 218 | City emphasizes burden on agency to prove compliance with article XIII D. | PWD relied on adopted methodology and statutory framework to justify rates. | Agency burden not satisfied; independent judgment required to assess compliance. |
Key Cases Cited
- Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority, 44 Cal.4th 431 (Cal. 2008) (independent review under Prop. 218 and strict enforcement of proportionality)
- Howard Jarvis Taxpayers’ Assn. v. City of Roseville, 97 Cal.App.4th 637 (Cal. App. 2002) (Prop. 218 context and constitutional mandate briefing)
- Bighorn-Desert View Water Agency v. Verjil, 39 Cal.4th 205 (Cal. 2006) (waters charges as property-related; qualification of fees and charges under Prop. 218)
- Deetz v. Carter, 232 Cal.App.2d 851 (Cal. App. 1965) (domestic water use policy context within conventional statutory interpretation)