Los Angeles-based Metropolitan Water District must justify rate increases on San Diegans
The San Diego County Water Authority is celebrating a partial victory over the Los Angeles-based Metropolitan Water District of Southern California, after a judge ruled on Friday (September 20) that Metropolitan could not exempt significant water rate hikes for 2013 and 2014 from Proposition 26, a law passed by voters in 2010 that requires a two-thirds supermajority of voters to approve a tax or fee increase not directly tied to the cost of providing a government service.
“Nor do I think it is wise, as a matter of discretion, to eliminate the Proposition 26 issues without reviewing the evidence for other claims in this case. On the merits, it is likely that very similar issues are at stake whether the case turns on Proposition 26 or the other bases presented by the parties, in that at trial I will review the evidence that Metropolitan’s rates bore an appropriate relationship to its costs,” reads an excerpt of Judge Curtis E.A. Karnow’s opinion, as shared by the San Diego Authority.
Metropolitan had argued that its body consisted solely of a “voluntary collective” whose members willingly agreed to pay any rates set, and that since two-thirds of Metropolitan’s board of directors approved the rate hikes, which disproportionately affect San Diego consumers, the supermajority consensus had been reached without putting the matter to voters or establishing that the fees charged were directly tied to the cost of providing the region’s water.
“This is the first step toward what we intend to prove at trial: that Proposition 26 protects water ratepayers throughout Southern California and the entire state by ensuring that they are not being charged more than the actual cost of government services,” says Authority counsel Daniel Purcell. “[Metropolitan] fought hard to avoid the clear will of the voters. But as the court made clear in its order, [Metropolitan]’s arguments don’t have any factual basis.”
The lawsuit, filed by the Authority in 2010, has yet to be settled, though it has thus far been ruled that rate changes prior to 2010 cannot be challenged due to the lack of Prop 26 protection at that time. The Authority claims that San Diegans are being overcharged by as much as $57 million annually by Metropolitan, a number that could grow to $217 million per year by 2021.
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