Politics & Government

SJC Water Rates Violate State Constitution, Judge Rules

The city must redo its water fee structure, court says in response to a citizens' group lawsuit.

San Juan Capistrano's water rates violate state law and must be completely overhauled, an Orange County Superior Court judge ruled Wednesday.

Responding to a lawsuit filed a year ago by the Capistrano Taxpayers Association, Judge Gregory Munoz said the city's 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."

He said the rates also violate 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. 

The judge's ruling was a major win for the Capistrano Taxpayers Association, which sued the city in late August 2012, claiming its tiered water rates were really a tax and therefore needed a two-thirds vote of approval from residents.

Find out what's happening in San Juan Capistranowith free, real-time updates from Patch.

Munoz basically agreed, saying "the City failed to carry its burden of establishing credible evidence that the rate increases were proportional to the costs of providing water services to its customers."

"We’re obviously pleased with the Judge’s decision and very happy that he was able to get to the heart of the question posed by our lawsuit," Jim Reardon, a representative for CTA told Patch. 

The judge said he could find no specific financial data in the administrative record to support such sizable rate increases, which were approved in February 2010 after a water rate study. 

The lawsuit also said the city shouldn't have charged some customers for recycled water use and delivery because they didn't have access to recycled water. Munoz agreed on that point too.

So what does it mean for ratepayers?

"What this means to water users in San Juan Capistrano is that the city must cease in its efforts at social engineering as expressed by their water rates," Reardon said. 

"Henceforth, the city will have to show that there is a relationship between their cost to provide water and the fee they charge for it.  Penalty rates and subsidy of one type of service another, such as recycled water, will have to be eliminated."

Patch editor Penny Arévalo contributed to this story. 



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