Judge declares Palmdale water rate hike legal

By ALISHA SEMCHUCK
Valley Press Staff Writer

After tentatively siding last month with Palmdale city officials who questioned the rate hike's legality, Judge Conrad Aragon concluded the hike met state requirements that public agencies' water charges be proportional to the cost of providing the service.

In a 15-page document dated March 12, Aragon wrote he originally found "an absence of evidence that individual user accounts are, in fact and not only in theory, based upon individually derived water budgets."

But Aragon wrote, the water district attorney was "able to direct the court's attention to specific provisions in the administrative record, which commit the district to individualized determinations of water budgets for each consumer. This concern having been addressed, the court now concludes that the rates should be, and are, validated."

The court document goes on to state that the city and other parties involved in the legal action against the water district can submit their own statements with findings and conclusions by March 26.

Palmdale city officials filed the lawsuit - one of several between the city and the water district - in May, when the water district board voted 3-2 for a rate increase that would boost the basic monthly meter charge more than 100% immediately and another 55% within five years. In addition, the rate increase would boost consumption charges by up to 289% by 2014.

Aragon wrote the ultimate issue to be determined was whether the water district's new rate plan was based upon substantial evidence.

In making that determination, he said he reviewed administrative records the water board members used when they voted on the new rates. Those administrative records contained meeting minutes, reporter's notes of public hearings, comments by members of the public and the board, comments by the district's water rate expert consultants and a series of written reports.

City officials said Wednesday they were disappointed in the judge's decision and are considering their next steps, including appealing it.

"The decision in the validation action … was the first of two cases where the city of Palmdale is contending that PWD violated the California constitution, Proposition 218, the Right to Vote on Taxes Initiative, when it adopted its new, excessively high water rates last May," wrote John Mlynar, the city's communication manager.

"In this validation action, the court prohibited the city from introducing any evidence beyond the limited administrative record, and in reaching its decision, relied only on information provided by the PWD," Mlynar wrote.

"The city will aggressively pursue actions to set aside the district's illegal rates, both in appellate and superior courts," city Attorney Matt Ditzhazy said.

"The city of Palmdale is disappointed in the decision and believes that it is contrary to state law and the California constitution," Ditzhazy said. "We will continue to actively prosecute the other lawsuits between the city and Palmdale Water District," he added, referring to three or four other related cases.

Water district officials felt some relief from the latest decision.

"It's good to see that the judge was able to understand the concept of the water budget system because it is more fair to our customers than the prior system," district General Manager Dennis LaMoreaux said.

"It does adjust according to what (customers') needs are," LaMoreaux said. "The district staff will continue to seek ways to adjust the formula to improve it."

Water board President Gordon Dexter said the judge was "OK with all the Prop. 218 stuff."

Prop. 218 is a state law requiring property-related utilities such as water and sewage services to conduct public hearings before implementing rate increases.

If more than half the taxpayers or residents within the boundaries of the utility's service area oppose a proposed rate hike, the agency cannot adopt it.

Dexter said the judge didn't initially understand how the rate structure was set up.

"He didn't realize that rates were set up in proportion to the consumer's property (size). He now sees that the water budget is individualized for each consumer," Dexter said. "It's good news."

Still, Dexter said, "the way I see it, there's no winners or losers here. These lawsuits cost a lot of money to our ratepayers and the residents of Palmdale. I would hope from this point on, that we could dispense with some of these legal actions, and I could move forward to do the job that the ratepayers hired me to do."

"Specifically, I'm referring to bringing the water rates down," Dexter said. "Clearly the ratepayers have spoken their mind in the election," he said, referring to his win in November over incumbent Dick Wells. "I'm determined to do what I promised."

asemchuck@avpress.com