City Says Lawsuit is Frivolous as Proposed Initiative is not Authorized under State Constitution
Milpitas City Officials claim that a lawsuit filed against the Mayor and two Councilmembers is frivolous as the resident-backed water rate initiative it aims to impose would go against the State Constitution.
The lawsuit stems from Milpitas City Council decision to take no action this summer when presented with a citizens petition to put the water rate issue on the fall ballot. The ballot initiative, as written, would have forced the city to implement a tiered water rate system with no legal justification for the basis of the rates or whether they are tied to the cost of service as required by the State Constitution. Further, although the State Constitution authorizes initiative petitions on fee or rate type issues, such petitions are only authorized when they reduce or repeal an existing fee. The proponents of the water rate initiative petition sought to introduce an entirely new rate structure in violation of the State Constitution. This rate structure also appears similar to a rate structure deemed illegal in the San Juan Capistrano decision. In April 2015, California’s 4th District Court of Appeal struck down a water-pricing system used by the City of San Juan Capistrano that charged customers more per-gallon for heavier water use. The court said the tiered rate structure violated Proposition 218, a 1996 statewide ballot measure that said municipalities can’t charge fees that exceed the cost of providing a service. California’s Supreme Court upheld this decision later that year. This case sets a precedent for all California cities on tiered-water rate structures.
The city would also lose money if it implemented the proposed rate structure as the first tier is below the cost the City is charged to buy wholesale water from San Francisco Public Utilities Commission (SFPUC) and Santa Clara Valley Water District (SCVWD). Both the first and second tiers are insufficient to pay for water quality testing, maintenance, service calls, leaking pipes and on-going system maintenance which are required to keep the city’s water safe and reliable. Tiered rates as proposed would also be unfair to residents designated tiers 2 to 4 who would be required to pay a higher rate to likely offset the cost of the first two tiers that are below the cost to buy water, test the water for safety and maintain the system.
Last week, resident Rob Means filed a lawsuit challenging the City Council decision to let the citizens petition die by taking no action. Means claims the city’s inaction is a violation of the election code that requires a yes or no vote once petitions are submitted with the proper number of valid signatures.
“What Mr. Means fails to realize is that the Elections Code will not apply where the State Constitution is being violated as the State Constitution trumps the Elections Code,” said Milpitas City Attorney Chris Diaz. “The Council has a sworn duty to uphold the Constitution.”