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RES 2024025
City of Pleasanton
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RES 2024025
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CITY CLERK
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RESOLUTIONS
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5/7/2024
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<br /> <br /> <br />42 <br />Proposition 218. These cases include, for example, Capistrano Taxpayers Assoc., Inc. v. City <br />of San Juan Capistrano (186 Cal. Rptr. 3d 362 (Cal. App. 4th Distr. 2015)), Bighorn-Desert View <br />Water Agency v. Verjil (46 Cal. Rptr. 3d 73 (Cal. 2006)), and Howard Jarvis Taxpayers Assoc. v. <br />City of Fresno (26 Cal. Rptr. 3d 153 (Cal. App. 5th Distr. 2005)). <br /> <br />Under the Bighorn case, for example, the court held that under Article XIIIC, local voters <br />could adopt an initiative measure that could reduce or repeal a local agency’s rates and <br />charges, though it is not clear whether (and California courts have not decided whether) any <br />such reduction or repeal by initiative would be enforceable in a situation in which such rates and <br />charges are pledged to the repayment of bonds or other indebtedness, as is the case with <br />respect to the Installment Payments securing the 2024 Bonds. <br /> <br />Under the City of San Juan Capistrano case, the court held that tiered or inclined rates <br />that go up progressively in relation to usage must correspond to the actual cost of providing <br />water service at each tier (level of usage), and accordingly the pricing for any tier cannot exceed <br />the cost of service to that tier. <br /> <br />City’s Current Practice Regarding Rates and Charges. The City’s practice in <br />implementing increases in water rates and charges has been to comply with the requirements of <br />Article XIIID, including the practice of providing property owners with a 45-day mailed notice and <br />public hearing before the City Council approves rate increases. <br /> <br />Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and <br />Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be <br />enacted. As noted above, under the Bighorn case, local voters could adopt an initiative <br />measure that reduces or repeals the City’s rates and charges, though it is not clear whether <br />(and California courts have not decided whether) any such reduction or repeal by initiative <br />would be enforceable in a situation in which such rates and charges are pledged to the <br />repayment of bonds or other indebtedness, as is the case with respect to the Installment <br />Payments securing the 2024 Bonds. There can be no assurance that the courts will not <br />further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the <br />ability of local agencies to impose, levy, charge and collect increased fees and charges <br />for water, or to call into question previously adopted water rate increases. <br /> <br />Environmental Regulation <br /> <br />The supply of water by the City through the Water System is regulated, to a large extent, <br />by the federal government and the State. Water treatment standards set forth in federal and <br />State law control the operations of the Water System (and the wholesale water providers that <br />supply water to the Water System) and mandate its use of technology. If the federal <br />government, acting through the Environmental Protection Agency, or the State, acting through <br />the Department of Health Services, or additional federal or State legislation, should impose <br />stricter standards upon the Water System, the City’s expenses related to the Water System <br />could increase accordingly and rates and charges would have to be increased to offset those <br />expenses. See “Maintenance and Operation Costs; Third Party Sources of Water Supply” <br />above.” <br /> <br />It is not possible to predict the direction which federal or State regulation will take with <br />respect to water standards, although it is likely that both will impose more stringent standards <br />with attendant higher costs. <br />
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