Is Paso’s water levy lawful?

October 24, 2008
Pipes framed by backhoe claws await installation for water project in Paso Robles.

Pipes framed by backhoe claws await installation for water project in Paso Robles.

By DANIEL BLACKBURN

An influential statewide taxpayer group views elements of Paso Robles’ proposed water rate increase as unlawful and unconstitutional, and is “strongly” advising city officials to take a different funding path.

Findings of the Howard Jarvis Taxpayers Association (HJTA) lend credence to a position advanced by a local group, Concerned Citizens for Paso Robles (CCPR).

Paso Robles city officials are seeking an additional water supply through the Nacimiento pipeline and related facilities and hope to pay capital improvement costs of $189.6 million over 17 years with proceeds from a steadily escalating water rate. Some critics contend the entire cost of the water treatment utility with debt servicing may exceed $300 million.

City officials presented a pared-down schedule of water payments for users Tuesday, and now will await residents’ reaction to the new plan.

Whether that rate hike is an “assessment,” a “special tax” or a “fee” is at the core of the disagreement. Proponents of the city plan insist the water rate boost is a fee. By applying such a definition, the matter has been decided — to this point — by a simple majority of the governing panel, the city council. An assessment or a special tax must be placed before the local electorate for approval by a two-thirds vote, and Paso Robles officials have not been optimistic that such an outcome could be obtained.

The Sacramento-based HJTA’s Eric Scott Eisenhammer wrote in an October 7 letter to the city council and City Manager James App that his organization “strongly and unequivocally agrees” that the city’s proposal constitutes an assessment, or a special tax.

Controversy surrounds water project funding in Paso Robles.

Controversy surrounds water project funding in Paso Robles.

“California’s state constitution and associated case law is clear in regards to how capital cost of your city’s proposed public improvement projects are funded,” Eisenhammer added. “We strongly advise the city council and manager to implement the capital cost portion of the proposed water rates as an assessment or… tax.”

If the issue ends up in court, it may begin to concern San Luis Obispo municipal water planners, too, because that city is depending on timely delivery of water through the Nacimiento system.

“All project participants have an obligation to pay for Nacimiento,“ said Gary Henderson, San Luis Obispo’s water manager, “so to that degree this (Paso Robles’ ongoing community dispute) bears watching.” Henderson said his city’s Nacimiento water plan encountered some community resistance, also, but that a “very unusual method” of public works funding places the primary cost burden on users.

Members of the Paso Robles group CCPR, in a statement posted on its Web site, argues the rate hike is a special assessment, a “compulsory charge placed… on real property within a predetermined district, made under express legislative authority for defraying in whole or in part the expense of a permanent public improvement.”

John Borst, an officer of CCPR, said only water customers are being asked to pay for the new facilities — with a fee that will produce more revenue each month than is needed to achieve wastewater regulatory compliance.

A 2004 California Supreme Court ruling decreed that “a fee aimed at assisting a utility district to defray costs of capital improvements will be deemed a special assessment from which other entities are exempt.” Such an assessment requires a vote of the electorate.

That ruling sought to clarify portions of the voter-approved Prop. 218, which defines the manner in which a public agency can fund capital costs of public improvement projects.

However, while the issue was still making its way through judicial review, many public agencies in California hustled to make legislative decisions on major public works projects in case the court ruled in favor of voter approval for new assessments or tax levies.

That’s when Paso Robles officials slipped through their controversial water project authorization.

An “assessment,” according to wording contained in Prop. 218, “means any levy or charge by an agency upon real property that is based upon the special benefit conferred upon the real property by a public improvement, the maintenance and operation expenses of the public improvement, or the cost of the service provided.”


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2 Comments

  1. ccn_debate says:

    Member Opinions:
    By: Paso_Guy on 10/29/08
    to mcdave

    all the money in the world won't fix what's wrong with the public school system.

    How is it that the private schools thrive on a much smaller budget? Even when you take the "challanged" out of the equation, the PS sucks

    Money will not change or wipe out the "feel good, competition is Bad" agenda that dominates the PS
    By: paperboy on 10/28/08
    Paso Robles needs to suck it up and bite the bullet and get that water. They already have one drinking water pipeline bypassing their town. They can't afford another one.
    Water bills are the proper way to pay for something like this. If you want to lower your bills, then conserve water.
    Plus the city council needs to make sure that any new construction that comes along pays its fair share, too. That means hiking the hook up and impact fees and the cost for water meters, which I believe they are already doing.
    Residents of Paso Robles have been spoiled for a long, long time. They've never had to invest in a huge water project because they sit on one of the largest underground aquifers in the world. They have prospered with the success of the wine industry, which unfortunately needs a lot of water, without addressing their water needs. Now the time has come to pay the piper.
    They are so fortunate to have Nacimiento so close to the city. It could be a lot more expensive.
    Remember, if the project isn't paid for with water bills, it will be paid for with money needed for police, fire and recreation programs, among others. But it must be paid.
    By: mccdave on 10/28/08
    With all due deference to the Paso Robles Home School of God and the Cholame Creationist Academy, and acknowledging the problem of intractable teacher's unions, California schools were the envy of the nation before Prop 13, now they consistently rank near the bottom.
    By: pismoclam on 10/27/08
    Thankfully we have Prop 13 otherwise the Oinkers (public employees and Dems) would be increasing your taxes four fold to fund their 95% retirement slush. Oh, I forgot,the socialist Marxist Obama is going redistribute your 401k and IRA. Not to worry.
    By: NorthCountyGuy on 10/26/08
    Don't be fooled by the bloated and incompetent bureaucracy of the govt schools. The govt schools are a huge ripoff. Poor education in the govt schools is not being caused by a lack of funding. Taxpayers are being ripped off for billions by the taxpayer robbing Union Thugs running the California Teachers Assn and the National Education Assn. Our taxes are bypassing teachers and classrooms and going directly into the pockets of the Union Bosses. Private Schools and Home Schooling is doing a far better job for a fraction of the cost.
    By: mccdave on 10/26/08
    The decline of California schools can be directly linked to Proposition 13. People wring their hands over bad schools, but they won't pay for them.
    By: Gsan on 10/25/08
    Gee … Broad***,

    I enjoyed that I can predict when I purchased my home what that taxes would be. I also enjoyed downscaling the bureaucrats thereafter.
    By: davidbroadwater on 10/25/08
    UncSLO believes "Howard Jarvis… lend[s] credence to… CCPR"?!?!?! Ridiculous.
    Jarvis' organization hasn't had any credibility for 30 years, since it conned voters into passing Prop. 13 in 1978. Prop. 13 has shifted the bulk of the property tax burden off of commercial property and onto homeowners. While it capped increases in property taxes, providing some stability in assessments, due to the relatively higher rate of turn-over in residential property, the property tax burden on owners of commercial property (the forces behind Prop. 13) has incessantly decreased. This has hobbled the ability of local governments and schools districts to provide services and placed unfair pressure on homeowners. Prop. 13 was a scam designed to do just this, while the corporate welfare queens laughed all the way to the bank.
    To the degree that UncSLO tries to "lend credence" to the Jarvis snake-oil merchants, it diminishes its own credibility.

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  2. ccn_debate says:

    By: Booty_Juice on 10/25/08
    Yet more bs.

    I guess you gotta post up something even if there are no new developements with regard to north county inbred swindles or window tinting violations.
    By: stopthebs on 10/25/08
    Once again CCN has it out for Paso Robles. Never look at the whole story, just "report" on what they want to hear.
    By: R.Hodin on 10/25/08
    Ouch!
    By: Inquiry on 10/24/08
    Totally wrong! Misrepresents reality! You've been told only HALF the story, didn't check it out, and have swallowed a total misrepresentation by your manipulative source. I guess that's what "blogs" do?! Too bad you think so little of your own credibility.

    The letter you quoted was sent to Borst for delivery to the City. He withheld it for 10 days in order to create a situation and you've fallen into his trap. Not so the city.

    The City Attorney responded to the letter when it was delivered 10 days LATE, thanks to CCPR's manipulation! (This is a "responsible" group?)

    The Howard Jarvis Taxpayers Association (HJTA) sent a reply email almost immediately after receiving the city attorney's fax. Both communications were also provided to, whom I assume is, your source. I'd bet they, or he, didn't tell you about that!?

    Here it is in its ENTIRETY(Emphasis added): "Ms. Yang,
    "I just wanted to reply to the fax you sent to our office. I apologize that you had not received my letter earlier. I had faxed it on the day I wrote it to the Concerned Citizens for Paso Robles and was under the understanding that they were going to forward it – they later asked me to send a hard copy, but I wasn't aware that it had not been forwarded previously. I was asked by one of CCPR's members to write a letter after reading the document THEY prepared, however YOU ARE CORRECT that IT IS MY UNDERSTANDING AS WELL that my letter ONLY expresses how HJTA BELIEVES capital expenditures SHOULD be funded VS. how they MUST be funded. I apologize for any confusion, and I hope this clarifies things.
    "Thank you,
    "Eric Scott Eisenhammer
    "Howard Jarvis Taxpayers Association"

    I wonder how cordial the relationship between CCPR and HJTA will be now that HJTA has learned how they were "used" by CCPR? How do YOU feel now that you know how YOU'VE been 'used" by them?

    Their arguments do not stand up to the State Constitution Article XIIID, section 4(c), (d) and (e); AB 1260 (Caballero) Chapterd 280 of Statutes in 2007; or the theories of water rates, charges and procedures following Rossi or Bighorn-Desert View Water Agency v. Verjil. To save space I won't quote them.

    The City of El Paso de Robles is doing everything by the book and in the best interests of the city and its citizens.

    Go try to mess with people's minds in Los Osos. Leave the excellent government of Paso Robles alone.

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