Bill Will Pit Schools Against Water, Sewer Agencies

Legislation to reverse a state Supreme Court decision regarding a San Marcos sewer fee dispute was unveiled here Wednesday to the enthusiastic applause of local water and sewer agencies, but to the dismay of school officials who would rather the legal ruling be left alone.

In a decision that critics say could cause drastically higher residential water and sewer charges, the justices said last July that so-called “capacity fees” that public schools, colleges, jails and prisons pay local agencies for burdening public waste-water and sewage systems are a tax. Under state law, public entities cannot levy taxes on other public entities.

But the draft of a bill that the Assembly and Senate Local Government committees held a special joint hearing on Wednesday--even before the measure was officially introduced--would authorize the continued collection of the special hook-up and growth fees from public agencies.

The draft also provides that any attempt by a public agency to get a retroactive refund for fees paid illegally in years past--a question left unanswered by the Supreme Court’s ruling--be disallowed if it would have a devastating impact on the affected water and sewer district.

The Supreme Court’s ruling, which shocked local government officials throughout the state, came after a years-long dispute between the San Marcos Unified School District and the San Marcos Water District. If the ruling stands, officials say the 6,000-customer water district might have to refund $100,000 to the school district and $300,000 to the Palomar Community College District, and bear millions of dollars in costs for providing sewer hookups for the new San Diego State University north campus when it opens around 1990.

Area homeowners would be stuck with the bill for those expenditures, officials say.

An aide to Assemblyman Dominic Cortese (D-San Jose), chairman of the Assembly Local Government Committee, said he will introduce the emergency legislation to deal with the Supreme Court ruling, probably within a few days. Cortese and Senate Local Government Chairwoman Marian Bergeson (R-Newport Beach) held a special hearing on the issue in October in Riverside.

Assemblyman Bill Bradley (R-San Marcos), who is on Cortese’s committee, said he may insist that the legislation make a distinction between community institutions like schools, and state and regional ones like prisons and colleges.

“The children using the toilet facilities at school are the same ones who use it at home,” Bradley said. “Down at the Otay Mesa prison, that’s different. . . . I have never agreed with the water district charging the schools a sewer fee.”

But Vern Peltzer, an attorney representing the San Marcos Water District, disagreed with Bradley’s contention that schoolchildren’s parents already pay for the sewer capacity used by new or expanded schools. Peltzer said the water district in San Marcos, one of several he represents in North County, uses detailed “statistical analyses” to determine how much should fairly be charged to residential customers and to public institutions. The fees paid by residential customers cover their household use, he said. If a major new public institution is built in the area, those additional costs to water agencies are not covered by residential fees.

Peltzer also took issue with a suggestion by a representative of the University of California system that the draft legislation unveiled Wednesday would give water agencies too much leeway in setting the fees.

“There are several statutes on the books . . . that say that fees must be related to costs,” Peltzer said. “Unlike what the university is trying to tell you, there is no carte blanche to charge whatever you please.”