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Wonder why your utility rates are going up? It could be an obscure state commission

Sean Earley, general manager of Richvale Irrigation District, checks Baker Canal water levels in April 2015. California special districts blame an obscure state commission for driving water rates higher.
Sean Earley, general manager of Richvale Irrigation District, checks Baker Canal water levels in April 2015. California special districts blame an obscure state commission for driving water rates higher. Sacramento Bee file

As more Californians find themselves facing increased costs for essential household needs, such as water, sewer and electric service, most residents are unaware that an obscure state commission is playing a key role in driving rates higher.

A series of decisions by the Commission on State Mandates is quietly shifting the responsibility of paying for compliance with state laws and regulations to local governments and the families who receive their services.

Voters amended the state Constitution to prevent the state from shifting costs to local governments with Proposition 4 in 1979 and again with Proposition 1A in 2004. As a result, the state must pay for any mandates it forces on local agencies.

Opinion

The Legislature formed the Commission on State Mandates with the exclusive authority to approve and deny claims by local governments requesting reimbursement for the costs of state mandates. But in an exceptionally favorable arrangement for the state, the commission is largely comprised of appointees from the same state agencies that would be forced to write the checks to fund the new mandates.

Over time, the commission has denied reimbursement claims for an ever-increasing number of reasons. In its latest gambit, the commission is seeking to deny reimbursement entirely for any local agency that does not receive property tax revenue — meaning any agency that is primarily funded by its residents through water, sewer or electricity rates.

Neil McCormick.jpg
Neil McCormick

What’s worse, the commission is also proposing that local agencies must first try to pay for the costs of state-mandated programs by holding a Proposition 218 election asking residents to raise rates. Only if the measure fails can the agency then seek reimbursement. If this proposal is approved, Californians who receive services from certain agencies will be forced to pay for state mandates through higher rates.

The constitutionality of these troubling positions is set to be heard Monday by a three-judge panel in California’s Third District Court of Appeal in the Paradise Irrigation District v. Commission on State Mandates case. The case stems from the commission’s denial of reimbursement to local water suppliers that were required to implement “critical” water management practices and mandatory conservation goals by a 2009 state law.

Local governments — including cities, counties and special districts — are hopeful the Court of Appeal will reverse the commission’s new scheme. A ruling otherwise would invalidate the will of the people and force some communities to pay up. Families should not have to choose between sacrificing the quality of their local services, or paying ever-higher local utility rates to fund new state programs they haven’t asked for.

Neil McCormick is CEO of the California Special Districts Association. He can be contacted at neilm@csda.net.

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