Thursday, January 29, 2015

City wins final decision on water rate lawsuit

From page A1 | March 18, 2014 |

Yolo County Superior Court Judge Dan Maguire issued his second — and final — opinion on parts of a nearly yearlong lawsuit against the city of Davis Monday morning, affirming the city’s current and future water rates, leaving other less-central aspects of the lawsuit for later in the year.

The decision, a 20-page opinion that delves into the byzantine world of water rate structures and their legality, affirms the city’s most recent water rate billing structure and one due to take effect next year. This decision follows a draft decision in Davis’ favor in January.

The lawsuit, filed March 22, 2013, is totally separate from the water rate initiative that qualified for the June 3 ballot. The lawsuit asks the court to consider the legality of the water rates and the initiative will poll the minds of the voters to see if they think the rates are fair.

Maguire’s written opinion methodically finds fault with the opponents’ arguments, which essentially asked the Yolo County Superior Court to rule against the opinion of the appellate California 4th District Court.

Any astute Superior Court judge would be out of bounds to agree. It would be like asking the California Supreme Court to rule against legal abortions when the U.S. Supreme Court has authority over the matter, ruling the opposite. The legal term is called “stare decisis,” and forms part of the foundation of the American legal system.

Such a legal strategy usually fails at the lower court level with certainty, but has been used by legal opponents to the status quo throughout American history to lay groundwork for a higher court fight that would have the authority to find favor with them.

When Michael Harrington, the opponents’ attorney, was asked if the group would appeal, he said when the remnants of the case were decided after an October trial, the group would decide on the matter.

“When we started this case, we assumed that one side or the other was going to appeal the trial court outcome, but (we) plaintiffs will make that final decision at a later time,” he wrote in an email.

While Maguire’s legal conclusions were largely foregone, his opinion contained educational explanations for the reasoning for the way water rates are put together and the way the law allows cities and other agencies to figure out how to bill their customers.

Paying for city water under the current rate structure, Maguire wrote on page 12, is much like renting a moving truck:

“For instance, consider two people who rent a moving truck for one day for $50, plus 30 cents per mile. The first person drives 250 miles on that day, and thus pays a total of $125, which equates to 50 cents per mile. The second person drives 10 miles, and thus pays a total of $53, which equates to $5.30 per mile.”

Maguire wrote that even though the second driver pays 10 times more per mile, the cost is fair to both drivers because the cost to supply the rental truck goes beyond how many miles it’s driven. There are insurance, vehicle maintenance, registration and acquisition costs and the cost to have the trucks ready to go when the customer needs them.

The idea that the moving company needs a fixed charge — that $50 — plus the charge per mile is similar to the way the current Bartle Wells water rate is put together. Water customers are charged a fixed rate depending on the size of their water connection, plus a charge that varies by the month based on their water usage.

The fixed rate pays for fixed costs at the water utility, like employee salaries, regular maintenance, etc., while the month-to-month costs borne by ratepayers pay for month-to-month costs like the number of chemicals or electricity used to purify and distribute the amount of water used.

Both the Bartle Wells and the future consumption-based water rates have fixed charges and variable charges. The consumption-based rate also has a supply charge, but part of its rate is based on peak water usage months, so consumers have the incentive to conserve water during those months to charge their water rates for the coming year in a way the Bartle Wells structure cannot offer.

Bartle Wells recovers 40 percent of the system’s costs through fixed charges, while consumption-based rates collect only 13 percent through fixed charges.

Maguire said the law’s interpretation of Proposition 218 looked favorably on both rate structures because a controlling appellate court opinion said rates do not have to be fair on the individual level, but can be proportionately assigned to customer groups based on their potential to impose costs on the water system.

 — Reach Dave Ryan at [email protected] or 530-747-8057. Follow him on Twitter at @davewritesnews



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