The Fourth District Court of Appeal in California has released a decision regarding the procedural requirements of Proposition 218 as applied to water rates. The case is Morgan v. Imperial Irrigation District, Case Nos. D060146 and D061087, and while the decision is currently unpublished, it is likely that publication will be requested by one or more interested agencies in the near future.
Over the past decade, urban water utilities in California have sought to adopt rate structures that combine, to the extent possible, the goals of financial stability and incentives for efficient water use. This is often accomplished through shifting a relatively larger proportion of costs from fixed service charges to variable commodity rates, dividing commodity rates into multiple tiers with each tier for higher use bearing a higher rate, and disincentivizing the use of urban water supplies for irrigation. A recent California Court of Appeal case, City of Palmdale v. Palmdale Water District, Case No. B224869, tested the intersection of such rates with the primary restriction on public agency water rates, Proposition 218. The result: a moderate collision, with potential for a future pile-up.