On Jan. 31, the California Fourth District Court of Appeal upheld a Riverside County Superior Court ruling that the Coachella Valley Water District (CVWD) is required to reimburse to non-agricultural customers a minimum of $17 million.
On March 12, CVWD filed an appeal with the California Supreme Court.
In what has been dubbed “the canal water rates case,” the court found that the water district illegally charged this group more than its agricultural customers for the delivery of water via the Coachella Canal during the CVWD’s 2020, 2021 and 2022 fiscal years. According to the court, the plaintiff, the Howard Jarvis Taxpayers Association (HJTA), established that the water district was charging agricultural businesses $34.32 per acre-foot during these years, while non-agricultural customers—primarily single-family residence customers—were charged $102.12 per acre-foot.
The case is one of three so-far successful lawsuits filed against the CVWD over the last six years by the HJTA that question the propriety of some of the district’s business practices.
Jeffrey Costell, the HJTA’s attorney in each of the three cases, told the Independent that the CVWD could owe residential customers a reimbursement of up to $22 million for the fiscal years of 2020, 2021 and 2022—and since the district has yet to change its canal water rate structure since the lawsuit was filed, the CVWD could owe an additional $9 million or more for improper rates charged from 2023 into 2025, with the number rising by the day.
A second case, referred to as the “State Water Project case,” involves issues concerning the alleged illegal diversion of State Water Project taxes for improper purposes. This case has been determined in the HJTA’s favor by the court, but the damages owed by the CVWD to its customers have yet to be finalized. The HJTA anticipates the water district could owe customers at least $60 million to $90 million for transgressions during the 2020-2022 fiscal years, with an additional $15 million owed for subsequent years.
“The court finds that the SWP taxes collected for (fiscal years) 2020-2022 were not used exclusively for SWP expenditures. SWP taxes levied by the district for purposes other than SWP expenses violate (California) Proposition 13’s one percent cap on taxes,” said the March 14, 2023, ruling by Superior Court Judge Craig Riemer.
The third case, referred to as the “replenishment assessment charge” or “RAC” case, is currently being appealed by the CVWD. It focuses on the CVWD’s alleged improper adoption of Replenishment Assessment Charge Rates, or RAC Rates, for the fiscal years covering 2020-2021, 2021-2022 and 2022-2023. The plaintiff contended that these rates, instead of being billed appropriately as water-service charges to CVWD customers, were improperly collected by the water district through property-tax assessments, in violation of the California’s Proposition 26.
In a ruling issued on Aug. 11, 2023, Judge Riemer ruled in favor of the HJTA. The decision included language enjoining the CVWD from continuing to charge RAC rates similar to those challenged for the fiscal years 2021-2023.
Depending on appeals, the CVWD is now in the unenviable position of potentially owing its customers more than $100 million in reimbursements thanks to the three lawsuits.
Lorraine Garcia, the communication manager and public information officer for the water district, declined to discuss the cases with the Independent, citing to the ongoing litigation.
I studied all I could find on this water co. Prior to moving here in 03.
It stacked up very well against others.
BUT thank goodness for Howard Jarvis’s
Group and the attorneys….
Thank you for a well written info article and a clear picture of what local government can do to us all
Excellent article Kevin,
Once again your excellent writing skills has illuminated more corruption cases against citizens. Bravo for writing this story. I’m really tired of how much corruption there is every where. Greed is a nasty thing. Happens way to often.
Teresa Pierce