Tiered Water Rates – Part 1.

For almost two weeks before Brea Council’s August 20 meeting, I had been trying to find out if the San Juan Capistrano suit regarding tiered water rates and their non-compliance with Proposition 218 would impact Brea. I even emailed City Attorney Markman, who cut his teeth on water issues and enjoys quite a reputation in that area, for his opinion… and got no response.

Instead, at the end of last Tuesday’s meeting (when most people had been bored to tears and turned channel 3 off), Markman casually tossed out this “opinion” in an effort to wave off any possible inquiry from residents.

Capistrano Taxpayers challenge the city’s tiered water rates.

Markman, did acknowledge a “significant lawsuit” potentially effecting Brea and many California cities who have implemented tiered water rates. On Friday July 29, 2013 the Capistrano Taxpayers Association (CTA) and the City of San Juan Capistrano faced-off in Superior Court to decide whether the City of San Juan Capistrano was out of compliance with the restrictions imposed by Proposition 218 (passed in 1996).

As with most laws, Proposition 218 is mired down in legalese and, especially for the layman, is difficult to whittle down to the basic facts. Suffice it to say, Prop 218 was an effort to curtail bureaucrats looking for ways to raise revenues while avoiding Proposition 13’s restrictions. Shut off one faucet and the bureaucrats find another one to open… in this case tiered water rates.

Using conservation as an excuse to impose another tax.

jmarkman_bMarkman suggests that it was Brea’s intention to increase the per unit cost of water in an attempt to discourage users from squandering water. Prop 218 prohibits this, requiring rates to be tied directly to the cost of delivery.

His hinting at the silly notion of having to create 15,000 individual rates and the possible loss of Lifeline and Senior Citizen subsidies is worse than a smokescreen. It struck me as wholly unfounded gibberish designed to scare Brean’s away from sticking around to hear the truth when it finally emerges.

In 2006, Brea’s initial two tiered rate structure was concocted by a consultant; in 2009 Brea adopted a three tiered rate structure, again dreamed up by a consultant.

I’m still trying to determine if we’re talking about one or two consultant firms here. I have a somewhat complex CPRA request submitted, hoping to pull a few facts out from under the rug at city hall. Do stay tuned.

A few serious questions from the policy wonk in me.

In 2006, 10 years after Prop 218 became law, how many of those involved in implementing Brea’s non-complying water rates understood they were breaking the law?

Did the City Attorney, who’s professional resume is likely unequaled in the state when it comes to water issues, forget to mention to Council that their vote for tiered water rates may come back to haunt them one day?

Did the consulting firms accidentally or conveniently exclude any mention of Prop 218 in their recommendations to staff and Council? If so, would this lift the “intellectual property” protection on their calculations and other work property making them available through the California Public Records Act?

Did staff have knowledge of Prop 218 and it’s limitations? Were their reports remiss in giving Council a full and complete set of facts upon which to make their decision?

Wouldn’t be the first time. Remember when Council accidentally gave themselves raises only having to rescind them later due to public pressure? Remember, just a couple of weeks ago, when Council had to retroactively approve a $3.4 million purchase of water rights made by staff without proper authorization?

Will the swallows come back to Capistrano?

I’ve made inquiry to the Capistrano Taxpayers Association for their assessment of whatever appellate actions may still be in process. Their own communications indicate taking a wait-and-see attitude, though their spirits seem quite high. They believe that, sooner or later, the Appellate Court will uphold their claims.

Tonto_1Still, I would like to get to the bottom of Markman’s rather cryptic comment, “We’ve been waiting for this for a long time.”

What do you mean “we” Kemosabe?

Are you including Council? The consultants? Who has known that this could blow up in our faces and for how long?

Was there really a conscious disregard for the law or are Brea taxpayers, once again, witnessing wholesale corporate stupidity in action?


4 thoughts on “Tiered Water Rates – Part 1.

  1. Rick,

    Great topic of discussion and thanks for bringing it up.

    Markman makes the statement that tiered water rates are for the elderly and the poor. Yet, I don’t see the City controlling the price of gasoline for these same individuals. If Joe A drives 100 miles a day to work, he/she pays $3.85 a gallon for gas. If senior/poor Joe B drives 15 miles to work a day, he/she pays $3.85 per gallon. Age, race and social economics play no part in deciding who pays less for what commodity.

    And remember, water is a commodity (much like gas and pork bellies) and the market should dictate the price, not “social engineers” from the City. I objected to this pricing when it first came out; telling two different Council members that it was unfair that people work hard and obtain a nice house and get punished for their success. I was told that it was a “conversation” step; but when we all conserved, the City raised the rate.

    How is it that we can conserve this commodity, but we are adding thousands of new homes in the City. Don’t their toilets need water??? What if I’m a poor family and have 12 relatives living with me…my children still need a bath but I fall into the City’s higher tier. We all should be on the same tier…one price, one product.

    I have read the complete text of the San Juan decision and it’s pretty clear and precise. Brea is breaking the law and they know it; but won’t act until they are caught. I think it’s high time citizens of this City gather together and hire the San Juan attorney to start a class action against Brea. The research is already done on his part, so I’m sure he would be glad to take our case.

    My two-cents. Thanks.

    • Hey Paul… Markman suggested that equalizing rates might jeopardize Senior and Lifeline subsidies. I disagree completely and believe his comment to be nothing more than a scare tactic to keep seniors mollified.

      Paul, a traveling salesman in California pays $3.85 a gallon, Don, a dry land wheat farmer in Kansas pays $3.10 per gallon. Same day, same gas. Why? I suppose your scenario regarding gas would hold up if the city was in the business of distributing petroleum products. Fortunately for us they are not. Unfortunately, other nefarious folks are.

      Once you get passed the issue of using taxes as a tool for social engineering, a philosophical issue independent of water delivery and cost recovery, what we’re left with is sorting out how to establish equitable rates for all. Prop 218 suggests they be based upon cost, which is as good a place to start as any.

      Adding the demand requirements of a thousand toilets to the city’s water distribution system should have zero effect on cost or rates charged. At the risk of sounding politically incorrect, if you’re a poor family and have twelve relatives living with you… you probably don’t live in beautiful Brea.

      The city’s long-standing policy of managing problems via the squeaky wheel gets the oil policy means, even though they’re aware of their error and the illegality of their system of tiered water rates, nothing will get done without a suit being filed.

      Our two most senior Council members have indicated their willingness to make whatever corrections are required based on the final outcome of the San Juan Capistrano affair. However, without the agreement and support of the remaining Council members, nothing is likely to be done.

  2. “Our two most senior Council members have indicated their willingness to make whatever corrections are required based on the final outcome of the San Juan Capistrano affair. ”

    Thank goodness we still have some sense of reasonable thought on the council. I am disappointed that the other three did not comment the same. Yes I am being cynical but perhaps they refuse to take a position that could look bad on a decision supported by current management.

    “We all should be on the same tier…one price, one product.” I agree with exception. I have great sympathy for our seniors who are on a fixed income and spent years planning based on limited government. I personally would be supportive of a rebate or other program for those who apply and qualify.

    Yes, I know that opens up a whole other can of worms. I personally think we have, as a society, not found all the gold our seniors can provide because they have been on the receiving end of numerous years of poor, if not neglectful, government burdens.


    • Richard… This could prove to be another one of those sticky situations. I’m still having a hard time understanding how one of California’s leading legal experts on water issues can completely overlook mentioning Prop 218 to Council 10 years after it was passed (1996 vs. 2006).

      I don’t believe senior or lifeline discounts are jeopardized by the tiered rates correction. Imagine what trouble we would be in if we were also facing the illegal fee rebates (about $2.5 million) that Fullerton is now forced to pay the residents they cheated.

      Thanks for sharing your thoughts Richard.

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