Water utility customers brought putative class action against municipal utility district alleging that the tiered-rate water structure used by the utility to determine the cost of residential and commercial water service in two counties violated Proposition 218’s procedural and substantive limitations on a local agency’s ability to extend, impose, or increase property-related fees for services.
The Superior Court sustained utility’s demurrer without leave to amend. Customers appealed.
The Court of Appeal held that:
- The complaint sought to invalidate utility’s rate structure, and did not merely seek refund of excess fees, and thus was subject to 120-day limitations period;
- The limitations period did not run anew when, each month, the utility collected the allegedly illegal tax; and
- The Government Claims Act did not extend the 120-day statute of limitations applicable to customers’ claims.
Water utility customers forfeited any claim that the tiered-rate water structure used by municipal utility district to determine cost of residential and commercial water service violated Proposition 218, which imposed procedural and substantive limitations on a local agency’s ability to extend, impose, or increase property-related fees for services, by misusing revenues for a purpose other than providing service, where customers’ complaint set forth no factual allegations specific to the alleged section misuse of funds claim, and they failed to develop any pertinent arguments in their briefing on appeal of superior court’s decision to sustain utility’s demurrer, including any explanation for their position that an inverse validation was inapplicable.
Water utility customers putative class action complaint, which alleged the tiered-rate structure used by municipal utility district determine cost of residential and commercial water service in two counties violated Proposition 218’s limitations on local agency’s ability to extend, impose, or increase property-related fees for services, sought to attack, review, set aside, void, or annul utility’s rate structure, and did not merely seek refund of excess fees, and thus, customers’ claims were subject to 120-day limitations period; complaint framed the claims as an attack on tiered-rate pricing, alleging the constitutional infirmities of this structure gave rise to partial refund claims, and effect of customers’ allegations, if true, would be to invalidate the tiered-rate fee structure.
Provision of Proposition 218 stating that all fees or charges shall comply with the section imposing procedural and substantive limitations on a local agency’s ability to extend, impose, or increase property-related fees for services, does not authorize a new challenge, subject to a new statute of limitations, with the assessment and collection of fees each month; the provision merely requires that all fees, existing at the time Proposition 218 was approved, be brought into line with the substantive requirements of the section.
The 120-day limitations period applicable to water utility customers’ putative class action complaint alleging the tiered-rate structure used by municipal utility district to determine cost of residential and commercial water service in two counties violated Proposition 218’s limitations on local agency’s ability to extend, impose, or increase property-related fees for services, did not run anew when, each month, the utility collected the allegedly illegal tax; the complaint challenged the validity of the utility’s resolution adopting service fees, and there was no ongoing statutory obligation the district had to fulfill after it adoption the resolution.
Assuming notice was required under the Government Claims Act for water utility customers’ claims alleging the tiered-rate structure used by municipal utility district to determine cost of residential and commercial water service in two counties violated Proposition 218’s limitations on local agency’s ability to extend, impose, or increase property-related fees for services, any time requirements imposed by the Claims Act did not extend the 120-day statute of limitations applicable to customers’ claims, because the gravamen of their complaint was a challenge to the tiered-rate structure adopted by the utility through resolutions.