Griffith v. Pajaro Valley Water Management Agency

Filed 10/15/13
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

HAROLD GRIFFITH, H038087
(Santa Cruz County
Plaintiff and Appellant, Super. Ct. Nos. CV168936, CV168080)

v.

PAJARO VALLEY WATER
MANAGEMENT AGENCY,

Defendant and Respondent.

JOSEPH P. PENDRY et al., H038264
(Santa Cruz County
Plaintiffs and Appellants, Super. Ct. Nos. CV168936, CV168080)

v.

PAJARO VALLEY WATER
MANAGEMENT AGENCY,

Defendant and Respondent.

After defendant Pajaro Valley Water Management Agency enacted ordinance No.
2010-02 that increased groundwater augmentation charges for the operation of wells
within defendant‟s jurisdiction, plaintiff Harold Griffith challenged the ordinance on the
grounds that the increase (1) was procedurally flawed because it was not approved in an
election required by Proposition 218 (Cal. Const., art. XIII D, § 6),1 (2) did not conform
to certain substantive requirements of Proposition 218, and (3) was to be used for a

1
Further unspecified section references are to the California Constitution, article
XIII D.
purpose not authorized by the law under which defendant was formed. Thereafter,
plaintiffs Joseph Pendry, James Spain, Yuet-Ming Chu, William J. McGrath, and Henry
Schepeler (Pendry) challenged the ordinance on similar grounds and on the ground that it
was void because one of the directors who voted for the ordinance had a disqualifying
conflict of interest within the meaning of the Political Reform Act (PRA) (Gov. Code, §
87100 et seq.).2 They also challenged an ordinance passed in 2002, which imposed an
augmentation charge, and a 1993 management-fee ordinance. The trial court rendered
judgments for defendant. Plaintiffs have appealed and reiterate their challenges. We are
considering the two appeals together for purposes of briefing, oral argument, and
disposition. After conducting an independent review of the record (Silicon Valley
Taxpayers Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th
431, 448 (Silicon Valley)), we affirm the judgments.
GENERAL BACKGROUND
We have previously detailed an historical background to this case in Pajaro Valley
Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 1364, 1370-1375
(Amrhein). We therefore decline to repeat it and will instead begin with the trial court‟s
succinct summary.
“The Pajaro Valley Groundwater Basin supplies most of the water used in the
Pajaro Valley. The water is being extracted faster than it is being replenished by natural
forces, which leads to saltwater intrusion, especially near the coast. Once the water table
drops below sea level, seawater seeps into the groundwater basin. [Defendant] was
created [in 1984 by the Pajaro Valley Water Management Agency Act (Stats. 1984, ch.
257, § 1 et seq., p. 798 et seq., Deering‟s Wat.--Uncod. Acts (2008) Act 760, p. 681
(Act))] to deal with this issue. At present, the strategy is to use recycled wastewater,
supplemental wells, captured storm runoff, and a coastal distribution system. The

2
Plaintiffs also asserted other grounds that they do not advance on appeal.

2
purpose is to reduce the amount of water taken from the groundwater basin (for example,
the amount taken from wells), by supplying water to some [coastal] users. The cost of
this process is borne by all users, on the theory that even those taking water from [inland]
wells benefit from the delivery of water to [coastal users], as that reduces the amount of
groundwater those [coastal users] will extract [from their own wells], thereby keeping the
water in [all] wells from becoming too salty.”
Ordinance No. 2010-02 describes “three supplemental water projects that work
together to provide supplemental water to reduce overdraft, retard seawater intrusion, and
improve and protect the groundwater basin supply: (1) Watsonville Recycled Water
Project, which provides tertiary treated recycled water for agricultural use and includes
inland wells that are used to provide cleaner well water that is blended with the treated
water in order to improve the water quality so that it may be used for agricultural
purposes; (2) Harkins Slough Project, which diverts excess wet-weather flows from
Harkins Slough to a basin that recharges the groundwater, which then is available to be
extracted and delivered for agricultural use; and (3) Coastal Distribution System („CDS‟),
which consists of pipelines that deliver the blended recycled water and Harkins Slough
Project water for agricultural use along the coast.”
“The Act specifically empowers [defendant] to adopt ordinances levying
„groundwater augmentation charges on the extraction of groundwater from all extraction
facilities within the agency for the purposes of paying the costs of purchasing, capturing,
storing, and distributing supplemental water for use within [defendant‟s] boundaries.‟ ”
(Amrhein, supra, 150 Cal.App.4th at p. 1372; see Act, § 1001.)
Ordinance No. 2010-02 describes that the augmentation charge is necessary to
cover the costs of “supplemental water service” described as follows: “(a) the
purchase/acquisition, capture, storage and distribution of supplemental water through the
supplemental water projects [Watsonville Recycled Water Project; Harkins Slough
Project; CDS] and including the planning, design, financing, construction, operation,

3
maintenance, repair, replacement and management of these project facilities, and (b)
basin management monitoring and planning to manage the existing projects and to
identify and determine future water projects that would further reduce groundwater
overdraft and retard seawater intrusion. The cost of the service also includes ongoing
debt payments related to the design and construction of the completed supplemental
water projects.”
PROCEDURAL BACKGROUND
In 2002, defendant approved ordinance No. 2002-02, which established an
augmentation charge of $80 per acre-foot. Several citizens challenged the ordinance on
the ground that the approval procedure did not comply with the notice, hearing, and
voting requirements of Proposition 218. The trial court dismissed the case on the ground
of a special statute of limitations, and the plaintiffs appealed to this court. We reversed
the judgment after finding that part of the augmentation charge was not subject to the
statute of limitations. (Scurich v. Pajaro Valley Water Management Agency (May 27,
2004, H025776) [nonpub. opn.] (Scurich); see Eiskamp v. Pajaro Valley Water
Management Agency (2012) 203 Cal.App.4th 97, 100-101 (Eiskamp).) We remanded the
case for trial.
In 2003, defendant approved ordinance No. 2003-01, which increased the
augmentation charge to $120 per acre-foot. It did not comply with the notice, hearing,
and voting requirements of Proposition 218. But it filed Amrhein as a validation
proceeding3 seeking a declaration as to the validity of the ordinance. The trial court
declared the ordinance valid, and citizens who had objected appealed to this court.
In 2004, defendant approved ordinance No. 2004-02, which increased the
augmentation charge to $160 per acre-foot. It did not comply with the notice, hearing,

3
In rem proceeding by public agency against all persons interested in validity of
matter determined. (Code Civ. Proc., § 860 et seq.)

4
and voting requirements of Proposition 218. Griffith challenged the ordinance and a
1993 management-fee ordinance. San Andreas Mutual Water Company and others also
challenged the ordinance. The two actions were consolidated with Scurich (Consolidated
Lawsuits) and the Consolidated Lawsuits were stayed pending our decision in Amrhein.
In May 2007, we reversed the judgment in Amrhein after holding that “the
augmentation fee is a fee or charge „imposed . . . as an incident of property ownership‟
and thus subject to [the Proposition 218] preconditions for the imposition of such
charges.” (Amrhein, supra, 150 Cal.App.4th at p. 1370.)
In October 2007, defendant repealed ordinance Nos. 2003-01 and 2004-02.
“In January 2008, the Scurich plaintiffs, the San Andreas plaintiffs, Harold
Griffith, and the Amrhein defendants wanted to resolve all disputes in the Amrhein
Lawsuit and the Consolidated Lawsuits. They and [defendant] then entered into a
stipulated agreement for entry of judgment (stipulated agreement). The stipulated
agreement provided: „all matters raised in the Consolidated Lawsuits and the Amrhein
Lawsuit (collectively the “Pending Litigation”) as to [defendant‟s] actions shall be
resolved by entry of judgment in the Pending Litigation‟; [defendant] would pay $1.8
million to the Scurich plaintiffs, the San Andreas plaintiffs, Harold Griffith, and the
Amrhein defendants for legal fees, costs, and expenses; and the augmentation charges
collected pursuant to ordinance Nos. 2003-01 and 2004-02 would be refunded. It also
stated that the „settlement extinguishes any and all claims arising out of the Pending
Litigation all issues, transactions and/or related claims or actions including all claims that
the parties have made or could have made with respect to the validity of any
Augmentation Charge or Management Fee ordinances currently in effect . . . .‟ The
stipulated agreement did not provide for either the repeal of [ordinance No. 2002-02] or
the refund of augmentation charges imposed under [that] Ordinance.
“In February 2008, judgment was entered pursuant to the terms of the stipulated
agreement.” (Eiskamp, supra, 203 Cal.App.4th at p. 102.)

5
 In May 2010, defendant mailed notice of a public hearing on a proposed three-tier
augmentation charge increase to all parcel owners.4 At the hearing, defendant tallied 291
written protests from 1,930 eligible parcel owners. Defendant then enacted ordinance
No. 2010-02, which imposed the increased augmentation charges.
In June 2010, defendant began an all-mail election on the ordinance. It mailed
ballots to all owners of land parcels served by a well who would be subject to the
augmentation charge. Each ballot was accorded weighted votes proportional to the
parcel‟s financial obligation as measured by average annual water use over the prior five
years. And each ballot stated its number of votes. The weighted votes approved the
ordinance 72 percent to 28 percent. But, if counted one vote per parcel, 324 votes were
in favor of the ordinance and 608 votes were against the ordinance.5 Plaintiffs then filed
the instant actions to challenge ordinance No. 2010-02.
CHALLENGES TO ORDINANCE NO. 2010-02
“Proposition 218 was passed in 1996 by the electorate to plug certain perceived
loopholes in Proposition 13. [Citations.] Specifically, by increasing assessments, fees,
and charges, local governments tried to raise revenues without triggering the voter
approval requirements in Proposition 13.” (Silicon Valley Taxpayers‟ Assn. v. Garner
(2013) 216 Cal.App.4th 402, 405-406.)
Relevant here is the component of Proposition 218 that undertakes to constrain the
imposition by local governments of “assessments, fees and charges.” (§ 1.)

4
Defendant proposed $195 per acre-foot for metered wells inside the coastal
delivered-water zone, $162 per acre-foot for metered wells outside the delivered-water
zone (primarily municipal, industrial, and agricultural users), and $156 per acre-foot for
unmetered wells (primarily rural residential). It also proposed $306 per acre-foot for
delivered water charges.
5
The parties differ immaterially on the one-for-one vote count.

6
 Proposition 218 restricts “the power of public agencies to impose a „ “[f]ee” or
“charge,” ‟ defined as any „levy other than an ad valorem tax, a special tax, or an
assessment, imposed by an agency upon a parcel or upon a person as an incident of
property ownership, including a user fee or charge for a property related service.‟
[Citation.] The phrase „[p]roperty-related service‟ is defined to mean „a public service
having a direct relationship to property ownership.‟ [Citation.] „Property ownership‟ is
defined to „include tenancies of real property where tenants are directly liable to pay the
assessment, fee, or charge in question.‟ [Citation.]
“Where a proposed fee or charge comes within this definition, [Proposition 218]
requires the proposing agency to identify parcels upon which it will be imposed, and to
conduct a public hearing. [Citation.] The hearing must be preceded by written notice to
affected owners setting forth, among other things, a „calculat[ion]‟ of „[t]he amount of the
fee or charge proposed to be imposed upon each parcel . . . .‟ [Citation.] If a majority of
affected owners file written protests at the public hearing, „the agency shall not impose
the fee or charge.‟ [Citation.] Moreover, unless the charge is for „sewer, water, [or]
refuse collection services,‟ „no property related fee or charge shall be imposed or
increased unless and [it] is submitted and approved by a majority vote of the property
owners of the property subject to the fee or charge or, at the option of the agency, by a
two-thirds vote of the electorate residing in the affected area.‟ ” (Amrhein, supra, 150
Cal.App.4th at pp. 1384-1385.)
As mentioned, we have determined that a groundwater augmentation charge such
as the one imposed by ordinance No. 2010-02 “is indeed imposed as an incident of
property ownership [and] that it is subject to the restrictions imposed on such charges by
[Proposition 218].” (Amrhein, supra, 150 Cal.App.4th at p. 1393.) We cautioned in
Amrhein, however, that “We should not be understood to imply that the charge is
necessarily subject to all of the restrictions imposed by [Proposition 218] on charges
incidental to property ownership. [Amrhein] presents no occasion to determine whether

7
this or a similar charge may fall within any of the express exemptions or partial
exemptions set forth in that measure.” (Ibid. & fn. 21.)
This case, however, presents such an occasion.
Boiled to its essence, plaintiffs‟ challenge to the election is that the weighted vote
was improper. But the challenge necessarily fails if the augmentation charge falls within
the express exemption set forth in Proposition 218 for sewer, water, and refuse collection
services. (§ 6, subd. (c) [vote required to impose or increase property-related fee “Except
for . . . sewer, water, and refuse collection services.”].)6
Plaintiffs argue that defendant does not provide “water service” as that term is
commonly understood. (See Howard Jarvis Taxpayers Assn. v. City of Salinas (2002) 98
Cal.App.4th 1351, 1358 [“The average voter would envision „water service‟ as the supply
of water for personal, household, and commercial use . . . .”] (Salinas).) They urge that
defendant provides “ „groundwater management,‟ ” which may be a service “but that
service is not „water service.‟ ” Plaintiffs, however, make a distinction without a
difference.
Domestic water delivery through a pipeline is a property-related water service
within the meaning of Proposition 218. (Bighorn-Desert View Water Agency v. Verjil
(2006) 39 Cal.4th 205, 217.) And we have held that, for purposes of Proposition 218, the
augmentation charge at issue here does not differ materially “from a charge on delivered
water.” (Amrhein, supra, 150 Cal.App.4th at pp. 1388-1389.) If the charges for water
delivery and water extraction are akin, then the services behind the charges are akin.
Moreover, the Legislature has endorsed the view that water service means more than just
supplying water. The Proposition 218 Omnibus Implementation Act, enacted specifically

6
According to defendant, the election was unnecessary but held nevertheless in an
abundance of caution “because no case has explicitly reached the issue, and because of
the near certainty of suit.”

8
to construe Proposition 218, defines “water” as “any system of public improvements
intended to provide for the production, storage, supply, treatment, or distribution of
water.” (Gov. Code, § 53750, subd. (m).) Thus, the entity who produces, stores,
supplies, treats, or distributes water necessarily provides water service. Defendant‟s
statutory mandate to purchase, capture, store, and distribute supplemental water therefore
describes water service.
Plaintiffs‟ reliance on Salinas is erroneous. In Salinas, the question was whether a
storm drainage fee was exempt from the voter-approval requirement because it was a
water or sewer service fee. Our point about the average voter envisioning water service
as meaning the supplying of water was a preface to distinguishing water service from
storm drainage rather than a definition of water service. The entire sentence reads “The
average voter would envision „water service‟ as the supply of water for personal,
household, and commercial use, not a system or program that monitors storm water for
pollutants, carries it away [from property], and discharges it into the nearby creeks, river
and ocean.” (Salinas, supra, 98 Cal.App.4th at p. 1358.)
We therefore conclude that the augmentation charge at issue here is for water
service within the meaning of Proposition 218. As such, it was expressly exempt from
the fee/charge voting requirement.
In a second procedural attack, Pendry urges that defendant transgressed
Proposition 218 by enacting ordinance No. 2010-02 without giving notice of the protest
hearing to tenants and public utility customers who indirectly pay the augmentation
charge. There is no merit to the claim.
“An agency shall follow the procedures pursuant to this section in imposing or
increasing any fee or charge as defined pursuant to this article, including, but not limited
to, the following: [¶] (1) The parcels upon which a fee or charge is proposed for
imposition shall be identified. The amount of the fee or charge proposed to be imposed
upon each parcel shall be calculated. The agency shall provide written notice by mail of

9
the proposed fee or charge to the record owner of each identified parcel upon which the
fee or charge is proposed for imposition, the amount of the fee or charge proposed to be
imposed upon each, the basis upon which the amount of the proposed fee or charge was
calculated, the reason for the fee or charge, together with the date, time, and location of a
public hearing on the proposed fee or charge.” (§ 6, subd. (a)(1), italics added.)
In short, Proposition 218 requires that notice of the protest hearing be sent to
record owners, not tenants or customers. (See Gov. Code, § 53750, subd. (j) [“For
purposes of . . . Article XIII D of the California Constitution . . . [¶] . . . [¶] (j) „Record
owner‟ means the owner of a parcel whose name and address appears on the last
equalized secured property tax assessment roll, or in the case of any public entity, the
State of California, or the United States, means the representative of that public entity at
the address of that entity known to the agency.”].)
It is true, as Pendry points out, that, in the definitions section of Proposition 218,
the term “property ownership” is defined to include “tenancies of real property where
tenants are directly liable to pay the assessment, fee, or charge in question.” (§ 2, subd.
(g).) And it is true that “when a well [is] shown to be operated by a lessee or other
occupant, that person could be billed.” (Amrhein, supra, 150 Cal.App.4th at p. 1383.)
But the notice provision of section 6, subdivision (a), requires notice to record owners,
not to those having property ownership. (Silicon Valley, supra, 44 Cal.4th at p. 444 [“
„The principles of constitutional interpretation are similar to those governing statutory
construction.‟ [Citation.] If the language is clear and unambiguous, the plain meaning
governs.”].)
“Proposition 218 also imposes substantive limitations, including restrictions on the
use of revenues derived from such charges.” (Amrhein, supra, 150 Cal.App.4th at p.
1385.)
“A fee or charge shall not be extended, imposed, or increased by any agency
unless it meets all of the following requirements:

10
 “(1) Revenues derived from the fee or charge shall not exceed the funds required
to provide the property related service.
“(2) Revenues derived from the fee or charge shall not be used for any purpose
other than that for which the fee or charge was imposed.
“(3) The amount of a fee or charge imposed upon any parcel or person as an
incident of property ownership shall not exceed the proportional cost of the service
attributable to the parcel.
“(4) No fee or charge may be imposed for a service unless that service is actually
used by, or immediately available to, the owner of the property in question. Fees or
charges based on potential or future use of a service are not permitted. Standby charges,
whether characterized as charges or assessments, shall be classified as assessments and
shall not be imposed without compliance with Section 4 [procedures and requirements for
proposed assessments].
“(5) No fee or charge may be imposed for general governmental services . . .
where the service is available to the public at large in substantially the same manner as it
is to property owners. . . . In any legal action contesting the validity of a fee or charge,
the burden shall be on the agency to demonstrate compliance with this article.” (§ 6,
subd. (b).)
Plaintiffs argue that the augmentation charge transgresses each of the section 6,
subdivision (b), substantive limitations.
Revenues shall not exceed the funds required to provide the property related
service
According to Griffith,7 the revenues derived from the augmentation charge exceed
the funds required to provide supplemental water service because some of the revenue is

7
Pendry does not challenge compliance with section 6, subdivision (b)(1).

11
used to pay ongoing debt that was “incurred to build a now abandoned pipeline to bring
water into the Valley.” 8 There is no merit to the point.
As noted above, the Act allows defendant to levy groundwater augmentation
charges for the purposes of paying the costs of purchasing, capturing, storing, and
distributing supplemental water. Such costs necessarily include debt service incurred to
construct facilities to capture, store, and distribute supplemental water.
Revenues shall not be used for any purpose other than that for which the fee or
charge was imposed
According to plaintiffs, the revenues derived from the augmentation charge are
used for a purpose other than that for which the charge was imposed because some of the
revenue is used to pay debt service and defendant‟s general expenses. Again, the Act
allows an augmentation charge to cover debt service. And similar reasoning supports that
the costs of purchasing, capturing, storing, and distributing supplemental water
necessarily include general expenses to administer the purchasing, capturing, storing, and
distributing of supplemental water.
Pendry, however, expands on this theme in a separate, detailed argument to the
effect that the augmentation charge is unauthorized by the Act. He contends that
ordinance No. 2010-02 is invalid because it allows the augmentation charge to be used
for “supplemental water service,” a purpose not authorized by the Act. Without
specifically referring to the Watsonville Recycled Water Project that blends treated
recycled water with well water for agricultural use, he complains that defendant “is using
the funds generated by the augmentation charge imposed by Ordinance 2010-02 to
extract groundwater from within the watershed and deliver that water to the coast . . . .”

8
Defendant‟s Proposition 218 Service Charge Report (Rate Study), in evidence
below, explains that a previously recommended import pipeline was no longer feasible
“[d]ue to changes in the availability of Central Valley Project water supplies.”

12
 Pendry relies on the Act, which authorizes defendant to levy augmentation charges
to pay the costs of purchasing, capturing, storing, and distributing supplemental water for
use within the boundaries of the agency. From there, Pendry notes that the Act states that
“ „Supplemental water‟ means surface water or groundwater imported from outside the
watershed or watersheds of the groundwater basin, flood waters that are conserved and
saved within the watershed or watersheds which would otherwise have been lost or
would not have reached the groundwater basin, and recycled water.” (Act, § 316.) From
this, Pendry concludes that the recycle/well blend is not supplemental water because the
well portion of the blend is neither imported water, flood water, nor recycled water. We
disagree with Pendry‟s analysis.
Defendant‟s Rate Study (ante, fn. 8) explains that “The [Watsonville Recycled
Water Facility] produces recycled water with salinity (Total Dissolved Solids or TDS
concentration) between approximately 700 and 900 mg/L. The concentration of TDS
varies seasonally as a result of the source water flowing into the Waste Water Treatment
Plant. In order to reduce salinity and use the recycled water for irrigation purposes, the
recycled water must be blended with higher quality (lower TDS) water. Therefore, the
recycled water project includes the construction, operation, and maintenance of blend
water from supplemental groundwater wells. The supplemental wells are described in the
BMP [Basin Management Plan] as part of the recycled water project. The wells are a
necessary component of the recycled water project, which reduces coastal pumping and
thus increases the sustainable yield of the overall groundwater basin. These wells also
off-set and reduce the adverse water quality wells located closer to the coast.”
“ „Recycled water‟ means water which, as a result of treatment of waste, is
suitable for a direct beneficial use or a controlled use that would not otherwise occur and
is therefor considered a valuable resource.” (Wat. Code, § 13050, subd. (n).)
Given this definition, it is apparent that the Watsonville Recycled Water Facility
does not produce recycled water because the water it produces is not suitable for the

13
beneficial use of coastal agriculture.9 The water only becomes recycled water when
blended with the well water. Thus, the recycle/well blend water delivered to the coast is
supplemental water.
We are constrained to add that the Act unquestionably allows defendant to extract
groundwater for the purpose of capturing recycled water. The Act generally provides that
defendant “should, in an efficient and economically feasible manner, utilize supplemental
water and available underground storage and should manage the groundwater supplies to
meet the future needs of the basin.” (Act, § 102, subd. (g).) It specifically provides that
defendant, “in order to improve and protect the quality of water supplies may treat, inject,
extract, or otherwise control water, including, but not limited to, control of extractions,
and construction of wells and drainage facilities.” (Id. § 711.) And it also provides that
defendant “shall have the power to take all affirmative steps necessary to replenish and
augment the water supply within its territory.” (Id. § 714.)
The amount imposed as an incident of property ownership shall not exceed the
proportional cost of the service attributable to the parcel
According to Griffith, the amount imposed on his parcel was disproportionate
because he uses no services. But this overlooks that “the management of the water
resources . . . for agricultural, municipal, industrial, and other beneficial uses is in the
public interest” and defendant was created to manage the resources “for the common
benefit of all water users.” (Act, § 101.) It also overlooks that the augmentation charge
pays for “the activities required to prepare or implement any groundwater management
program.” (Id. § 1002, subd. (a).)

9
“Agricultural uses shall have priority over other uses under this act within the
constraints of state law.” (Act, § 102, subd. (d).)

14
 Pendry similarly grounds his argument on the erroneous premise that “The only
property owners receiving § 6(b) services from [defendant] are the coastal landowners
receiving delivered water.”
Pendry specifically complains that defendant “established the augmentation charge
by calculating the amount needed for its project, and then subtracting its sources of
revenue other than the augmentation charge, with the remainder being the amount of the
augmentation charge.” He urges that defendant improperly “worked backwards.”
According to Pendry, “the proportional cost of service must be calculated . . . before
setting the rate for the augmentation charge.”
Defendant indeed established its augmentation charge based on a revenue-
requirement model that budgeted the rates by (1) taking the total costs of chargeable
activities, (2) deducting the revenue expected from other sources, and (3) apportioning
the revenue requirement among the users. The American Water Works Association
Manual of Water Supply Practices, in evidence below and relied on by defendant‟s rate-
making consultant, recommends this methodology (“The total annual cost of providing
water service is the annual revenue requirements that apply to the particular utility”).
Pendry does not explain why this approach offends Proposition 218 proportionality. He
cites Silicon Valley, supra, 44 Cal.4th at page 457 (“ „an assessment calculation that
works backward by starting with an amount taxpayers are likely to pay, and then
determines an annual spending budget based thereon, does not comply with the law
governing assessments.‟ ”). Unlike Silicon Valley, however, this case neither involves an
assessment nor a what-will-the-market-bear methodology. Pendry also cites Howard
Jarvis Taxpayers Assn. v. City of Fresno (2005) 127 Cal.App.4th 914, 923. But that case
says nothing more than that costs should be determined and apportioned (“Together,
subdivision (b)(1) and (3) of article XIII D, section 6, makes it necessary--if Fresno
wishes to recover all of its utilities costs from user fees--that it reasonably determine

15
[citation] the unbudgeted costs of utilities enterprises and that those costs be recovered
through rates proportional to the cost of providing service to each parcel.”). (Ibid.)
Pendry acknowledges that defendant apportioned the augmentation charge among
different categories of users (metered wells, unmetered wells, wells within the delivered
water zone). But he argues that City of Palmdale v. Palmdale Water Dist. (2011) 198
Cal.App.4th 926 (Palmdale), holds that Proposition 218 proportionality compels a parcel-
by-parcel proportionality analysis. We disagree with Pendry.
In Palmdale, the court reversed a judgment that had upheld tiered categories of
water rates. It held that the water district had failed to carry its burden to justify disparate
treatment of the customer classes. The case did not hold that parcel-by-parcel analysis
was required. It held that the water district charged categories disproportionately
“without a corresponding showing in the record that such impact is justified under
[Proposition 218].” (Palmdale, supra, 198 Cal.App.4th at p. 937.)
Apportionment is not a determination that lends itself to precise calculation.
(White v. County of San Diego (1980) 26 Cal.3d 897, 903.) In the context of determining
the validity of a fee imposed upon water appropriators by the State Water Resources
Control Board, the Supreme Court has recently held that “The question of proportionality
is not measured on an individual basis. Rather, it is measured collectively, considering
all rate payers.” (California Farm Bureau Federation v. State Water Resources Control
Bd. (2011) 51 Cal.4th 421, 438.)
Given that Proposition 218 prescribes no particular method for apportioning a fee
or charge other than the amount shall not exceed the proportional cost of the service
attributable to the parcel, defendant‟s method of grouping similar users together for the
same augmentation rate and charging the users according to usage is a reasonable way to
apportion the cost of service. That there may be other methods favored by plaintiffs does
not render defendant‟s method unconstitutional. Proposition 218 does not require a more
finely calibrated apportion.

16
 No fee or charge may be imposed unless it is immediately available and not for
future services
Plaintiffs argue that the augmentation charge will be used for future services
because ordinance No. 2010-02 states that the charge will be used “to identify and
determine future supplemental water projects . . . .” There is no merit to the point.
Defendant‟s water service consists of more than just delivering water. As
mentioned, the Act authorizes defendant to levy groundwater augmentation charges to
pay for purchasing, capturing, storing, and distributing supplemental water. Since one
cannot rationally purchase supplemental water without identifying and determining one‟s
needs, identifying and determining future supplemental water projects is part of
defendant‟s present-day water service.
Pendry also complains that delivered water is one of the services and delivered
water is not immediately available except to coastal properties within the delivered water
zone. But, again, Pendry‟s complaint stems from his erroneous premise that the only
property owners receiving services from defendant are the coastal landowners receiving
delivered water and his failure to acknowledge that the augmentation charge pays for the
activities required to prepare or implement the groundwater management program for the
common benefit of all water users.
Revenues may not be imposed for general governmental services where the
service is available to the public at large in substantially the same manner as it is to
property owners
Plaintiffs reason that, since everyone is a water user, everyone benefits from the
services charged to property owners via the augmentation charge. They conclude that the
augmentation charge is imposed for general governmental services. We disagree with
plaintiffs‟ analysis.
The language of article XIII D, section 6, subdivision (b)(5), concerns the purpose
of fees and charges. (Golden Hill Neighborhood Assn., Inc. v. City of San Diego (2011)

17
199 Cal.App.4th 416, 434, fn. 17.) “The key is that the revenues derived from the fee or
charge are required to provide the service, and may be used only for the service.”
(Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 648.)
Defendant is not using money from the augmentation charge for “general governmental
service.” (§ 6, subd. (b)(5).) Rather, it is using the money to pay for the water service
provided.
CONFLICT OF INTEREST
Pendry contends that defendant‟s board member, Michael Dobler, who voted for
ordinance No. 2010-02, had a disqualifying financial interest in the decision, and that his
participation renders the ordinance void under the PRA. He points out that defendant‟s
board of directors consists of seven members (Act, § 402) and ordinances must pass by
“the affirmative vote of the majority of the members of the board” (id. § 410). He notes
that the vote count to pass ordinance No. 2010-02 was 4 to 1 and, thus, insufficient
without Dobler‟s vote. He complains that Dobler has an interest in entities that farm in
the delivered water zone. We disagree with Pendry‟s contention.
The PRA was enacted by initiative in June 1974. It prohibits any public official
from participating in a governmental decision in which he knows or has reason to know
he has a financial interest. (Gov. Code, § 87100.) It allows a person to sue for injunctive
relief and, “If it is ultimately determined that a violation has occurred and that the official
action might not otherwise have been taken or approved, the court may set the official
action aside as void.” (Id. § 91003, subd. (b).) It also establishes the Fair Political
Practices Commission (id. § 83100), which is authorized to adopt regulations to carry out
the purposes and provisions of the PRA (id. § 83112).
“A public official has a financial interest in a decision within the meaning of
Section 87100 if it is reasonably foreseeable that the decision will have a material
financial effect, distinguishable from its effect on the public generally, on the official . . .
.” (Gov. Code, § 87103.)

18
 “The financial effect of a governmental decision on the official‟s economic
interest is indistinguishable from the decision‟s effect on the public generally if . . . : [¶] .
. . [¶] (c) The decision is made by the governing board of a water, irrigation, or similar
district to establish or adjust assessments, taxes, fees, charges, or rates or other similar
decisions, such as the allocation of services, which are applied on a proportional or
„across-the-board‟ basis on the official‟s economic interests and ten percent of the
property owners or other persons receiving services from the official‟s agency.” (Cal.
Code Regs., tit. 2, § 18707.2, subd. (c) (regulation).)
Here, there is no serious question that (1) defendant is a water, irrigation, or
similar district, and (2) the decision effected an adjustment to charges or rates.
Pendry disputes that the ordinance applies the charges proportionally and across
the board to persons receiving services from defendant. He urges that the augmentation
charge is imposed upon approximately 2400 parcels located within defendant‟s
boundaries but only a handful of those properties receive the delivered water service
(Dobler included) and can expect to benefit from the greater service, reliability, improved
water quality from the delivered water supply. This, however, is merely another variant
of Pendry‟s erroneous premise that the only property owners receiving services from
defendant are the coastal landowners receiving delivered water.
The augmentation charge affects those on whom it is imposed by burdening them
with an expense they will bear proportionately to the amount of groundwater they extract
at a rate depending on which of three rate classes applies. It is imposed “across-the-
board” on all water extractors. All persons extracting water--including any coastal users
who choose to do so--will pay an augmentation charge per acre-foot extracted. All
persons extracting water and paying the charge will benefit in the continued availability
of usable groundwater. That there is a separate charge for delivered water has no
tendency to establish that the augmentation charge is applied to the interests of extractors
in a manner that is anything other than proportional and across-the-board. It is plain that

19
the ordinance satisfies the terms of regulation section 18707.2, subdivision (c), such that
the “public generally” exception in the PRA applies to Dobler‟s vote.10 (See Amrhein,
supra, 150 Cal.App.4th at pp. 1395-1396 (conc. opn. of Bamattre-Manoukian, J.).)
ORDINANCE NO. 2002-02 AND 1993 MANAGEMENT FEE
In Eiskamp, the plaintiff challenged ordinance No. 2002-02 on the ground that it
was invalid because defendant did not comply “with the notice, hearing, and voting
requirements of [Proposition 218].” (Eiskamp, supra, 203 Cal.App.4th at p. 102.) We
concluded that the challenge was barred by the doctrine of res judicata because the 2008
stipulated judgment in the Pending Litigation resolved the issue against all persons. We
specifically held that “Since the pending litigation was a validation proceeding, the
judgment entered pursuant to the stipulated agreement was „binding and conclusive . . .
against [defendant] and against all other persons‟ (Code Civ. Proc., § 870, subd. (a)),
including Eiskamp.” (Id. at p. 106.) Since Pendry raises the same claim as the plaintiff
in Eiskamp,11 his challenge is also barred.
Pendry disagrees. He asserts that Eiskamp was wrongly decided because “the in
pro per plaintiff in Eiskamp did not properly present the correct facts or law to this
Court.” According to Pendry, the Consolidated Lawsuits were not in rem validation

10
Pendry claims that the trial court did not find that the “public generally”
exception applies in this case. It is true that the trial court‟s reasoning is ambiguous. The
trial court‟s statement of decision finds against “a conflict of interest which could support
the voiding of the subject Ordinance.” The finding could be construed to mean that (1)
Dobler had no disqualifying financial interest, (2) the “public generally” exception
applied to Dobler‟s financial interest, or (3) Dobler‟s financial interest did not justify the
discretionary remedy to void the ordinance. Pendry‟s point is of no moment. The parties
argued the “public generally” exception to the trial court. The salient facts are
undisputed. And Pendry urges us to review the PRA issue de novo because it involves
statutory interpretation on undisputed facts.
11
The plaintiff in Eiskamp did not challenge the 1993 management-fee ordinance
as does Pendry, but the management-fee ordinance stands on the same footing as the
augmentation-charge ordinance since it was part of the stipulated judgment.

20
proceedings insofar as ordinance No. 2002-02 was concerned because, in Scurich (the
case that challenged that ordinance via a reverse validation action), our reversal upheld
the trial court‟s dismissal of the in rem validation cause of action and remanded for trial
an in personam declaratory-relief cause of action. From this, Pendry reasons that
ordinance No. 2002-02 was “not under attack” such that there was in rem jurisdiction in
the Consolidated Lawsuits. Pendry concludes that the stipulated judgment only binds
parties to the stipulated agreement and, since he was not a party,12 he is free to relitigate.
Pendry‟s analysis is erroneous.
The settlement agreement served to resolve “ „all matters raised in the
Consolidated Lawsuits and the Amrhein Lawsuit (collectively the “Pending Litigation”).‟
” (Eiskamp, supra, 203 Cal.App.4th at p. 102, italics added.) Specifically, the parties
extinguished “ „any and all claims arising out of the Pending Litigation all issues,
transactions and/or related claims or actions including all claims that the parties have
made or could have made with respect to the validity of any Augmentation Charge or
Management Fee ordinances currently in effect . . . .‟ ” (Ibid., italics added.)
In the Pending Litigation, the “judgment was entered pursuant to the terms of the
stipulated agreement.” (Eiskamp, supra, 203 Cal.App.4th at p. 102.) Since the Amrhein
Lawsuit was a validation proceeding and part of the Pending Litigation, all persons are
bound by the judgment. (Code Civ. Proc., § 870, subd. (a).) And since the judgment
extinguished all claims that the parties, which includes all persons given that validation
character of Amrhein, had made concerning any augmentation charge or management fee
then in effect, Pendry cannot relitigate the claims here. Pendry concedes as much by
recognizing that “the plaintiffs and defendants in Scurich and Amrhein [all persons]

12
Plaintiff McGrath was a party to the stipulated agreement but he excepted
himself from the causes of action herein that challenge ordinance No. 2002-02 and the
management fee ordinance.

21
stipulated in private settlement discussions to accept money in exchange for foregoing
their individual right to attack Ordinance 2002-02 in the future.” That ordinance No.
2002-02 was not technically under attack at the time of the judgment does not detract
from that the Pending Litigation was a validation proceeding that comprehensively
extinguished all claims that had been made, or could have been made about the validity
of any augmentation charge or management fee then in effect. This necessarily includes
claims against ordinance No. 2002-02 and the 1993 Management Fee.13
Pendry claims that applying res judicata against him transgresses due process.
However, his argument is premised on the trial court‟s conclusion that res judicata
applied because he was in privity with the parties in the Pending Litigation. Our
conclusion is that res judicata applies because, by virtue of the validation character of the
Pending Litigation, he was a party to the Pending Litigation.
DISPOSITION
The judgment in H038087 (Santa Cruz County Superior Court case No.
CV168936-Griffith) is affirmed.
The judgment in H038264 (Santa Cruz County Superior Court case No.
CV169080-Pendry) is affirmed.

13
Defendant‟s request to take judicial notice of three letters requesting
depublication of Eiskamp and four letters supporting a petition for review of Eiskamp is
denied.

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 Premo, J.

WE CONCUR:

Rushing, P.J.

Elia, J.

Griffith v. Pajaro Valley Water Management Agency
H038087
Pendry et al. v. Pajaro Valley Water Management Agency
H038264
Trial Court: Santa Cruz County Superior Court
Superior Court Nos. CV168936,
CV169080

Trial Judge: Hon. Timothy Volkmann

Counsel for Plaintiff/Appellant: In pro. per.
Harold Griffith

Case No: H038087
Superior Court Case No: CV168936

Counsel for Plaintiffs/Appellants: Johnson & James
Joseph P. Pendry, James Spain, Yuet- Robert K. Johnson
Ming Chu, William McGrath, Henry
Schimpeler

Case No: H038264
Superior Court Case No: CV169080

Counsel for Defendant/Respondent: Colantuono & Levin
Pajaro Valley Water Management Michael G. Colantuono
Agency Amy C. Sparrow
Michael R. Cobden

Atchison, Barisone, Condotti &
Kovacevich
George J. Kovacevich
Anthony P. Condotti
S. Adair Paterno

Amicus Curiae on behalf of Aleshire & Wynder
Respondents for Association of Patricia J. Quilizapa
California Water Agencies and
California State Association of
Counties

Griffith v. Pajaro Valley Water Management Agency
H038087
Pendry et al. v. Pajaro Valley Water Management Agency
H038264