Proposed ballot measure could re-establish tiered water pricing

A coalition of groups representing cities, counties and water agencies filed a proposed ballot measure Monday that would allow water providers to reestablish so-called tiered pricing as a means of encouraging conservation.

Backers submitted the California Water Conservation, Flood Control and Stormwater Management Act of 2016 to the attorney general's office. The measure would appear on next November's state ballot as a proposed constitutional amendment if enough signatures are collected.

The measure was crafted after a state appeals court ruled last spring that the tiered water rate structure used by the city of San Juan Capistrano was unconstitutional because it violated voter-approved Proposition 218, which prohibits government agencies from charging more for a service than it costs to provide it.

The court ruled that tiers must be set based on the actual cost of providing the service at each level of usage, not predetermined usage budgets as in San Juan Capistrano at the time.
The initiative would allow agencies to set rates that encourage water conservation and charge fees for stormwater management and flood control projects. It would also allow the agencies to impose fees to reduce water and sewer bills for low-income customers.

“We tried to design a modern alternative for our members to use with a lot of accountability in it still to finance these important public projects and to conserve water,” said Chris McKenzie, executive director of the League of California Cities, one of three organizations that authored the measure. “We think this is a workable approach.”

Agencies seeking to impose tiered pricing or special fees allowed under the initiative would be required to hold a public hearing. They would also be required to produce independent annual audits showing how funds are spent.

If the majority of ratepayers submit written protests, then the agency would be prohibited from imposing the fee or charge, according to the initiative.

John Perry, the resident who led the water rate structure lawsuit in San Juan Capistrano and is now a councilman for the city, said his opinion on the matter has not changed.

“The citizens deserve to be protected under Prop. 218,” Perry said. “If [the initiative authors] can somehow hoodwink the people into believing they can trust the cities that they will only charge what is absolutely necessary, they’re going to be fooled when it gets to the ballot.”

McKenzie said his organization as well as the Assn. of California Water Agencies and the California State Assn. of Counties will decide once they receive a response from the attorney general’s office whether to proceed with the measure.

“This is the result of about six months of very intense study and effort, but at the end of the day were interested in the reactions of others,” he said. “We’re very interested in having a broader discussion.”

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