The Fourth District Court of Appeals recently issued a decision in the case “Capistrano Taxpayers Assn v. City of San Juan Capistrano.” The case involved a challenge to a rate structure adopted by the City of San Juan Capistrano.

While this court case has attracted much attention, the court ruling did not invalidate tiered rate structures. The court simply affirmed that to be in compliance with Proposition 218 each price tier must be based on the water district's cost of service. The IRWD budget based conservation rate structure complies with these requirements. 

In addition, while the case is fact-specific to San Juan Capistrano, the clarity provided by the court will be helpful to water agencies in ensuring that their rate structures conform with the requirements of Proposition 218.  As we continue to review the decision, we will evaluate any potential impacts to IRWD.

The timing of this decision coincides with California experiencing record drought conditions. The Irvine Ranch Water District understands the importance of preserving California’s water supplies, especially in times of drought, and has taken many steps to encourage water use efficiency. The IRWD budget based rate structure promotes water efficiency and is based on the cost of service; is equitable and fair; promotes sustainable behavior change; has shown to be effective in reducing water use; and is supported by Governor Brown in his Executive Order on Water Restrictions issued on April 1, 2015 that calls on water agencies throughout California to implement structures that promote conservation. IRWD’s budget based rate structure has been recognized by the State Water Resources Control Board for producing superior water savings and is an approved alternative approach for compliance with current California Drought Emergency Conservation Regulations.

Please click here to read our technical briefing paper as well as the water savings results produced by the IRWD budget based rate structure .