Court Affirms Groundwater Augmentation Charge Exempt From Proposition 218 As A Water Service Charge

 By William W. Abbott

Griffith v. Pajaro Valley Water Mgt. Agency (October 14, 2013) ___ Cal.App.4th ___. 

The long saga of the groundwater augmentation strategy for Pajaro Valley in Santa Cruz County has reached its next, and possibly final stopping point. The underlying saga is a telltale forecast of what lies ahead for California, with the inevitable conflicts generated by resource allocation and management. In Griffith, the specific conflict stems from the intersection of groundwater management strategies designed in part to better manage water resources and to reduce saltwater intrusion with the citizen rights created by Proposition 218.

The history and scope of the groundwater augmentation program to be carried out by the Pajaro Valley Water Management Agency is documented in prior litigation. Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 1364. The Agency was formed in part to combat saltwater intrusion resulting from over pumping of groundwater. The Agency’s plan was to combine recycled wastewater with the development of surplus surface flows. The project involved pipeline transmission to move the developed water sources into areas subject to chronic over pumping. The Agency financed its implementation program in part through a per acre foot groundwater augmentation fee applicable to wells within the district. Starting in 2002, the district levied various charges, the last of which was adopted in 2010. The earlier charges were subject to various legal challenges, but that litigation was resolved as part of a stipulation judgment following a validation action.

In May 2010, the Agency conducted a public hearing on a proposed three-tier augmentation charge to all parcel owners. At the hearing, the Agency tallied 291 protests out of 1,930 eligible parcel owners. The Agency then enacted the fee increase, and conducted an all mail election, using a weighted voting scheme proportional to each parcel’s potential financial liability, determined by historical groundwater use. The matter passed based upon its weighted voting tally, although if measured only numerically in terms of the number of parcels, the matter would not passed. Griffith, a property owner, and others, filed suit challenging the charge.

The trial court ruled in favor of the Agency. On appeal, the threshold issue was whether Proposition 218 applied. The voter approval requirements do not apply to “sewer, water or refuse collection services.” The plaintiff argued that these services were not a conventional water service. While the court did not disagree with this assertion, the court did not interpret Proposition 218 so narrowly, and after reviewing the Agency’s enabling legislation as well as the omnibus act implementing Proposition 218, concluded that the Agency’s activities qualified as conventional water service.

Griffith’s other challenges were also rejected. Griffith argued that the tenants and others potentially liable for the assessment were entitled to participate in the protest hearing. Not so held the court, as the state code implementing Proposition 218 provides that notice is to be given to the property owner. Griffith also presented a multi-prong attack that the charges violated the substantive limitations of 218 (e.g. unauthorized expenditures, fees used for other purposes, fees exceed that necessary to provide the service), but in each instance, the court rejected Griffith’s arguments on the basis that Griffith was viewing the statutorily authorized purposes too narrowly.

Griffith’s final substantive challenge was based upon an alleged violation of the Political Reform Act (“PRA”). The ordinance imposing the fee passed with the minimum number of required votes.  Griffith argued that one of the directors voting in favor was disqualified as a result of his obligation to pay the charge and as a potential benefitting owner under the augmentation project, and under the authority of the PRA, a reviewing court should use its discretion to set aside the ordinance approving the charge. However, the appellate court concluded that the fact pattern fit the express language of the regulations adopted by the Fair Political Practices Commission for special districts wherein the governing body adopts broad based fees or charges. Cal. Code of Regulations, tit. 2, section 18707.2(c).

William Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues. 

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