Lawsuit Threatens Sweetwater's Tiered Water Rates But Not San Diego's
One agency that might feel the sting of the ruling is Chula Vista's Sweetwater Authority, which is being sued by the same lawyer who brought the case in Orange County's San Juan Capistrano.
The state 4th District Court of Appeal ruled that San Juan Capistrano's tiered water rate system, which charges bigger water uses higher rates for their water, is unconstitutional.
The city of San Diego also uses a tiered water rate system, charging households that use more than 36 hundred cubic feet of water a month $8.766 per hundred cubic foot, while households that use less than 8 hundred cubic feet of water a month are charged $3.896 per hundred cubic foot. Each hundred cubic foot equals 748.05 gallons of water.
Kurt Kidman, a spokesman for the city's Public Utilities Department, said the city's attorneys "are confident that our water rates are in compliance with all laws."
In the San Juan Capistrano case, the court found the city's water rates violated Proposition 218, which says municipal governments can't charge more for a service than it costs to perform that service. So San Juan Capistrano was charging bigger water users more without proving it cost more to provide those users with water.
Kidman said San Diego's rates were established using a 2013 study that looked at how much it cost to provide water. He said because it costs more to provide heavy users with more water, the rates are justified.
City Attorney Jan Goldsmith said in a statement that San Diego is not in danger of a lawsuit.
“The City Attorney’s Office has been careful to guide the city so that San Diego’s tiered water rates are based on the real cost of providing service," the statement said. "That is consistent with the court’s decision in Capistrano Taxpayers Association v. City of San Juan Capistrano. San Diego’s 2013 Cost of Service Study indicates how the cost of water at each tier for single-family residential customers is calculated on the actual cost of water and service."
But Chula Vista's Sweetwater Authority is not as fortunate. It's being sued by a group called Sweetwater Authority Ratepayers Association.
Benjamin Benumof, one of the attorneys involved in the Sweetwater and Orange County cases, said the court rejected San Juan Capistrano's rates because they were arbitrary.
"You can’t just willy nilly come up with whatever rates you want to meet the desired revenue goal," he said.
Benumof said he thinks Sweetwater's system is equally arbitrary.
"We've seen nothing in the rate study or elsewhere to substantiate the authority's rates," he said.
Kelly Salt, an attorney representing the Sweetwater Authority, said its rate system is different from San Juan Capistrano's.
"In particular because the administrative record for the authority is very strong in terms of justifying the different cost allocations within the various tiers," she said.
Gov. Jerry Brown recently issued drought orders that called on local water agencies to use tiered water pricing to help save water. Brown called the court's ruling in the San Juan Capistrano case "a straitjacket on local government at a time when maximum flexibility is needed," according to the Sacramento Bee.
A 2014 study at the University of California, Riverside, estimated that tiered rate structures reduce water use over time by up to 15 percent.
"It’s just unfortunate that this case came down during the worst drought in California history, when agencies are being required to meet significant reduction demands in their water use," Salt said.
But Benumof said his cases do not stand in opposition to water conservation efforts.
"What this is going to require cities and districts to do is dig a little deeper. If they do have completely arbitrary tiered systems, they're not going to be able to hocus pocus correct it. They're going to have to be cost-based," he said.
Benumof is also suing Glendale in Los Angeles County for its water rate system, but he said he doesn't expect to expand beyond that.
"It's entirely possible to have a tiered system that's based on different sources of water that have different costs to them," he said.