City Objects to Ruling that Invalidates Water Rates

The city has filed an objection to a judge’s ruling that it unfairly sets water rates.

Earlier this month, an Orange County Superior Court judge said the city's four-tiered water rate structure was "invalid because the fees imposed on each parcel of property exceed the proportional cost of the services attributable to each parcel."

In essence, the city violated Prop. 218, which says water rates must be tied to actual costs. State voters passed the measure in 1996 to change how city governments are financed. A group called the Capistrano Taxpayers Association filed the lawsuit.

In court documents filed this week, attorneys for the city pointed out what they consider to be errors in Judge Gregory Munoz’s ruling.

The attorneys argue that the judge got it wrong because the fees associated with Tiers 2-4 are based on a water rate model prepared by a city consultant, which includes baseline data connecting the fees to costs.

“There is thus a direct chain leading from ‘specific financial cost data’ to each tier of the city’s water rates. The proposed decision errs when it ignores this data,” the city’s attorneys wrote.

The attorneys also complain that the judge ignored their argument that rates charged for Tier 3 and Tier 4 use are actually penalties, not fees at all.

The largest portion of the document argues that the judge has prematurely awarded attorney’s fees and costs to the taxpayers’ group. It says the plaintiffs should prove their costs, and the city should have a right to contest the fees.

The objection, filed in Munoz’s court, is a precursor to an appeal.