San Juan Capistrano

Court Rules Tiered Water Billing Illegal

By Kim Lefner

On August 6, San Juan’s water rates were declared illegal under Proposition 218.  Superior Court Judge Gregory Munoz ordered the City to abandon its current water rate structure and base all rates on cost of service in conformance with the California Constitution....

The Court also entered a judgment restraining the City from collecting water fees from residents for recycled water that they do not actually use and which is not immediately available to them. Judge Munoz based his ruling on a section of the California Constitution that deals with “Waste of Taxpayer Funds”.

Capistrano Taxpayers Association (CTA) attorney Ben Benumof said of the ruling, "Ultimately, we always believed that our case was simple, straightforward, and technically sound. The City has never provided any cost-based data to support Tiers 2, 3, and 4, which the City admitted at trial are, in fact, penalties. This is truly a win for the taxpayers, supported by the letter and the spirit of Proposition 218."

When asked if this means water costs will increase to support the expense of running the Ground Water Recovery Plant, CTA Board member John Perry stated, “Not if the city purchased the water from the cheapest source. Even with the construction bond payment for construction of the water plant, we would still pay less for Metropolitan Water District [MWD] water than what we currently pay to produce ‘our own’ water.”

Data indicates that the average monthly water bill in San Juan is $68.53 for a small lot whereas Santa Margarita Water District’s monthly water bill for a small lot is $40.22, a difference of 41.3%. This is because Santa Margarita buys 100% of its drinking water from the MWD.

The City and several council members claim that they are forced to adopt higher “conservation rates” to meet a 2020 deadline for a 20% reduction in water usage. But let’s look at the facts concerning the city’s progress toward meeting that goal.

The baseline for San Juan established in 2009 was 221 gallons per day per resident. The 2011 water consumption for San Juan was reportedly 182 gallons per day per resident; a reduction of 18% in two years. Contrary to the city’s claims about the need to bill more to force water conservation, the demand for water is falling because the base cost of water in San Juan is so expensive that residents are cutting back to reduce their water bills. San Juan water rates are among the most expensive in Orange County mainly due to the veracious appetite the Ground Water Recovery Plant (GWRP) has for money.

“…The City’s claim that they need to financially punish water users into conserving water is nonsense; it’s all about the money. The city needs money and lots of it to continue operating the hugely expensive and unnecessary water plant”, opined CTA Board member John Perry. The way to get people to conserve is to provide water credits to those who use less than allocated, insists Perry. “Efficient managers learned long ago that it is better to reward good behavior than to punish bad behavior; the carrot always works better than the stick,” said Perry, a retired manager.

All indications are that city staff is working on a new rate increase that will undoubtedly be high in order to recover legal fees the city incurred in its fight against its residents, and to fund payroll costs while continuing to expand the water plant.

Payroll for the 21 employees in the Utilities Department averages $129,800 per employee; $62.50 for each hour of work. Total compensation for all utility department employees increased 11.3% from 2011 to 2012 due to hourly wage, pension and medical insurance increases. “The costs of the water plant will continue to climb because of electricity rate increases and maintenance plus repairs - with no end in sight,” said Perry.

Asked what residents can do, Perry stated that since the city is now forced to base its rate structure on cost of service, the community must become engaged during the public hearings that will ensue. He suggested that residents ask hard questions about how much the water plant costs to run, whether it’s worth the tremendous financial burden and whether residents are willing to pay more for water to support it. “We also need to elect council members who are sensitive to the burden that the city’s water department is placing on the consumers,” he added. “Elections have consequences.

The CCS will keep you updated on the water rate issue. In the meantime, you can voice your opinion about the water rates by emailing your city council members c/o: .


Anonymous said...

Dear Common Sense,

Does anyone know if we can get a refund of the over-charges on our water bills? Or, what the process is for doing that? We have been billed in the higher tiers for years and by our estimates, we would be owed quite a bit by the water company.


San Juan resident

Anonymous said...

Thanks to all of those who fought this battle. For the last few years my water bills have been way too high. I have friends in Laguna Niguel and their water isn't nearly as high as ours here in SJC, I knew something was wrong.

I too would like a refund on the overbilling. I'll be interested to hear what residents can do to get a refund. Thanks for keeping us informed.

Anonymous said...

Not sure how this mess started but for the past couple of yrs my bills have been really high. I hope this court decision puts an end to the unreasonable cost of water

melissa kaffen said...

Excellent summary! I'm still not sure if the ruling means the City may not charge SJC ratepayers more than the MWD going rate? And, when can we expect a roll back in the upper tier pricing?

Anonymous said...

i paid my +$1000.00 water bill for the month of Aug... i'd love to hear that i'm entitled to a refund!

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