City Profiting

[conarb]

I put this under California because it relates to Prop 218; however, it has constitutional ramifications throughout the nation.

“This isn’t about whether our clients can pay more,” said Beau Burbidge, a San Francisco attorney representing the group. “It’s about bringing the town into compliance with the law. It’s about the principle. It’s not like the clients are becoming destitute from the water rates, but the town is running amok.”

The lawsuit, however, is raising eyebrows and some concerns in Hillsborough, one of America’s richest addresses — a community of 11,000 people in the San Mateo County hills where the median home value is $4.3 million and property owners over the years have included William Randolph Hearst, Bing Crosby and New England Patriots quarterback Tom Brady.

The case follows a key ruling last year in which a California appeals court found that tiered water rates in the Orange County city of San Juan Capistrano were unconstitutional. The ruling, which has been closely watched by water agencies statewide, did not say that all tiered water rates — where somebody pays a higher price per unit of water the more they use — were illegal. Rather the court ruled that water departments must clearly demonstrate a link between the higher rates and the cost of providing the water.

Like the Orange County case, the Hillsborough lawsuit focused on Proposition 218, a ballot measure approved in 1996 by state voters.

Hillsborough clearly violated the law, the lawsuit says, because the city buys all of its water from the San Francisco Public Utilities District’s Hetch Hetchy system, and pays $1,633 per acre foot of water. That works out to be $3.75 per 100 cubic feet, or unit. But Hillsborough charges its residents $8.74 per unit for using up to 10 units a month, and gradually higher rates peaking at $17.36 a unit for usage over 100 units a month. That’s far more than the city needs to pay its small water department staff and run the water system, Burbidge said.

“We are looking for them to make the attempt to tie their tiers to the cost of providing water,” said Burbidge. “They arbitrarily set the tiers. It is blatantly illegal.”

Each “unit,” a common measure in water bills statewide, is about 748 gallons. Two-thirds of water providers in California used tiered rates. Burbidge said he hopes the lawsuit “becomes a cautionary tale for other cities.”¹

The voters on at least two occasions have attempted to limit government agencies to charging only the cost fo delivery of services, any profiteering by cities, water districts, or other agencies is strictly prohibited, whether it's a water bill or a building permit


¹ http://www.eastbaytimes.com/2016/11...esidents-sue-saying-water-rates-are-too-high/

 

[tmurray]

I agree with only charging what it costs to deliver the service. The issue with utilities is that most people don't take into account the degradation of the infrastructure. Eventually all of those pipes and pumps and treatment plants will need replaced. As long as the municipality has the ability to demonstrate that they are recouping fees based on the continuing maintenance of the system, that sounds reasonable to me.

 

[conarb]

I agree with only charging what it costs to deliver the service. The issue with utilities is that most people don't take into account the degradation of the infrastructure. Eventually all of those pipes and pumps and treatment plants will need replaced. As long as the municipality has the ability to demonstrate that they are recouping fees based on the continuing maintenance of the system, that sounds reasonable to me.

I agree, but utilities should put such funds in a trust fund and not use them for other purposes, like unfunded pension liabilities. AHJs here are using a workaround by moving other services within the building department so the costs of the building department are higher, an example I've seen is moving housing into the building department so those buying building permits are paying the costs of housing the poor, permit fees should be limited to the costs of providing the service of building inspection.