Brydon v. East Bay Mun. Utility Dist.

• Decision Date: 18 April 1994
• Docket Number: No. A060031,A060031
• Citation: 24 Cal.App.4th 178,29 Cal.Rptr.2d 128
• Court: California Court of Appeals Court of Appeals
• Parties: Charles W. BRYDON et al., Plaintiffs and Appellants, v. EAST BAY MUNICIPAL UTILITY DISTRICT et al., Defendants and Respondents.

Page 128

29 Cal.Rptr.2d 128

24 Cal.App.4th 178

Charles W. BRYDON et al., Plaintiffs and Appellants, v. EAST BAY MUNICIPAL UTILITY DISTRICT et al., Defendants and Respondents.

No. A060031.

Court of Appeal, First District, Division 2, California.

April 18, 1994.

Review Denied July 14, 1994.

Berding & Weil, James O. Devereaux, Alamo, for plaintiffs and appellants.

Dianne K. Barry, Nancie Ryan, Verna P. Bromley, Office of Gen. Counsel, East Bay Mun. Utility Dist., Oakland, for defendants and respondents.

Arthur G. Kidman, Janet R. Morningstar, McCormick, Kidman & Behrens, Costa Mesa, for amicus curiae Ass'n of California Water Agencies.

HODGE, ^* Associate Justice.

Appellants are customers of respondent East Bay Municipal Utility District (the District) who seek to invalidate the water rate structure design enacted by the District in April 1991 as part of a comprehensive Drought Management Program. Appellants petitioned for writ of mandate and sought declaratory and injunctive relief. The petition alleged: (1) the inclining block rate structure at issue constitutes an invalid "special tax" in violation of article XIII A, section 4, of the California Constitution; (2) the adoption of the rate structure was arbitrary, capricious and not rationally related to any legitimate legislative or administrative objective; and, (3) the rate structure unreasonably discriminates against customers "residing in the hot climate areas east of the Berkeley-Oakland hills."

Appellants claim on appeal that the trial court erred in denying the petition and issued an inadequate statement of decision.

FACTUAL & PROCEDURAL BACKGROUND

The District is a public agency created pursuant to the Municipal Utility District Act (Pub.Util.Code, § 11501 et seq.) and governed by an elected board of directors. The board determines all questions of policy including the establishment of water rates. (Pub.Util.Code, § 12809.) The District supplies water to over 1.1 million residents in portions of Alameda and Contra Costa Counties. Ninety-five percent of the District's water supply is obtained from the Mokelumne River's 575-square mile watershed on the western slope of the Sierra Nevadas. The District's diversion of this water to the Bay Area occurs at Pardee Reservoir on the Mokelumne River. Further downstream is the Camanche Dam and Reservoir. The Since the District water supply from the Mokelumne River is subject to the entitlements of other users, the District relies on the storage capacity of the two reservoirs to make the river's yield more dependable. Storage in Camanche Reservoir is used to meet the District's downstream obligations, including releases for irrigation, stream flow regulation, flood control, fishery needs, and the senior rights of other riparian and appropriative entitlements.

combined storage of the Pardee and Camanche reservoirs is approximately 641,000 AF (acre-feet). ¹

Storage capacity is essential to the District's operation. In dry years the runoff from the Sierra foothills is less than needed to meet demand and the District must use storage from prior years. In extended critical dry periods such as the historical 1976-1977 drought and the 1986-1992 drought, the existing storage capacity on the Mokelumne River is not sufficient to supply all normal consumptive and in-stream needs.

The District conveys water stored in Pardee Reservoir to the Bay Area through three 82-mile long pipelines. Five terminal reservoirs are maintained within the East Bay. These reservoirs are used: (1) to re-regulate the District's Mokelumne River supply in the winter and spring, when Sierra runoff occurs and for uses during the high demand period of the summer months; (2) as emergency standby in case of extended drought or damage to the tunnels, pumping plants, or the aqueducts which cross delta areas that are vulnerable to flooding and earthquakes; (3) to store local runoff and, (4) for environmental and recreational benefits.

Rapid population growth and uncertain climatic conditions have required the District to seek additional sources of water supply. Currently the District has a contract with the U.S. Bureau of Reclamation for 150,000 AF per year of American River water to be diverted at the Folsom Dam and transported through the Folsom South Canal, the major portion of which has yet to be constructed. The District is required to pay substantial annual fees for maintaining the contract rights to the American River water. Other water supply options include the construction of Bay Area dams and reservoirs and the transfer of American and Mokelumne River water for storage in underground aquifers in San Joaquin County. The various options under consideration are in response to the increasing demands for water. The anticipated costs of these additional sources substantially exceed the costs of present supplies.

From 1986 to 1992, Northern California experienced extreme drought conditions which challenged the capacity of the District to guarantee sufficient water for "human consumption, sanitation, and fire protection." (WATER CODE, § 350. )²

On April 9, 1991, the District adopted Resolution No. 32473 which created the "Drought Management Program for 1991." Reciting that "five consecutive dry years have resulted in limited availability of water to meet the needs of consumers ...," the resolution prohibited enumerated "wasteful uses of water" ³ and further imposed an inclining block rate structure deemed "necessary to conserve the water supply for the greatest public benefit."

An inclining block rate structure imposes higher charges per unit of water as the level of consumption increases. Effective May 1, 1991, the District's inclining block rate structure for single family residential customers was as follows:

                          Gallons Per Day              Price Per CCf"748 Gallons
                              0 to 250                           $ .91
                            251 to 750                             .99
                            751 to 1200                           1.50
                             Over 1200                            3.00
                

Effective June 11, 1991, the rate structure was modified as follows:

                          Gallons Per Day              Price Per CCf"748 Gallons
                              0 to 250                           $1.05
                            251 to 750                            1.30
                            751 to 1200                           1.97
                             Over 1200                            3.94
                

Resolution No. 32473 provided for hardship, health and safety exceptions for those consumers adversely affected by the rate structure.

In support of the Drought Management Program, Resolution No. 32473 set forth 27 findings, including the following:

"1. For the fifth consecutive year, precipitation and runoff have been below normal in the Mokelumne basin, which produces 95% of the District's water supply. Precipitation as of April 1, 1991 has totalled 27 inches, which is 64% of the amount normally received by this time.

"2. As of April 1, 1991, total water storage in the District's Mokelumne and East Bay Reservoirs is 54% of capacity, compared to 66% of capacity for the same time last year, and 66% of the amount of water stored under average conditions.

"......

"4. On March 22, 1988, the Board of Directors, acting pursuant to Water Code section 350 et seq., declared a Water Shortage Emergency Condition in light of reports that runoff was projected to be 160,000 AF if conditions after April 1 remained dry. As a result of said Declaration, and in view of data presented concerning availability of water to meet demand, the Board determined that an overall 25% curtailment in total water use (32% for single family residential customers) was required and, in order to achieve this goal, adopted a Drought Management Program which placed restrictions upon the use of water, and which also included revenue-neutral inclining drought rates for all customers. The Program adopted by the Board successfully accomplished the objective it was implemented to achieve, and resulted in a greater than 25% curtailment in overall water use.

"5. On May 9, 1989, in light of evidence that total system storage was only 50% of capacity, total runoff for the 1988-89 water year was projected to be 580,000 AF, and total water storage was projected to be 463,000 AF on September 30, 1989, 162,000 AF less than average, the Board determined that the District's water supply had not been fully replenished, and that the Water Shortage Emergency Condition should continue and a Drought Management Program, including inclining drought rates, be adopted to achieve an overall 15% curtailment (19% for single family residential customers) in total water use. This Program was also successful and resulted in water savings in excess of the 15% goal established by the Board.

"6. On September 12, 1989, based upon information that precipitation and runoff conditions, combined with water savings from the Drought Management Program, would result in the District's water supply on September 30, 1989 being 74% of average, the Board of Directors determined that the water shortage emergency period had ended and adopted a voluntary water conservation program with the objective of reducing water consumption by 15%, which savings would provide a buffer in the event of a fourth dry year.

"7. On February 26, 1991, based upon a thorough review of precipitation and runoff data, as well as projected storage conditions, the Board converted the 15% voluntary conservation program into a 15% mandatory conservation program, and after a duly noticed public hearing, amended the District's regulations regarding water use during this time of shortage.

"......

"9. In light of data presented by staff concerning availability of water to meet demand, the Board hereby finds that a 15% curtailment in total water use after May 1, 1991 would help to ensure that sufficient water will be available to meet the needs of the District's consumers in the event of a sixth...