Judge denies use of referendum by Yorba Linda residents to avoid water rate hike

Orange County Superior Court Judge Robert J. Moss denied a suit by Yorba Linda (Orange County, CA) residents opposed to a $25 monthly water-rate increase levied on them by their local water district. The Yorba Linda Water District (YLWD) has said that without the increase the district would have faced at least an $8 million shortfall in revenue because of current water-use restrictions.

When the Yorba Linda Taxpayers Assn. (YLTA) failed in their traditional attempts to overturn the increase they submitted a referendum demanding that YLWD either retract the new rates or place them on a ballot for local voters. When YLWD rejected the referendum – claiming it was not legal under current laws – local residents filed a lawsuit in January asking the court to force the water district to abide by the referendum.

The issue has been waged for several years. Many other California water agencies have watched the case from afar wondering whether the outcome of the lawsuit would affect their needs, whether current or anticipated, to raise their rates. If Yorba Linda’s residents were able to use a referendum to avoid a rate increase, would other district’s ratepayers resort to similar actions causing water district revenue instability, default on debt obligations and potential bankruptcy.

But Judge Moss, in ruling in favor of YLWD’s rate increase, pointed to the state’s protracted drought saying the increase was properly executed. In his order Judge Moss wrote that the water rates were “passed as an urgency measure enacted to avoid severe constraints on the district’s ability to meet its fixed financial obligations during the current severe drought.’

Ric Collett, the water district’s president, stated that the judge’s ruling supported the YLWD board’s action to increase water rates.

“The actions that we took as a board were needed in order to maintain the financial security of the district,” he said. “It was a very good decision on our behalf.”

But Ed Rakochy, spokesman for YLTA, said he was “very disappointed” by the judge’s decision.

“The judge missed the constitutional argument that the voters have a right to a referendum,” said Rakochy. “There’s no hard evidence that this was an emergency measure. It wasn’t even passed as an emergency measure.

“In my humble opinion, I don’t think the judge wants to rock the boat… This is a safe decision. He can sit there and claim, ‘Hey, we were in a drought.’”

Water districts throughout the state have been grappling with both the four-plus year drought as well as mandatory water conservation. Both issues have driven water use down and water districts have watched their revenue drop as well. Though California is no longer enforcing state-wide mandatory water conservation, certain water use restrictions still apply and voluntarily water conservation has become the state’s mantra and practice in many, if not most, areas. Budget deficits have caused water districts to look to rate increases as a way to cover their fixed obligations.

The Yorba Linda Taxpayers Assn. has said they do not want to impede the YLWD’s operations but that a rate increase should be a voter’s decision. They feel the rate increase was a hasty decision and the increase was excessive.

Kent Ebinger, lead plaintiff for YLTA, claims that, “…the judge missed the argument regarding our right of referendum in this case, and I am outraged at his decision. The district’s rate increase was never legally positioned as an urgency measure.”

Judge Moss wrote in his order that “while voters have a right to challenge legislative enactments through the referendum process, that right is not unlimited. He noted that the California Constitution “specially precludes certain types of legislative enactments from the referendum process. Namely, statutes that are urgency statutes.”

Meanwhile, the YLTA also filed petitions to recall two members of the water district. The Orange County registrar of voters qualified that petition on Thursday. The petition seeks to recall board members Robert Kiley and Gary Melton during the upcoming November election. Additionally, two other seats on the five-member district board will be up for election and on the November ballot.