California Water Law Update

by Snell & Wilmer
Contact

[author: Katherine McKitterick]

To address the worsening drought, on April 1, 2015, Governor Brown issued Executive Order B-29-15 (“Executive Order”), mandating a 25% reduction in potable urban water consumption. In response, the State Water Resources Control Board has passed emergency regulations that will directly affect water districts and users. And a recent case from the Fourth District Court of Appeal struck down the City of San Juan Capistrano’s tiered water rates under Proposition 218.

Summary of the Executive Order

The main directive of Governor Brown’s Executive Order is the following: the State Water Resources Control Board (the “Water Board”) will impose restrictions to achieve a statewide 25% reduction in potable urban water usage through February 28, 2016. Further, the Department of Water Resources (the “Department”), along with local agencies, will attempt statewide to collectively replace 50 million square feet of lawns and ornamental turf with drought tolerant landscapes. And the California Energy Commission, along with the Department and the Water Board, will implement an appliance rebate program to provide monetary incentives for replacement of household devices. The Water Board will impose restrictions to require that commercial, industrial, and institutional properties immediately implement water efficiency measures to reduce potable water usage in an amount consistent with the reduction targets (i.e. 25% reduction in potable urban water usage).

What the Executive Order Means for Water Users

Prohibitions. Prohibitions for all water users include: using potable water to wash sidewalks and driveways; runoff when irrigating with potable water; using hoses with no shutoff nozzles to wash cars; using potable water in decorative water features that do not recirculate the water; and using outdoor irrigation during and 48 hours following measurable precipitation.

Curtailment. Water right holders will likely see immediate restrictions with the implementation of this Executive Order. Curtailment is a tool that the Water Board uses to administer the state’s water rights system. In times of drought and limited supply, the most recent (“junior”) right holder must be the first to discontinue use. However, because of the severity of this drought, even some senior holders of water rights may be curtailed. If dry weather persists, the Water Board will notify certain water rights holders in critically dry watersheds of the requirement to stop diverting water under their water right, based on their priority. The notices and the estimated timing of these curtailments are outlined on the Water Board’s website.

Water Board’s Emergency Regulations to Achieve 25% Conservation

On May 5, 2015 the State Water Resources Control Board approved Emergency Regulations requiring “an immediate 25% reduction in overall potable urban water use statewide in accordance with Governor Jerry Brown’s April 1 Executive Order.”[1] According to the Emergency Regulations, each urban water supplier will be required to reduce total potable water production by a specified percentage, which will cumulatively achieve 25% in water conservation statewide. The Emergency Regulations assign each of the 411 urban water suppliers to one of eight tiers of conservation standards, which span from 8% to 36% conservation. For a list of the water suppliers and their corresponding tiers, please see the State Water Resources Control Board website.[2] A few examples of note include the Riverside Highland Water Company which is in the highest conservation tier and will be required to reduce its water usage by 36%, and the Western Municipal Water District of Riverside which will be required to meet a conservation percentage of 32%. The cities of Riverside, Chino Hills, and San Juan Capistrano will be required to meet a conservation standard of 28%, and the cities of Chino and Ontario are required to meet a conservation standard of 24%. The Irvine Ranch Water District will be required to reduce water use by 16%. Local agencies may adopt more stringent regulations for water conservation. The state may impose a fine of up to $500 per day on local agencies for failure to follow the regulations, and will impose even stricter penalties for water agencies.

Recent Case On Tiered Water Rates

One might think the easiest way to conserve water would be to hike up the price using a tiered rate structure that keeps essential use of water affordable for everyone, but which imposes higher costs on non-essential and wasteful use. But the California Court of Appeal’s recent decision in Capistrano Tax Payers Association v. City of San Juan Capistrano California — Cal.Rptr.3d —, 2015 WL 1798898 (Cal.App. 4 Dist.), on April 20, 2015, brought into focus the difficulty in California of imposing tiered water rates. In a nutshell, Proposition 218 forbids governmental agencies from charging customers more for a service than it costs to provide the service. Thus, water rates must be based upon the actual costs of providing water at various levels of usage rather than pre-determined usage budgets. City officials argued that tiered structures provide an incentive for people to conserve water. Irrespective of the wisdom or need for such a policy, however, the court held that it was simply inconsistent with Proposition 218’s constitutional mandate. The court found the city’s theory was “inconsistent with the Constitution. It would open up a loophole [in the California Constitution] so large it would virtually repeal it.” The court was clear that tiered rate structures are not per se invalid. But the differing tiered rates must be based on the true costs of providing water in increased quantities.

Conclusion

Ultimately, local water agencies are tasked with establishing and implementing water conservation regulations that comport with Governor Brown’s Executive Order. The local agencies’ regulations can be more stringent than those called for in the Governor’s Executive Order. It will be important for real estate investors, developers, and lenders stay abreast of the steps being considered and taken by their local water districts, to ensure water availability and compliance with local water conservation regulations.

May 11, 2015

[1] http://www.waterboards.ca.gov/press_room/press_releases/2015/pr050515_water_conservation.pdf

[2] http://www.waterboards.ca.gov/waterrights/water_issues/programs/drought/docs/emergency_regulations/supplier_tiers_20150428.pdf

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer
Contact
more
less

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.