Judge Finds Glendale Guilty of Water Price Manipulation.
In a complete victory for the Glendale Coalition for Better Government in its second lawsuit against the City of Glendale, Los Angeles Superior Court Judge James C. Chalfant, found the City of Glendale in violation of proposition 218 for charging Glendale residents in excess of the cost of providing water service.Glendale Coalition for Better Government, Inc. v. City of Glendale (Case No. BS153253).
In a stinging rebuke to the city of Glendale, the court ruled:
- That the cities rate structure is designed with the purpose of making small businesses subsidize the city’s cost of water usage.
- That the base cost for a single family home is not properly allocated to tiers resulting in single Family Residential being charged at a higher tier even though the usage is within or below the average use of water.
- That the city illegally shifted the cost of water for fire protection from itself to Glendale rate payers.
After two years of litigation culminating in a two-day trial, the Court found and declared pursuant to Code of Civil Procedure section 1060 that the City’s water rate structure, adopted on August 5, 2014, and currently in effect, violates California Constitution, Article XIIID, section 6(b) and is invalid in the following respects:
- As applied to single family residential (“SFR”) customers, the base costs are not properly allocated to tiers, and thus the SFR rates violate section 6(b)(3);
- The City improperly collapses its own water rates (i.e. the City of Glendale and Public Authority accounts) into the commercial category and thus, receives a subsidy which violates section 6(b)(3); and
- The City includes in the fixed monthly charge for its water rates, fire protection costs, which violates section 6(b)(5).
The Coalition will develop a claim procedure for Glendale residents to claim refunds owed. If you would like to be notified in the future, signup here:
In 1996, the voters approved Prop. 218, the Right to Vote on Taxes Act. The measure protects taxpayers by limiting the methods by which local governments exact revenue from taxpayers without their consent.
Prop. 218 places a number of restrictions on fees and charges imposed property-related services, like water service.3 The two relevant restrictions in this litigation are:
- Article XIII D, section 6, subdivision (b)(3), which states: The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.
- and Article XIII D, section 6, subdivision (b)(5), which states in relevant part: No fee or charge may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.
How the City of Glendale Manipulated Water Prices.
The Report submitted by the city to determine water charges states, “[i]n order to provide adequate service to its customers at all times, the [City’s] water system must be capable of not only providing the average amount of water used, but also supplying water at peak or maximum rates of demand. Therefore, rates are designed to recover system expenses needed to provide both average and peak use.”
Peaking factor for different classes of users were calculated as below:
Despite the clear availability of different classes, The city of Glendale, with the highest peaking factor of 2.06, conveniently collapsed itself with small business peaking factor of 1.25 for an average of 1.52 thereby giving itself a subsidy at the expense of small business. The City simply chose to ignore the data for its own convenience and at the expense of small business owners.
How The City of Glendale Shifted its Obligation to pay for its Water.
Article XIII D, section 6, subdivision (b)(5) of the State Constitution states in relevant part: No fee or charge may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. In layman terms, the above states that the city must pay for fire-hydrants and similar general governmental services.
Glendale ignored this mandate of the State Constitution and included in the cost of providing water services to Glendale residents a fixed monthly charge. Thereby Glendale shifted an obligation to provide a service and burdened that cost to its residents in violation of the State Constitution.
Dr. Benumof is the Founder of GEO-LAW.COM and is Special Counsel to Krause Kalfayan Benink & Slavens, LLP in San Diego, California. Dr. Benumof has extensive expertise and experience in the full spectrum of “GEO-LAW” matters, from project due diligence and planning, to contract negotiation and formation, to project advocacy and entitlement, to bench and jury trials, arbitrations, mediations and appellate work in State and Federal courts, and before a multitude of public and private Agencies, Boards, and Commissions.