Class Calls Tiered Water Rates Illegal Way to Fight Calif. Drought

     SAN RAFAEL, Calif. (CN) – A class action calls Marin County’s tiered water rates an unconstitutional penalty to enforce conservation, because they are not a fee based on the cost of service.
     Lead plaintiff Anne Walker’s lawsuit against Marin Municipal Water District follows an April 20 appellate court ruling that San Juan Capistrano’s tiered water rates, which charge bigger water users higher rates, was unconstitutional .
     A panel of the state’s 4th District Court of Appeal found that tiered water rates are allowed, but charging bigger water users incrementally higher rates not based on cost violated Proposition 218, which voters approved in 1996 to limit service fees imposed by local agencies.
     Attorney Beau Burbidge, who filed the May 26 class action against Marin Municipal Water District, said that the San Juan Capistrano case “didn’t create any new law, it was just the first one to interpret this constitutional provision.”
     The decision “was really in our favor, it was really spot on,” he said.
     Like San Juan Capistrano’s former rate structure, the Marin Municipal Water District has stepped tiers determined “on an arbitrary basis that wouldn’t happen if they were actually reflective of the actual cost to provide service,” Burbidge said.
     The district’s water rates include both a fixed service charge based on meter size and a per-unit charge. The per-unit rate uses a system of four tiers to charge for water. Customers pay a higher per-unit rate for each additional unit if the water use increases into the next higher tier, according to the district’s website.
     The system is “designed to encourage water conservation,” the website states.
     In her Superior Court lawsuit, Walker says that for residential customers, the cost for water service for the progressing tiers is calculated by an arbitrary percentage increase. Tier 1 is increased by 50 percent to calculate Tier 2, Tier 2 is increased by 50 percent to calculate Tier 3, and Tier 3 is increased by 33.33 percent to calculate Tier 4, according to the complaint.
     The tiered rates are “a financial penalty intended to force conservation and are not a fee for service,” the complaint states. It claims the rate structure “bears no relation to and exceeds the costs of providing water service.”
     Burbidge said the case is not about objecting to water conservation, which he says all Californians need to do, but the method by which Marin Municipal Water District does it.
     Under the state’s water-cutting mandate, the district must cut its use by 20 percent.
     “We all understand that there are these water-cutting targets and they are important. However, I think there are legal means for water districts to meet the targets,” Burbridge said.
     In the San Juan Capistrano case, the city considered appealing the appellate ruling, but announced on May 19 that it would settle the lawsuit filed by the Capistrano Taxpayers Association.
     The city’s attorney, Jeffrey Ballinger, said the settlement “resolves all issues between the plaintiffs and the city, including the prior tiered water rate pricing structure developed by Black & Veatch, which was in place from Feb. 1, 2010 through June 30, 2014.”
     Jim Reardon, with the Capistrano Taxpayers Association, said he was “delighted to see that the city chose to avoid further litigation and instead focus on urgent water conservation issues.”
     The city agreed to pay the association $884,000 in attorney fees.
     Marin Municipal Water District, which did not immediately respond to a request for comment, is not the only water system to come under fire for its tiered water rates. Lawsuits are pending against Glendale and Chula Vista’s Sweetwater Authority.
     Burbidge said he expects “there are going to be quite a few” similar lawsuits filed throughout the state.
     The State Water Board is expected to release April’s water use numbers Tuesday, which will include estimated daily water use per person and total water use for nearly every community water system in California.
     PG&E Challenges USA Over San Bruno Disaster
     Katherine Proctor
     SAN FRANCISCO (CN) – The United States needs more evidence for its indictment charging Pacific Gas & Electric with willfully violating regulations before the fatal 2010 San Bruno pipeline explosion, PG&E told a federal judge Monday.
     The Sept. 9, 2010 explosion killed eight people and leveled a neighborhood. PG&E in April was fined $1.6 billion for the blast – the largest penalty ever assessed by the California Public Utilities Commission.
     Federal prosecutors indicted PG&E on 27 counts of violations of the Natural Gas Pipeline Safety Act, claiming it willfully violated safety standards by not maintaining proper records, failing to identify threats and failing to fix parts of the pipeline.
     U.S. District Judge Thelton Henderson heard from both sides in the criminal case Monday morning.
     The primary issue of the hearing was PG&E’s motion for the government to produce more discovery.
     Steven Bauer, arguing for PG&E, said that since the case was “very novel” and “not well-trod,” it is the government’s responsibility to share the burden of proof.
     “The government has to prove that an engineer knowingly and willfully violated a regulation, and that whatever that engineer was thinking was not objectively reasonable,” Bauer said.
     Bauer added that the government, “given what they’re prosecuting,” should have produced its share of discovery documents as soon as it started the investigation four years ago.
     “There have been documents held back, and there’s no declaration saying there’s a reason to hold them back. I think it’s just tactics,” Bauer said.
     Assistant U.S. Attorney Hallie Hoffman said the government was not obliged to prove the “objectively reasonable” standard, which applies only to civil cases, not criminal ones. She said the government must prove a willful state of mind.
     For that reason, she said, PG&E’s requests for investigations of records of state agencies that oversaw the pipeline were “wholly irrelevant.”
     Bauer disagreed, saying the government’s argument was a “massive straw man to avoid a burden that they knew was coming.”
     “When you bring this kind of novel, massive case, this is to be expected,” he said.
     Henderson will hear from both sides again in October.
     Bauer is with Latham & Watkins in San Francisco.
     Hoffman is with the U.S. Attorney’s Office in the Northern District of California.

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