Taxpayer Group Sues City over Fees

A local taxpayers’ rights group has sued the city of San Juan Capistrano over the way it charges for water.

Capistrano Taxpayers Association Capistrano Taxpayers Association made good on , vowing to sue unless the city changed its water rate structure.

The lawsuit, filed Wednesday in Orange County Superior Court, alleges the city’s water rates violate the state Constitution and therefore is “invalid and illegal.”

City officials could not be reached for a response.

The lawsuit blames the city’s reliance on an unfair rate structure because it needs to make up for a groundwater recovery plant that is draining the city of millions of dollars. It notes that water rates have increased 105 percent since 2004.

In 2008, the city commissioned a study to recommend rates going forward. It recommended a tiered structure with an aim toward conservation. Previously, the city's utility director, , has said water providers are allowed to encourage conservation through their rates.

Capistrano Taxpayers allege that the city takes more fee money in than it spends on providing the water.

Therefore, “the inequality between the city’s water rate tiers is totally unrelated to ‘the proportional cost of the service attributable to the parcel,’ and therefore violates” the California Constitution, the group’s attorney, San Clemente-based Benjamin Benumof.

While the first tier is set at the actual cost of use, the subsequent tiers increase at arbitrary rates, he wrote. According to the suit:

• Tier 1 is increased by 33.33 percent to calculate Tier 2
• Tier 2 is increased by 50.00 percent to calculate Tier 3
• Tier 3 is increased by 83.33 percent to calculate Tier 4

Because the rate study did not offer any service data, the rate hikes between tiers is “instead derived from an arbitrary mathematical progression,” the lawsuit states.

Besides violating the state constitution, the rates also run afoul of Prop. 218, which voters passed in 1996 to change the way city governments are financed 

“The Proposition 218 ballot pamphlet makes it clear that the voters intended that no property owner’s fee may be greater than the actual cost to provide the service to the owner’s land,” Benumof wrote.

You can read the rest of the lawsuit in the .