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Ruling Against Tiered Water Rates Puts 'Straitjacket' On Local Government, Brown Says

SANTA ANA ( — A California appeals court has ruled that San Juan Capistrano's tiered water rates are unconstitutional.

The 4th District Court of Appeal ruling Monday could have broader implications for other cities that use similar pricing structures to encourage conservation.

The ruling upholds an Orange County judge's decision that found that charging the biggest water users higher rates violates Proposition 218, a voter-passed law that prohibits government agencies from charging more than the cost of a service.

"I'm delighted that the matter has produced a victory for ratepayers in San Juan Capistrano," said James Reardon via Skype.

Reardon is the San Juan Capistrano resident who filed the lawsuit with other taxpayers four years ago. He said the ruling levels the playing field so everyone will have to conserve.

"I don't think that the tactic of raising water rates to a very small number of people will really achieve any meaningful conservation. Conservation is achieved by raising water rates to everyone," he said.

San Juan Capistrano charged nearly four times as much per unit of water for the highest users to encourage conservation.

Residents complained the higher rates were arbitrary and unfair.

But U.C. Riverside Environmental Economist Ken Baerenklau, who studied the tiered water-rates system, says the ruling could be a setback to Gov. Jerry Brown's drought-relief plan since it uses higher prices to discourage more water use, which has worked effectively but has now been banned.

"It's unfortunate because as our studies showed it looks like these rate structures are effective at reducing demand and also doing so in an equitable manner," Baerenklau said. "Households that are using relatively more water ... those households appeared to be the ones who reduced consumption the most."

Brown recently issued drought orders that called on local water agencies to implement tiered water pricing to help save water.

Brown said the ruling puts a "straitjacket" on local governments trying to use pricing tiers to conserve water statewide.

In a statement, Brown said:

"The practical effect of the court's decision is to put a straitjacket on local government at a time when maximum flexibility is needed. My policy is and will continue to be: Employ every method possible to ensure water is conserved across California."

But attorneys Ben Benumof and Mike Hensley, who won the case, say the tiered water-pricing system is not dead but will simply have to be based on the district's actual cost of water and not on an arbitrary system of punishment for those who use more water.

"This is really pretty simple. If there are higher costs involved with additional units of water, then rightfully so, that additional cost should be passed on to the ratepayer," Benumof said.

On Monday night, water districts across California were evaluating the court's ruling, including the LADWP, which told CBSLA it is consulting with the city attorney.

(TM and © Copyright 2015 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2015 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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