Background: Misuse of Assessments and Fees Brought on Prop 218, which Took Down the Tiered Water Fee Plan
San Juan Capistrano’s water fee usage plan ran afoul of Proposition 218’s taxpayer shield to protect taxpayers from being charged taxes disguised as fees and assessments. The goal of the tiered water plan was designed as a financial punishment for those who use excessive amounts of water. However, the method the city chose violated Proposition 218, which was aimed at preventing governments from using assessments and fees to avoid asking the people for a vote on increased taxes. I was a proponent of Proposition 218.
The 4th District Court of Appeal struck down San Juan Capistrano’s tiered water fee plan because it violated Proposition 218’s restriction that any fee must be for the cost of service and no more. The court found that by creating a 4-tier fee plan that charged $2.47 per unit for first tier water usage up to $9.05 a unit for greater usage the plan was not based on the cost of the water service.