Two new Proposition 218-related cases published in March come to opposite conclusions in determining whether groundwater extraction and replenishment fees are “property-related” fees subject to Article XIII D of the California Constitution (Proposition 218). Given the conflicting appellate decisions and the tremendous concern over groundwater overdraft statewide, this issue is ripe for California Supreme Court review. The need for certainty over how to classify groundwater extraction fees is particularly acute given the financing authority groundwater sustainability agencies (GSA) now have under the new groundwater management legislation. (See Wat. Code §§ 10730 et. seq.)
On March 26, 2015, the Sixth Appellate District affirmed its prior precedent, opining that the Santa Clara Valley Water District’s (SCVWD) groundwater extraction fee is a property-related fee under Art. XIII D, and is a fee imposed for water service and thus exempt from voter ratification. (Great Oaks Water Co. v. Santa Clara Valley Water District, No. H035260, 2015 WL 1403340 (Ca. Ct. App. Mar. 26, 2015)) The court’s reasoning is consistent with its prior decisions in Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 1364 and Griffith v. Pajaro Valley Water Management District (2013) 220 Cal.App.4th 586. A multimillion-dollar judgment against SCVWD was reversed because the appellate court found that SCVWD had met its burden under Proposition 218 in justifying its groundwater extraction fees.
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