By William W. Abbott

Some people look at a water glass and see it half full, others see it half empty. It all turns on one’s perspective. Differing perspectives can also apply to water charges during periods in which the utility user elects to not take service: are those charges to be treated as standby charges, subject to voter approval by Proposition 218 (Cal. Constitution Art. XIII D), or are they fees for service, exempt from voter approval?

In David Paland v. Brooktrails Township Community Services District the Brooktrails Township Community Services District provides water and sewer services to approximately 6500 parcels in Mendocino County. David Paland, a property owner within the district, took service from the district but, depending upon extended absences or the inability to pay, periodically discontinued services. For a number of years, the District imposed no charges during periods of discontinued services. In 2003 and in response to State pressure to upgrade facilities, the District adopted monthly charges on all parcels with connections, whether or not the owner availed themselves of the services. Subsequently, Paland availed himself services at different times, but was billed monthly, even when service was discontinued. Paland sued and the court ruled that the challenge to the 2003 rates was time barred. Paland then amended his complaint challenging a resolution adopted in 2007, setting new water and sewer rates.  Paland argued that the new rates required voter approval. The trial court ruled for the District.

Paland pursued his argument on appeal, arguing that mandatory charges imposed on an owner with a connection who elects to not take service is an assessment, subject to voter approval. Like the trial court, the California Court of Appeal for the First Appellate District ruled for the District relying upon the language of Proposition 218 which provides in part, “No fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Fees or charges based on potential or future use of a service are not permitted.”  (Emphasis in the opinion.) Paland argued that the phrase “immediately available” effectively meant that the property owner was only required to turn the tap to obtain service. Under his interpretation, if the owner voluntarily discontinued services, service would not be immediately available. The Appellate Court eventually concluded that the phrase “immediately available” is to be resolved by looking at the agency’s behavior, not that of the consumer. Where the connection exists and the customer elects to not take service, the ongoing charge is a fee and not an assessment.  As a result, voter approval is not required.

William W. 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, nor 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.