Action Means the Closely Watched Tiered Water Rate Case Is Final

The California Supreme Court on Wednesday denied requests to depublish the appellate court opinion in Capistrano Taxpayers Association v. City of San Juan Capistrano, regarding the cost of service analysis required to support tiered water rates under Proposition 218. The Fourth District Court of Appeal struck down the City of San Juan Capistrano’s tiered water rate structure in an opinion issued April 20, holding that the rate structure violated Proposition 218’s proportionality requirements under article XIII D, section 6 of the California Constitution.

The State Attorney General, on behalf of the State Water Resources Control Board, requested that the California Supreme Court depublish the San Juan Capistrano case so that it could not be cited as precedent in future cases. The Association of California Water Agencies, the California State Association of Counties and the League of California Cities also requested depublication on the grounds that the opinion could hamper conservation efforts at a time when California is in the midst of a severe drought. The California Supreme Court’s denial of the depublication requests means the San Juan Capistrano case is now final.

Importantly, the San Juan Capistrano opinion did not strike down all tiered water rate structures. Rather, the appellate court expressly concluded that “tiered water rate structures and Proposition 218 are thoroughly compatible.” The appellate court, however, went on to strike down San Juan Capistrano’s tiered rates because the city “failed to carry the burden imposed on it” by Proposition 218 of showing that the inclining tiered rates corresponded to the actual cost of providing water service attributable to each parcel.