Glendale officials defended the city’s water rate system in an appeal Tuesday of a February 2017 court ruling that determined the city overcharged residential ratepayers while unlawfully subsidizing its own rates, violating state law.
“We can have flat water rates, but we don’t have to,” Michael G. Colantuono, attorney for city, told a three-judge panel in the 2nd District Court of Appeal, explaining why the city went with a tiered system that charged heavier consumers more than efficient users.
“[The city] went with a conservation approach,” Colantuono said during oral argument.
The Glendale Coalition for Better Government, a watchdog group that filed a lawsuit on the matter in 2014, said the issue wasn’t the tiered system, but the fact that the divisions were “results-driven.”
There’s “no recognized method for what they did,” the coalition’s co-counsel Eric Benink said.
As a result, the system violates Proposition 218, passed by voters across the state in 1996. It mandates pricing be based on “analysis of cost.”
According to the city, the rates were based on a water rate study conducted in 2014, in addition to past data and projections.
Ultimately, local officials have latitude in making rate determinations, Colantuono argued.
“These are all judgment calls,” he said.
L.A. County Superior Court Judge James Chalfant ruled last year that the rates violated the state Constitution, in part because they were “not based on the proportional cost of delivering water, but rather on issues benefiting the city.”
Besides charging single-family residences more than irrigation-category customers for outdoor water use, the city put itself into a commercial category that enjoyed a lower peak-use rate relative to its own usage, according to the court’s tentative decision invalidating the water rates.
The court also agreed with the coalition’s claims that the city inappropriately used water customers’ payments to fund fire-protection services, which it argued is also prohibited by a portion of Prop 218.
Prop 218 states that no fees or charges can be imposed on property owners for governmental services that the general public enjoys in the same fashion, including fire service.
In its appeal, the city argued that fire service is actually a water service that was designed primarily for property protection, evidenced by the fact that fire hydrants are located strategically near structures.
“We don’t turn fire hoses on people. We don’t turn fire hoses on cars … We turn fire hoses on structures,” Colantuono said.
Associate Justice Carl Moor said the issue turned on whether the service was provided to the public and property owners in a substantially similar manner.
Benink responded that it did.
“[The service] protects people and property within those structures,” he said.
The coalition prevailed in a different case against the city in January 2017, when Judge Chalfant decided that the city must repay nearly $57 million for violating Proposition 26 for an unauthorized transfer of funds from its utilities to the General Fund.
That case is also up on appeal before the 2nd District court.