Jeff Smith 12:30 p.m., April 23
City Attorney prepares council for a vote on increased water rates
Public Utilities Department may seek approval from City Council for a five-year increase
San Diego's City Attorney is already looking for legal justification for what appears to be an upcoming pitch to increase water rates in order to make up for the rising cost of wholesale water prices.
The problem, reads an April 26 legal opinion, is that the Public Utilities Department, through Assembly Bill 3030, could enact a five-year increase without providing a cap on the increase and at the same time only giving the public one opportunity to register complaints.
But AB-3030, passed in 2008, appears to be in conflict with Proposition 218, the state law that requires a cap be placed on any such rate increases. The dueling laws may be an issue if the Public Utilities Department tries to get City Council to sign off on the increase.
Talk of water increases for San Diego residents, however, comes more than six months after former mayor Jerry Sanders placed a freeze on any rate hikes for Fiscal Year 2012/2013. At the time Sanders said the Public Utilities Department would be able to cover what was a 9.7 percent increase in wholesale water rates.
But with the new fiscal year approaching the Public Utilities Department appears poised to ask residents to pay more.
To protect the City from any legal challenges City Attorney Jan Goldsmith recommends that should the council take up the increase in water rates, they place a limit on the amount that rates could rise.
From the opinion:
AB 3030 arguably takes away from one of the main substantive requirements of Proposition 218: namely, the obligation for the agency to calculate the amount of the proposed fee and to provide notice of the amount of the proposed fee.
The California Constitution prohibits the Legislature from amending an initiative measure like Proposition 218 unless the initiative measure itself authorizes legislative amendment. Proposition 218 contains no such authorization. Although no trial court or appellate decision has addressed the issue, an argument could be made that AB 3030 amounts to an impermissible amendment of the substantive requirements of Proposition 218.
Although courts have been silent on this aspect of AB 3030 to date, there is a possibility that AB 3030’s lack of a cap on pass-through water rates violates the substantive provisions in Proposition 218; i.e., that the “amount” was not calculated or contained in the public notice because it was unknown at the time of the public hearing on the rate increase. This issue can be mitigated by placing a defined, maximum cap on the amount water rate increases being authorized.
I am waiting to hear back from Mayor Filner's Office on whether he plans to propose a freeze on water rates.
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