The Problem with Proportionality: The Effect of Proposition 218 on Retail Water Rates for Community Gardens in Los Angeles

by Laura Yraceburu ’20, UCLA School of Law

Yraceburu’s article won the 2020 California Water Law Writing Prize, awarded at the 2020 California Water Law Symposium. The California Water Law Writing Prize is co-sponsored by the California Water Law Symposium Board of Directors and University of the Pacific, McGeorge School of Law.

Community gardens in Los Angeles County have seen water rates increase from a flat rate of $1.41 per hundred cubic feet (HCF) in March 2016 to $2.095/HCF plus variable adjustments in July 2019 – a 289 percent increase.[1] As a result, some community gardens have been forced to quadruple their member gardeners’ monthly dues to cover the increasing cost of water.[2] In three years, this increase in the price of water has made gardening significantly more expensive and has priced out low-income, largely immigrant community members[3] who rely on these gardens to supplement their diets with fresh produce. Community gardens across Los Angeles now face the choice of either having their membership change from subsisters who rely on the gardens for dietary needs to hobby gardeners who can pay more to fund the gardens or, alternatively, closing their operations.  Either result increases food insecurity for the most vulnerable members of the gardens’ communities. 

California has a long history of resisting tax increases through voter-approved propositions, known in short-hand as the California Tax Revolt. This effort has generally made it more challenging for cities and utilities to raise needed revenue for local services and programs, including water service,[4] but a deeper problem exists than a shortage of funds. Proposition 218, which amended the California Constitution, imposes substantive and procedural requirements on local agencies by limiting property-related fees, including retail water rates.[5]  Proposition 218’s shifting of rate setting authority to the electorate has paradoxically contributed to a significant water rate increase for Los Angeles’ community gardens.  While the goal of the Tax Revolt was to keep taxes and rates low, certain ratepayers have not received such benefits and in fact have experienced disproportionate rate increases. 

This paper begins with an overview of community gardens and the history of the California Tax Revolt, primarily focusing on Propositions 13 and 218.[6]  Next, this paper will evaluate Proposition 218’s consequences for community gardens in the Los Angeles area. An analysis of how Proposition 218 was sold to voters will follow. A discussion of practical steps towards reform will precede the conclusion.[7]

Community Gardens

1. Benefits of Community Gardens

Community gardens are a form of urban agriculture in which a group of people cultivate a single piece of public or private property to produce fruit, vegetables, or ornamentals.[8]  The benefits of community gardens are numerous.  First, community gardens can reduce community members’ household expenses by allowing them to avoid the high cost of fresh, organic produce at the grocery store and to cultivate their own.[9] In food deserts, where grocery stores and markets are distant or non-existent, the community garden is a vital source of accessible fresh produce in a community, thereby promoting healthier eating habits.[10] At some gardens, including the La Madera Community Garden in El Monte, California, [11] gardeners cultivate culturally important crops that are difficult to find in standard grocery stores.[12]

Second, community gardens are used as a gathering space and promote intergenerational and community bonds.[13]  As noted by the Los Angeles Community Garden Council, “[c]ommunity gardens are places where people come together to share their love of gardening, regardless of their ethnic or socio-economic background.”[14] In visiting the La Madera Community Garden in El Monte, I witnessed children gardening alongside grandparents and Chinese Americans gardening alongside Latinxs. I attended a gardener meeting conducted in Spanish and translated into English, Mandarin and Cantonese.  Gardens are a valuable space for building and maintaining community relationships across societal lines.[15]

Third, community gardens serve to educate communities regarding best agricultural practices, including information regarding resource management, sustainability practices, pesticides use and organic alternatives, and soil management.[16] This opens a dialogue about how to improve practices and develop a more sustainable and healthy community.

Finally, community gardens increase green space in Los Angeles County.  In addition to aesthetic benefits, green spaces provide environmental benefits.[17] Green spaces help manage urban temperatures and reduce reliance on heating and cooling.[18] Enlarging permeable surfaces expands local groundwater recharge.[19] Trees and plants found in community gardens help regulate local air quality and climate.[20] These benefits protect and enhance the natural resources upon which local communities depend.

2. Los Angeles Community Garden Council

Most community gardens are governed by the gardeners themselves, led by community leaders.  In the Los Angeles area, however, the Los Angeles Community Garden Council (LACGC) provides business support to many community gardens.[21] The LACGC assists partner community gardens in fundraising, negotiating property leases, organizing gardening workshops, and managing the gardens’ accounting.[22] The LACGC provides support as needed for community leaders. For example, at the La Madera Community Garden community meeting on April 13, 2019, a representative from LACGC was present, but encouraged community leaders to manage the meeting.  The LACGC representative limited her comments to those addressing county-wide concerns or specific questions from garden leadership.[23]

The LACGC has helped build 38 community gardens since 1998,[24] and currently, supports and advises 125 community gardens across Los Angeles County.[25]  The LACGC is thus an important associational voice for community gardens in the Los Angeles area.

3. Operational Costs of Community Gardens

Most community garden operators charge small monthly dues to cover operation and overhead costs related to their garden. At the La Madera Community Garden in El Monte, gardeners currently pay $60 per year per plot to cover the costs of water, seeds, tools, and other operating costs.[26]  

Other than salaries and wages, water expenses are the largest expense for LACGC gardens[27] and thereby play a significant role in driving plot rental prices.  In 2019 for example, LACGC gardens collectively spent $85,640 on water alone.[28]  The next highest program expense was garden materials and supplies ($26,699), followed by partner garden fees ($14,028),[29] and repairs and maintenance ($10,090).[30]  Last year, water costs accounted for 57 percent of LACGC’s program expenses and 23 percent of LACGC’s total expenses including personnel expenses ($140,319), fundraising expenses ($4,717), depreciation ($44,400), and overhead ($27,933).[31] 

4. Impacts of Water Rate Increases on Community Gardens

The increase in community gardens’ water rates from a flat rate of $1.41/HCF in March 2016 to $2.095/HCF plus variable adjustments in July 2019 represents a 289 percent water rate increase. Such an increase has serious negative implications for community gardens.  

As a result of the increase, community gardens have been forced to increase monthly dues to continue operations.  For example, at the Stanford-Avalon garden in Watts, serving 200 gardeners, water costs for the garden increased from $4,000 per month in March 2016 to $15,702 per month in July 2019. As a result, Stanford-Avalon has been forced to increase monthly dues from $20 per month in 2016 to $80 per month in 2019,[32] causing low income gardeners to lose the ability to afford monthly dues.[33] Hobby gardeners are likely to replace low-income subsisters who cannot afford the rate increase.[34] While hobby gardeners still garden and maintain the garden’s green spaces, the garden loses its ability to serve the members of the community most in need of the garden’s services.

Other community gardens fear having to cease operations due to the increase in water rates.[35] One such garden is the La Madera Community Garden in El Monte.[36] Gardeners are worried about how to pay the water bill as the garden’s debt nears $2,000.[37] Increasing water costs also causes conflict among the gardeners regarding excess water usage.[38]  As a result of the economic uncertainty of garden operations due to increased water rates and the related tension among gardeners, the garden’s landowner is reconsidering whether to renew the garden’s lease.[39]

Closure of any community garden is likely to lead to greater food insecurity, more vacant lots, higher crime rates, and less fresh produce available for the wider community.[40] Garden closures also remove valuable green spaces, may remove permeable ground, eliminate community gathering spaces, and increase community members’ household expenses.[41]

California Tax Revolt

California’s Tax Revolt consists of a series of propositions that amended the California Constitution. These efforts were designed to limit taxes, charges, and fees imposed on residents and require voter approval in many instances.  The first and most well-known of these propositions is Proposition 13, which was enacted in 1978.[42] Proposition 13 was followed by Proposition 62 in 1986,[43] Proposition 218 in 1996, and Proposition 26 in 2010.[44] Each of these subsequent efforts sought to close loopholes related to local agencies’ abilities to raise revenue that were either not addressed by the preceding propositions or created by courts.[45]

1.Proposition 13

Proposition 13 was approved by voters in response to rapid increases in property taxes caused by dramatic increases in value of California residential real estate.[46] Property taxes rose far more quickly than incomes, and ultimately consumed 16 percent of incomes in California compared to 12.1 percent in the rest of the country.[47]

For these reasons, voters approved in Proposition 13 a cap of one percent of each parcel’s estimated value and further limited increases in the assessed value to two percent annually regardless of increases in property value.[48] Proposition 13 also required any new or increased local special taxes to be approved by two-thirds of the local electorate.[49] Local property tax revenue dropped by more than 50 percent as a result of the implementation of Proposition 13.[50]

While advocates were pleased with the results of Proposition 13, others pointed out its unequal treatment of taxpayers. Limiting property value increases for purposes of tax assessment to two percent successfully reduced the tax burden for certain property owners.[51] When a property is sold or developed, however, the property value for purposes of tax assessment jumps to market value, often significantly higher than the value assessed under the cap.[52] Therefore, the way Proposition 13 applied to property owners varied, determined by how long the taxpayer had owned the property.  Since property values increased faster than the two percent increase permitted by Proposition 13, newer homeowners pay more in property taxes for homes of similar sizes and quality.[53]

In response to Proposition 13, California courts narrowly interpreted its provisions, and narrowed the definition of a “tax”.[54]  In order to further mitigate the impacts of Proposition 13, cities began to avoid Proposition 13 requirements by reclassifying certain taxes or charges as “assessments” or “fees” to raise revenue.[55]

2. Proposition 218

Proposition 218—“The Right to Vote on Taxes Act”—added Article XIII C (“Voter Approval for Local Levies”) and Article XIII D (“Assessment and Property Related Fee Reform”) to the California Constitution in an attempt to “fix” perceived gaps in Proposition 13.[56] Proposition 218 imposed substantive and procedural requirements on taxes, assessments and fees.[57] Community garden retail water rates have primarily been impacted by Proposition 218’s substantive and procedural requirements related to taxes and property-related fees. As a result, further discussion on Proposition 218 will not include assessments or other types of fees.

a. Taxes

Proposition 218 sorted all taxes into two categories: general taxes and special taxes.[58] A general tax is “any tax imposed for general governmental purposes.”[59] A special tax is any “tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.”[60] These two definitions together eliminate the loophole cities used to avoid supermajority approval by depositing funds into the general account then rerouting those funds to specific programs or special districts.  

General new and increased taxes may be imposed with a majority vote.[61] General taxes in place prior to January 1, 1995 were not subject to Proposition 218 restrictions. However, any increase in taxes imposed before Proposition 218 are subject to voter approval, and general taxes imposed between January 1, 1995 and the effective date of Proposition 218 required a locality to obtain majority voter approval within two years of the tax’s effective date.[62]

Special taxes may only be imposed with two-thirds voter approval.[63] Like general taxes, Article XIII C of the California Constitution also protected existing special taxes to the extent that they were not increased.[64] Unlike general taxes, special taxes did not receive a two-year safe harbor following the effective date. Proposition 218 also prohibited “special districts”[65] – certain government agencies including school districts and utilities – from levying general taxes.[66]

b. Property-Related Fees

Proposition 218 also codified a new category of fees: property-related fees.  Property-related fees are defined as a charge imposed “upon a parcel or upon a person as an incident of property ownership, including a user fee for a property related service.”[67] Prior to Proposition 218, agencies could impose fees by adopting an ordinance at a public hearing without a vote of the electorate.[68] Proposition 218 imposed both substantive and procedural requirements on new or increased property related fees.[69] Many of the key terms and principles of Proposition 218’s application were left the courts to ultimately define and determine.

Proposition 218’s procedural requirements are contained in Article XIII D §6(a) and (c).  Subsection (c) describes the election requirements as articulated in previous sections.  Subsection (a) describes additional procedural requirements for property-related fees designed to allow citizens upon which the fee will be imposed to protest its imposition.  To comply with the protest procedures, an agency must first identify the parcels “upon which a fee or charge is proposed” and calculate the amount of that fee or charge.[70]  The agency must then provide written notice by mail to the “record owner of each identified parcel” describing the amount of the fee, how it was calculated, an explanation for the reason for the new or increased fee and the date, time, and location of the public hearing at which landowner protests to the fee will be considered.[71]  The agency must hold its “protest hearing” no sooner than 45 days after mailing the notices.[72]  At the agency’s hearing, the agency must “consider all protests against the proposed fee.”[73]  If a majority of landowners submit written protest to the new or increased fee, the agency cannot impose the fee.[74] To comply with election requirements, the election must be held at least 45 days after the protest hearing.[75]  Charges for “sewer, water, and refuse collection services” are exempt from the election requirements, but are subject to the protest procedures in Proposition 218.[76]  Sewer, water, and refuse collection services do not require voter approval, unless the substantive provisions are violated, thereby reclassifying the “property-related fee” as a “special tax”.

Proposition 218’s substantive requirements are contained in Article XIII D §6(b). For a new, extended or increased fee to be valid, (1) revenues must not exceed the cost to provide the property related service; (2) revenues cannot be used for any other purpose; (3) the amount of the fee shall not exceed the parcel’s proportional cost; (4) the service must be actually used by or immediately available to the property owner; and (5) the fee is not imposed for general governmental purposes, including police, fire, and library services.[77]

c. Litigation Standards under Proposition 218

Proposition 218 also adopted new litigation standards, increasing the difficulty for cities and special districts to defend the validity of taxes and fees. Proposition 218 shifted the burden to local governments and agencies to demonstrate compliance with its substantive and procedural requirements.[78] Proposition 218 also decreased deference granted to agencies by the courts.[79] Courts interpreted Proposition 218 to have replaced the arbitrary and capricious standard with an independent review standard.[80]

d. Proposition 26[81]

Proposition 26 amended the California Constitution Article XIII A §3 and added Article XIII C, §1(e).[82] The amendments broadened the scope of what was considered a tax, and therefore subject to simple majority (general) or supermajority (special) voter approval.[83]

Retail water rates are considered property related fees.[84] Proposition 26 specifically exempts from its provisions “assessments and property-related fees imposed in accordance with the provisions of Article XIII D.”[85] However, if property-related fees do not comply with Article XIII D, then they are considered a tax and become subject to requirements of Proposition 26.[86]

Water Rates Increases for Community Gardens in the Los Angeles Area

1. Los Angeles Department of Water and Power Water Rate Structure

Within the city of Los Angeles, water is distributed by the Los Angeles Department of Water and Power (LADWP). To set LADWP’s water rates, the Los Angeles City Council adopts ordinances subject to state law, including the requirements of Proposition 218. The City of Los Angeles has organized LADWP customers into schedules, generally subject to different rates.[87] LADWP also stratifies its water rates into four tiers.[88] The more water a customer uses, the more expensive the water becomes. When the volume of water used reaches specified thresholds, the customer’s subsequent water use is charged at a higher rate within the next tier.

The LA City Council and LADWP initially recognized the benefits of community gardens, public parks, and other non-profit recreational and public water usage[89] and prior to April 2016 provided a reduced rate structure for those uses under LADWP’s Schedule F rate tier.[90]  In contrast, commercial, industrial and temporary construction properties[91]; single-[92] and multi-family[93] residential; and non-specified ratepayers[94] (except for recycled water[95] and private fire service[96]) did not receive the reduced water rate that Schedule F customers enjoyed.[97]

2. Legal Standards in Water Rate Setting

When the City of Los Angeles ultimately raised water rates, including those in Schedule F, the City cited needed infrastructure improvements, conservation efforts, reducing reliance on imported water, and regulatory demands as reasons for the rate increases.[98] LADWP did not explain, however, why Schedule F did not maintain its lower rate structure in comparison to other water rate tiers. What does help explain the dramatic Schedule F increase, however, is that all water rate schedules, including Schedule F rates, were increased to the same rate by July 2019.[99] Because Proposition 218 mandates that property-related fees must be assessed at cost and no more than a parcel’s proportional benefit,[100] the harmonizing of rates among varying schedules was a way for Los Angeles to meet the “regulatory demands”[101] of Proposition 218.  With limited means of generating additional revenue, the City may not have been able to continue to permissibly subsidize Schedule F ratepayers (including community gardens, non-profit public parks, and similar irrigation for public benefit) while maintaining compliance with state constitutional provisions.[102][103]

a. Water Rates as Property-Related Fees

When Proposition 218 was initially approved, it was not clear that consumptive water rates were property-related fees and subject to Proposition 218’s requirements.[104] For example, in Richmond v. Shasta Community Services District, decided in 2004 the California Supreme Court held that fees for initial water connection were not property-related fees.[105] In dicta however, the court agreed with the plaintiffs that supplying water to a parcel was a property-related fee.[106] In 2006 in Bighorn-Desert View Water Agency v. Verjil the Court officially held that consumption-based water delivery charges were property-related fees and subject to the requirements of Proposition 218.[107]

b. Attack on Cross-Subsidies

Under Proposition 218, “no property owner’s fee is greater than the proportionate cost to provide the property-related service to his or her parcel.”[108] This principle is known as the proportionality requirement.  The Legislative Analyst’s Office in 1996 noted that implementation of this proportionality requirement could challenge cities’ implementation of local programs, including low-income subsidies, as such programs are prohibited as cross-subsidies under Proposition 218.[109] This means, for example, that LADWP could not increase rates in Schedule C over the cost of service to provide water supplies to Schedule C properties in order to provide water to Schedule F properties at a lower, subsidized rate.   

Impacts on subsidies were known prior to Proposition 218’s approval. The analysis of Proposition 218 written by the then-California attorney general and provided to voters with the 1996 ballot pamphlet, explicitly stated that Proposition 218 would cause decreased spending for local public services and governments may end “programs that allow low-income people to pay reduced property-related fees.”[110]

As a result of the efforts of the Tax Revolt, if LADWP did attempt to utilize a cross-subsidy to fund community garden water rates, the subsidy would violate Proposition 218.

c. Taxing to Fund Water Subsidies

Although Proposition 218 prohibits cross-subsidies, LADWP could impose a special tax to fund a Schedule F subsidy.[111] However, this tax would be subject to two-thirds voter approval, making the process politically difficult.[112]

An even more challenging taxation path is to adopt a general tax.  Here, the City of Los Angeles would have to levy the tax, as LADWP could not.[113] This would afford LADWP less control over use of the revenue and would not guarantee the revenue would utilized to reduce rates for Schedule F customers. Furthermore, using a city’s general fund revenues is not realistic because those funds are committed and necessary to support general fund services such as the fire department, public libraries, and parks.[114]

d. The Problem with Proportionality

The most significant challenge with Proposition 218 with respect to water rates relative to community gardens is proportionality.  Unless it costs more to service one property than another, LADWP, and other municipal utilities, cannot charge one customer more than any other customer.[115] Proposition 218’s concept of equality – proportionality – harms more vulnerable community members by prohibiting cross-subsidies and limiting the implementation of standard subsidies. 

Subsidies require some ratepayers to pay more than the cost of providing water service and thereby require some ratepayers to pay more than other similarly situated ratepayers. Many think that “[t]he general public should not be required to pay for the special benefits for the few,”[116] believing subsidies to be fundamentally unfair by providing a “free ride” at the expense of other ratepayers. However, such financial support is essential to the health and well-being of some of Los Angeles’ most vulnerable populations. Subsidizing actions that benefit these communities, such as providing lower cost water to community gardens, would allow urban agriculture to be affordable for communities that rely on growing their own food and provide a vital lifeline for Angelenos living in food deserts to support themselves and their families.[117]  Furthermore, gardens increase green spaces and reduce crime, benefitting the entire community.[118]

Ambiguities remain regarding how a city can implement proportionality requirement-compliant rate programs. Proportionality analysis is complicated because it is not always entirely clear what “proportional on a parcel basis” means.[119] Courts must independently review each challenged fee to determine whether it complies with Proposition 218’s proportionality requirement, and as a result agencies do not always know what standard a court will apply.[120]

City of Palmdale v. Palmdale Water District[121] provides guidance on the application of Proposition 218’s proportionality principle. Palmdale Water District (PWD) imposed a similar rate structure to LADWP prior to the April 2016 Ordinance. PWD used a tiered rate structure, with water becoming more expensive per unit at specified usage levels.[122] PWD also separated customers into different classes: single family residential, multifamily residential, commercial/industrial, irrigation, and construction and other customers.[123] All PWD customers paid tier 1 rates at 0 to 100 percent of their water budget allocation, but after 100 percent, the increased rate depended upon the customer category, with irrigation customers facing higher rates sooner.[124]

The Palmdale Court found PWD violated the proportionality requirement because (1) PWD’s rate structure targeted irrigation users to pay a higher and disproportionate rate; (2) the monthly charges were not tied to actual costs of providing water service to the benefitted parcels; and (3) the rate tiers were not proportional to providing water service.[125] While the Palmdale Court provided some guidance for proportionality analysis, it left open many questions regarding what proportionality “on a parcel basis” means.

Griffith v. Pajaro Valley Water Management Agency provided additional clarity. In that case, the Court of Appeal for the Sixth District noted that “Proposition 218 prescribes no particular method for apportioning a fee or charge other than that the amount shall not exceed the proportional cost of the service attributable to the parcel,” and determined that “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.”[126] The Court stated that Proposition 218 does not compel a parcel-by-parcel proportionality analysis and that the Palmdale decision does not disturb that fact.  The Griffith Court went on to explain that Palmdale’s outcome can be explained by the water district’s failure to justify disparate treatment among customer classes.[127]

Relying on Palmdale, but contradicting Griffith explicitly, the court in Capistrano Taxpayers Association v. City of San Juan Capistrano (Capistrano) held that the cost of service requirement under Proposition 218 applies to tiers of water usage.[128] In Capistrano, the City of San Juan Capistrano adopted a rate structure with four pricing tiers based on historical usage patterns: low, reasonable, excessive and very excessive.[129] The Court of Appeal for the Fourth District determined that the rates violated Proposition 218’s proportionality requirement because the city had not calculated the incremental cost of providing service under the progressively increased water rate tiers.[130] The Court further commented, “If the phrase ‘proportional cost of the service attributable to the parcel’ is to mean anything, it has to be that article XIII D, section 6, subdivision (b)(3) assumes that there really is an ascertainable cost of the service that can be attributed to a specific—hence that little word ‘the’—parcel. Otherwise, the cost of service language would be meaningless.”[131] The Capistrano Court more strictly interprets Proposition 218 than other California courts that have allowed greater flexibility in rate setting, like Griffith and Morgan v. Imperial Irrigation District.[132] The applicable standard of whether a cost is “attributable to the parcel” and the degree of flexibility afforded to local agencies thus remains not entirely clear.

3. LADWP’s April 2016 Ordinance Increasing Water Rates

In April 2016, the Los Angeles City Council passed Ordinance No. 184130, which amended LADWP’s water rate structure. Following Proposition 218’s protest procedures, LADWP sent appropriate notice to impacted property owners in December 2015.[133]  The Los Angeles City Council then held a series of three protest hearings on February 17, 2016,[134] March 1[135] and 2.[136] Because the proposed rate increase related to water service, voter approval was not required but compliance with Proposition 218’s substantive procedures and protest procedures were required.[137]

Following adoption of Ordinance 184130, all customers’ rates were increased, but none as steeply as those subject to LADWP’s Schedule F tier.[138] By way of example, Table 1 below compares Schedule F rate increases to Schedule A increases.  In March 2016, first tier Schedule F rates were $1.41/HCF.[139] As of the effective date of the ordinance in April 2016, Schedule F rates increased to $2.108/HCF.[140] By July 2016, rates increased to $2.831/HCF.[141]  In July 2017, rates were $3.498/HCF.[142]  In July 2018, rates received another increase to $4.363/HCF.[143] Schedule F received its final rate increase in July 2019. The Schedule F rate changed in July 2019 from a flat rate structure to being subject to several general provision adjustments. These General Provisions cover overhead costs of providing water including costs associated with securing and maintaining water supplies, improving water quality, Owens Valley regulatory adjustments, and low-income subsidy adjustment,[144] among others.[145] These changes make water rates more expensive and more variable than the 2018 rates.

By July 2019, water rates for first tier usage for Schedules A, B, C, E and F[146] were all the same—$2.095/HCF plus General Provisions F, G, H, K, L, R, and S adjustments.[147] The ordinance thus phased out any difference in water rates among different types of users, eliminating Schedule F subsidies and subjecting Schedule F ratepayers to a 289 percent rate increase over three years.[148] 

Table 1

Prior to the adoption of Ordinance 184130, the City’s Office of Public Accountability contracted Navigant to study the effects of proposed water rates.[149]  The Office of Public Accountability concluded the proposed water rate structure was reasonable.[150] However, Navigant did not separately analyze the dramatic impacts on Schedule F customers.[151] Indeed, the City of Los Angeles and the Office of Public Accountability did not provide the necessary data to Navigant to complete such an analysis.[152]  Therefore, the Navigant study did not examine rate increase impacts on customers as it did for other ratepayers. The study estimated that Schedule A customers, for example, would experience a rate increase between 2.7 and 8 percent.[153]  Nearly sixty-five percent of Schedule A ratepayers would not see their rates increase more than 5.26 percent.[154] But similar data was not analyzed in Navigant’s study to determine whether rates for Schedule F were reasonable.[155]  Although Navigant did not study rate increases for Schedule F, the Office of Public Accountability recognized that there would be a “[l]arge but necessary increase for public irrigation.”[156]

That the Office of Public Accountability did not direct Navigant to study effects on Schedule F ratepayers suggests that such analysis on this point would be futile from a legal perspective. Navigant specifically acknowledged the challenges associated with developing a water rate structure that is compliant with Proposition 218.[157] The study indicated that the proposed rate structure was designed to comply with the Proposition 218’s cost of service requirement and “avoid subsidization from one customer class to another.”[158]  There was thus little advantage in studying the customer impacts of the proposed increases to Schedule F ratepayers because Proposition 218’s requirements prohibited subsidization regardless of the impact to the community. 

4. Community Response to LADWP Ordinance 184130

Community garden members and their leadership were frustrated at the increase in water rates that occurred as a result of LADWP Ordinance 184130.[159] During the comment period before the LADWP adopted the ordinance, the Los Angeles Food Policy Council (LAFPC), the LACGC, and garden leadership submitted written protests to the rate increase, warning the City Council of the negative effects associated with repealing Schedule F discounts.[160]  In total, the Los Angeles City Council received 2,289 official protest letters in addition to other communications from the public and speakers at the public hearings on February 17, March 1, March 2, and March 15.[161]

Many community gardeners and supporting organizations do not understand why their water rates have increased so dramatically.[162] Many believe the city to be responsible.[163] LACGC Executive Director, Julie Beals, indicated city representatives told her they cannot do anything about Schedule F increases and it was something “to take to Sacramento.”[164] As a result, advocacy and organizing efforts have been unable to meaningfully address the Schedule F rate increases.

California Tax Revolt: The Worst Tax Deal Ever Made

Proposition 218 is also known as “The Right to Vote on Taxes Act.”[165] Proposition 218 was marketed as a modern-day Boston Tea Party—a protest to taxation without representation. One of the California Tax Revolt’s strongest supporters – the Howard Jarvis Taxpayers Association – describes Proposition 218 as follows: “Proposition 218 would remedy this grossly unfair situation by giving the voters a more evenhanded say in the taxes levied upon them and their property.”[166] However, Proposition 218 gave more voting rights on those taxes to property owners than the general electorate, disenfranchising renters and other non-landowning community members.[167]

The Howard Jarvis Taxpayers Association states on its website: “Proposition 218 tackles the age-old question: Who should control the most important function of government, taxation? Those who think the safest place for this power is with the people will vote yes on Proposition 218.”[168] The 1996 ballot stated, “Proposition 218 will allow you and your neighbors – not politicians – to decide how high your taxes will be. It will allow those who pay assessments to decide if what they are being asked to pay for is worth the cost.”[169] The problem is, with community garden water subsidies—as with any subsidy— those who pay the tax are not those who would receive the benefit. Does that mean, however, that the benefit should not be provided?  Private interests are frequently not in an objective position to weigh their costs of paying a tax with the cost of a community losing access to fresh produce.

Proposition 218 was marketed as a tool of fairness and democracy, yet its implementation has undermined those values. Procedurally, while Proposition 218 increased voters’ ability to have a say on taxes, it only amplified some voters’ voices while eliminating others.[170] Substantively, Proposition 218 limited local governments’ ability to raise revenue and defunded numerous subsidy programs.

Limitations on governments’ ability to raise revenue and impacts on low-income and subsidy programs were not mistakes or unintended consequences. This now-problematic nature of Proposition 218 was known prior to its approval.[171]  Property owners benefit the most from the Tax Revolt efforts, especially those with high value properties that were purchased many years ago. These series of propositions, especially Propositions 13 and 218, were sold to the public as increasing individuals’ say in taxes and preventing the elderly from being unable to afford their property taxes.[172] Though these initiatives appeared to address the concerns of the middle class, “lawmaking by initiative has become less an expression of the public will and more a device by which special interest groups manipulate public policy to further their political and financial interests.”[173] 

Although Proposition 218 opponents recognized the inequities that would result,[174] Proposition 218 may have been overshadowed by other political events of the day. Proposition 209, prohibition on affirmative action, appeared in 1996 on the same ballot.[175] A further reason for Proposition 218’s approval may have been declining confidence in government,[176] notwithstanding the undemocratic consequences of implementation.

Need for Reform

1. Certain Legal Strategies

This project began as a search for legal solutions to circumvent the Tax Revolt limitations on retail water rates for community gardens. Unfortunately, the courts and Tax Revolt proponents, like the Howard Jarvis Taxpayers Association,[177] have closed most if not all of the legal opportunities for alternative rate structures. Developing another category of fees for example was prohibited by Proposition 26.[178] Proposition 218 prohibited special districts from levying special taxes and there is no guarantee that a municipality will dedicate often already allocated unrestricted ad valorum funds to support a subsidy.[179] Defining metered water rates as not property-related fees was eliminated by Bighorn.[180] The Legislature cannot adopt statutes in conflict with the Constitution nor can agencies and the courts are vested with and have exercised authority to interpret the State Constitution on these points. It is possible for a city to contract water utilities to a private contractor who would not be subject to Prop 218 and Proposition 26,[181] but the city would lose control of the service and the contractor may choose to not offer the water subsidies[182] for community gardens.[183]

Recently, there has been an attempt to make safe drinking water affordable for low-income families, but proponents have struggled with the same constitutional constraints described here. For example, in 2012 with the adoption AB 685, California recognized that human beings have a right to “safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.”[184] In 2015, AB 401 directed the State Water Resource Control Board to develop a plan to fund and implement the Low-Income Water Rate Assistance Program.[185] The Board’s final report was released in February 2020.[186] In its report, the Board noted that “funding individual [water rate assistance] programs at the system level without violating constitutional restrictions would likely be infeasible for publicly owned water systems” due to limitations imposed by Propositions 218 and 26.[187] As a result, the Board recommended a statewide progressive tax to fund the program, but indicated that passing any new statewide tax or surcharge requires a supermajority vote in the Legislature or a ballot initiative.[188]

There have been numerous attempts to amend the California Constitution to ease ratemaking restrictions on municipalities – none has yet been successful. For example, in 2017, the California Senate proposed a constitutional amendment to allow local agencies to set water rates to encourage water conservation and reduce charges for low-income customers.[189] However, the bill has not moved out of committee.[190] Additionally, a citizen’s initiative in 2015 proposed replacing the water rate setting proportionality requirement with the requirement that a fee (rate) must bear a “fair or reasonable relationship to costs” as opposed to strict cost proportionality.[191] The initiative was circulated in early 2016, but failed to obtain enough signatures to qualify to appear on the ballot.[192]

2. Vote and Advocate for Special Taxes

Due to the Constitutional strictures outlined above, it appears “the only unambiguously lawful way to provide lifeline services is to use other pre-existing revenue sources . . . or to enact a new special tax.”[193] Because the only burden to a special tax to subsidize community garden water rates is political will as opposed to legal hurdles, it may be the best way to continue worthy subsidies such as those contained in Schedule F before amendment. It is vital the electorate consider and vote on special taxes before them in an attempt to overcome the supermajority requirement.

3. Tax by Initiative

Special and general taxes proposed by initiative may only require simple majority, not two-thirds, voter approval.[194] In 2017, the California Supreme Court held that local taxes imposed via initiative are subject to less stringent requirements than taxes imposed by local governments in California Cannabis Co. v. City of Upland.[195] The holding in Upland was limited to procedural requirements: a voter initiative was not required to be presented in a general election, and could instead be presented in a special election.[196] Immediately after the Upland case, the city attorney of San Francisco issued a memorandum concluding that the court’s analysis also applies to the two-thirds voting requirement for special taxes.[197] However, there is a reading of the constitutional provisions that indicates the electorate intended to subject itself to the two-thirds approval requirement as well as local governments.[198]

In 2018, eight local citizen initiatives proposing special taxes received more than a simple majority, but less than a super majority vote.[199] Local officials declared three of the measures defeated – Measure T in Avalon (April 2018); Measure C in Downieville Fire Protection District (June 2018); Measure P in Fresno (November 2018) – because they did not meet the supermajority threshold.[200] Fresno’s decision has been challenged in court.[201] The remaining five were deemed approved – Measure C in Del Norte County (November 2018); Measure AA in Oakland (November 2018)[202]; Proposition C in San Francisco (June 2018); and Proposition G in San Francisco (June 2018)[203]; Proposition C in San Francisco (November 2018) – all of which were challenged in litigation except the Del Norte measure.[204] 

In Fresno, the trial court determined that a two-thirds vote was required to pass a park sales tax initiative.[205] Defendants filed an appeal on November 13, 2019 and the action is now pending before the Fifth Appellate District.[206] In San Francisco, the trial court came to the opposite conclusion and found both Propositions C, which increased business taxes to provide for childcare and early education (June 2018) and homelessness services (November 2018), to have been lawfully approved.[207] Plaintiffs appealed on August 7, 2019 and the action is now pending before the First Appellate District.[208]

Until these cases resolve, it is uncertain whether tax by initiative is more politically feasible than tax by local government. If the taxes are upheld, there may be precedent for setting water rates by initiative. In the city of Dunsmuir, Leslie Wilde obtained enough signatures to put a new water rate structure on the ballot.[209] Although the initiative was ultimately rejected by voters in November 2016,[210] it does provide evidence setting water rates via initiative is possible, though the effectiveness and wisdom of doing so is not yet clear.

4. Vote for Reform

Full or partial repeals of Propositions 13, 62, 218 and 26 would be a step towards increasing municipalities’ flexibility to provide water subsidies to community gardens and other sensitive groups. In its 2015 System Rate Report, LADWP noted that were changes to Proposition 218 to occur, that “it would likely result in a greatly simplified rate structure for LADWP”, allowing LADWP to adopt a “more transparent, easily understandable approach.”[211] Even if a repeal or amendment does not specifically affect water rates or property-related fees, if it gives more options to local governments to raise revenue, local governments and agencies may be able to find opportunities to fund subsidy programs.

5. November 2020 Ballot Initiative

An opportunity to partially repeal Proposition 13 has qualified and is scheduled to appear on the November 3, 2020 ballot.[212] The “split roll” measure, entitled the California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative[213], reduces Proposition 13 protections for commercial and industrial properties, while retaining them for homeowners.[214] Some commercial properties that have not relocated or changed owner, like Disneyland, still pay one percent tax based on the value of the property in the 1970s.[215] Neighboring homes and businesses pay more in taxes simply because their properties were purchased later.[216] The split roll measure would require commercial and industrial properties to be reassessed every three years.[217] The Legislative Analyst’s Office estimates annual net revenue increases between $6.5 and $10.5 billion statewide.[218] Of those funds, a USC study estimates Los Angeles County to receive the largest share: approximately $3.6 billion annually.[219]

While the split roll measure does not directly impact water rates or property-related fees, it would provide municipalities with additional unrestricted revenue to fund subsidies such as those for community gardens and other important local government programs.[220]

Conclusion

Water subsidies are important for community gardens because they help low-income community members reduce their grocery bills while also increasing community access to organic fresh fruits and vegetables, especially in food deserts. This increases the health and quality of life in these communities and provides a place for the community to interact and congregate. Community gardens are a valuable local resource and they should not be forced to cease operations due to a drastic increase in the basic cost of water service. We must work to overcome limitations imposed by limitations under the California Constitution to ensure their survival.

[1] Urban Agriculture Working Group Food Policy Council, Los Angeles Community Garden Council, The Impact of Water Rate Increases on Community Gardens (June 13, 2017) (unpublished presentation slides) (on file with author).

[2] Telephone Interview with Julie Beals, Executive Director, Los Angeles Community Garden Council (Mar. 1, 2019); Urban Agriculture Working Group Food Policy Council, supra note 1.

[3] For example, in the City of El Monte 51.3% of residents are first generation immigrants.  Local: Mapping L.A., L.A. Times (last visited March 3, 2020), https://www.latimes.com/local/lanow/la-me-ln-measure-w-20181130-story.html.http://maps.latimes.com/neighborhoods/neighborhood/el-monte/#population. El Monte is 72.5% Latino, 18.5% Asian, 7.3% white, 0.5% black, and 1.2% all other ethnicities. Id. The average annual income is $44,415 with 27.5% of residents earning less than $20,000 per year and 30.6% earning between $20,000 and $40,000 annually. Id. Additionally, 55.8% of residents have less than a high school education.  Id.  The Los Angeles Times has compiled this data for each neighborhood within Los Angeles County.  See id.

[4] Local governments’ ability to raise revenue is vital to California’s water system. A study conducted in 2014 found that local utilities and governments raise 85 percent of the funds used to support California’s water system through local fees and taxes. As California’s Tax Revolt has made it increasingly difficult for local governments to raise local taxes and fees, state and local water systems remain under funded by $2-3 billion annually. Brian Gray, et al., Paying for Water in California: The Legal Framework, 65 HASTINGS L.J. 1603, 1608 (2014) (citing to Hanak et al., Pub. Policy Inst. of Cal., Managing California’s Water: From Conflict to Reconciliation 253-313 (2011)).

[5] CAL. CONST. art. XIII D, §6 (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[6] These are the two most impactful for retail water service.

[7] Although this paper focuses on Los Angeles, because Proposition 218 is a state initiative, this is likely a state-wide problem.

[8] University of California, Division of Agriculture and Natural Resources, Community Gardens, Marin Master Gardeners (last visited May 5, 2019), http://marinmg.ucanr.edu/Great_Gardening_Information/Marin_Community_Gardens.

[9] Urban Agriculture Working Group Food Policy Council, supra note 1.

[10] Telephone Interview with Julie Beals, supra note 2; Urban Agriculture Working Group Food Policy Council, supra note 1.

[11] La Madera Community Garden is not within the City of Los Angeles, but faces similar rate increases.

[12] Interviews with community gardeners, La Madera Community Garden (Apr. 13, 2019).

[13] Urban Agriculture Working Group Food Policy Council, supra note 1.

[14] Julie Beals, Greeting Letter, Los Angeles Community Garden Council (last visited May 5, 2019), http://lagardencouncil.org/about/greeting-letter/.

[15] Urban Agriculture Working Group Food Policy Council, supra note 1.

[16] Id.; Interviews with community gardeners, supra note 12.

[17] Project EverGreen, Environmental Fact Sheet: The Environmental Benefits of Green Spaces (last visited May 5, 2019), https://projectevergreen.org/wp-content/uploads/2013/07/EnvironmentalBenefitsofGreenSpace.pdf.

[18] Id.

[19] Id. Los Angeles recently passed Measure W, taxing impermeable surfaces in an effort to increase permeable surfaces in the city to make the city more “water resilient in the face of drought and climate change.” Nina Agrawal, L.A. County stormwater tax officially passes, L.A. Times (Nov. 30, 2018), https://www.latimes.com/local/lanow/la-me-ln-measure-w-20181130-story.html.

[20] Project EverGreen, supra note 17.

[21] Telephone Interview with Julie Beals, supra note 2.

[22] Telephone Interview with Julie Beals, supra note 2.

[23] Interviews with community gardeners, supra note 12.

[24] Julie Beals, Greeting Letter, supra note 14.

[25] Id.; Telephone Interview with Julie Beals, supra note 2.

[26] Interviews with community gardeners, supra note 12.

[27] Email from Julie Beals, Executive Dir., LACGC, to Laura Yraceburu, Class of 2020, UCLA School of Law (May 13, 2020 11:50 PDT) (on file with author).

[28] Id.

[29] This fee is a 10 percent fee charged to individual gardens that choose to have LACGC provide accounting and business services.  Email from Julie Beals, Executive Dir., LACGC, to Laura Yraceburu, Class of 2020, UCLA School of Law (May 26, 2020 08:33 PDT) (on file with author).

[30] Email from Julie Beals (May 13, 2020), supra note 22.

[31] Email from Julie Beals (May 13, 2020), supra note 22..

[32] Urban Agriculture Working Group Food Policy Council, supra note 1.

[33] Telephone Interview with Julie Beals, supra note 2.

[34] Telephone Interview with Julie Beals, supra note 2.

[35] Telephone Interview with Julie Beals, supra note 2.

[36] Interviews with community gardeners, supra note 12.

[37] Interviews with community gardeners, supra note 12.

[38] Interviews with community gardeners, supra note 12.

[39] Interviews with community gardeners, supra note 12.

[40] Urban Agriculture Working Group Food Policy Council, supra note 1.

[41] Urban Agriculture Working Group Food Policy Council, supra note 1.

[42] Gray, supra note 4 at 1608.

[43] Stacey Simon, Note, A Vote of No Confidence: Proposition 218, Local Government, and Quality of Life in California, 25 Ecology L.Q. 519, 529 (1998).

[44] Gray, supra note 4, at 1608.

[45] Simon, supra note 43, at 525.

[46] Id. at 538.

[47] Id.

[48] Gray, supra note 4, at 1610.

[49] Id.

[50] Gray, supra note 4, at 1609.

[51] Nordlinger v. Hahn, 505 U.S. 1, 5 (1992).

[52] Id.

[53] Id. at 6.

[54] Simon, supra note 43, at 526. See Knox v. City of Orland, 841 P.2d 144 (Cal. 1992); City and Cty. of San Francisco v. Farrell, 648 P.2d 935 (Cal.1982). See also Simon, supra note 43, at 529.

[55] Gray, supra note 4, at 1610.

[56] Id. at 530; League of California Cities, Propositions 26 and 218: Implementation Guide 16 (May 2017).

[57] League of California Cities (2017), supra note 56, at 16.

[58] Id.

[59] Cal. Const. art. XIII C, §1(a) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.)

[60] Id. §1(d).

[61] Id. §2(c).

[62] Id. §2(c).

[63] Id. §2(d).

[64] Id.

[65] “‘Special district’ means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies.” Id. §1(c).

[66] Id. §2(a).

[67] CAL. CONST. art. XIII D, §2(e) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[68] Simon, supra note 43, at 536.

[69] CAL. CONST. art. XIII D, §6(a) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[70] Id. §6(a)(1).

[71] Id.

[72] Id. §6(a)(2).

[73] Id.

[74] Id.

[75] Id. §6(c).

[76] Id.

[77] CAL. CONST. art. XIII D, §6(b) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[78] “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.” Id. §6(b)(5).

[79] See, e.g., Brydon v. East Bay Municipal Water District, 24 Cal. App. 4th 178, 196 (1994). In Brydon v. East Bay Municipal Water District, the court articulated the appropriate standard of review was whether the agency’s “actions were arbitrary, capricious or entirely lacking in evidentiary support.”

[80] See, e.g., City of Palmdale v. Palmdale Water Dist., 131 Cal Rptr. 3d 373 (2011). The court in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano stated, “it is not enough that the agency have substantial evidence to support its action. That substantial evidence must itself be able to withstand independent review.” Capistrano Taxpayers Ass’n, Inc. v. City of San Juan Capistrano, 235 Cal. App. 4th 1493, 1507 (2015) (overruled on other grounds).

[81] Proposition 26 did have other effects, particularly in limiting regulatory fees. Proposition 26 prohibits fees that “require resource users to pay for harm that they might have caused by past activities or for harm caused by others.”  Gray, supra note 4, at 1620. These issues will not be addressed as they are outside of the scope of this paper. However, it should be noted that the Tax Revolt had significant consequences on environmental regulatory flexibility and not only limited taxes on polluters or other causers of environmental harm, but also limited the extent to which those harmed could be compensated. Id.

[82] League of California Cities (2017), supra note 56, at 18.

[83] CAL. CONST. art. XIII C, §1(e) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[84] Bighorn-Desert View Water Agency v. Verjil, 39 Cal. 4th 205, 217 (2006).

[85] CAL. CONST. art. XIII C, §1(e)(7) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[86] Id. §1(e).

[87] Finances and Reports: Schedule A – Residential, LADWP,  https://ladwp.com/ladwp/faces/ladwp/aboutus/a-financesandreports/a-fr-waterrares/a-fr-wr-schedulearesidential?_adf.ctrl-state=jr6x01lst_4&OwnesLake))&&_afrLoop=870844036891236 (last visited May 5, 2019). Schedule A is single-unit residential. Id. Schedule B is multiple-unit residential. Id. Schedule C is commercial. Id. Schedule D is recycled water. Id. Schedule E is private fire service. Id. Schedule F is publicly sponsored irrigation. Id.

[88] Customer Service: Understanding Your Rates, LADWP, https://www.ladwp.com/ladwp/faces/wcnav_externalId/r-cs-wtr-rate?_adf.ctrl-state=psy4jl3wk_4&_afrLoop=871411777313373 (last visited May 5, 2019).  

[89] Specifically, Schedule F is “applicable to water services used exclusively for: irrigation of grounds dedicated for public use, operated on a non-profit basis and open to the general public with three acres minimum; commercial agricultural, horticultural and floricultural uses with five acres minimum (operated as bonafide businesses); irrigating playing fields with five acres minimum that are operated by non-profit organizations solely for the purposes of youth sports, open to the public; irrigation for community gardens that are open to the public; uses in parks, playgrounds, golf courses, and lakes that are dedicated exclusively for public recreational uses, open to the general public, and operated on a nonprofit basis; and irrigation in medians in public streets that have complied with best management practices for medians.”

Water Rates: Other Water Rates, LADWP, https://www.ladwp.com/ladwp/faces/ladwp/aboutus/a-financesandreports/a-fr-waterrares/a-fr-wr-otherwaterrates?_adf.ctrl-state=14mdpviofn_4&isNoLocale=true&&_afrLoop=50208840951130 (last visited May 8, 2020) (emphasis added). See also Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[90] Telephone Interview with Julie Beals, supra note 2.

[91] Schedule C. See Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[92] Schedule A.  See id.

[93] Schedule B.  See id.

[94] Schedule C.  See id.

[95] Schedule D.  See id.  Recycled water is excluded from analysis throughout this paper because recycled water costs less to provide; therefore, Proposition 218 concerns are not triggered by a different rate in the 2016 Ordinance.

[96] Schedule E.  See id.

[97] The rates for Schedules A, B, and C were identical prior to the April 2016 ordinance; however, none of the ordinary ratepayers (excluding recycled water and private fire service) paid a rate anywhere close to as low as Schedule F. LADWP noted that Schedule F “revenue is significantly under cost, and this situation will be gradually addressed over time.” L.A. Dept. of Water and Power, Water System Rate Action Report, Chapter 5: Water Rate Design 68 (July 2015) [hereinafter Rate Design Report]. In 2015, for example, Schedule F ratepayers were paying approximately 25 percent of the cost of service, leaving the Department with a deficit attributable to Schedule F of approximately $33 million per year. Id.

[98] L.A. Dept. of Water and Power, Notice of Proposed Water Rate Restructure and Increases for the Los Angeles Department of Water and Power and Associated Public Hearing (Dec. 2015) https://d3n8a8pro7vhmx.cloudfront.net/ladwp/pages/41/attachments/original/1450296773 (last visited May 6, 2019) [hereinafter Notice of Proposed Water Rate].

[99] Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[100] CAL. CONST. art. XIII D, §6(b)(3) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[101] Notice of Proposed Water Rate, supra note 98.

[102] Navigant Consulting Inc., Review of LADWP’s 2015 Power and Water Rate Increase Proposal, in Office of Public Accountability, A Review of LADWP’s 2015 Water Rate Proposal 22 (2015).

[103] Attempts were made to contact representatives within LADWP directly regarding the rate increases.  Although these representatives had spoken with LACGC Executive Director Julie Beals in the past, they did not return my phone calls or emails.

[104] Legislative Analyst’s Office, Understanding Proposition 218 6 (1996).

[105] Richmond v. Shasta Community Services Dist., 83 P.3d 518, 527-28 (2004)

[106] Id. at 528.

[107] Bighorn-Desert View Water Agency v. Verjil, 138 P.3d 220, 227 (2006).

[108] Legislative Analyst’s Office, Understanding Proposition 218 12 (1996).

[109] Id.

[110] Voter Approval for Local Government Taxes, Limitations on Fees, Assessments, and Charges, California Proposition 218 73 (1996) http://repository.uchastings.edu/ca_ballot_props/1138.

[111] See CAL. CONST. art. XIII C, §1(e) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[112] See id.

[113] See id. §2(a).

[114] E-mail from Kelly Salt, Partner, Best Best & Krieger, to Laura Yraceburu, Class of 2020, UCLA School of Law (Mar. 26, 2019, 16:44 PDT) (on file with author).

[115] See CAL. CONST. art. XIII D, §6(b)(3) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[116] Solvang Mun. Improvement Dist. v. Bd. of Supervisors, 112 Cal. App. 3d 545, 552 (Ct. App. 1980). This case discusses subsidies in the context of special assessments, but the concerns about subsidies pertain to assessments in a similar way as they pertain to fees.

[117] Telephone Interview with Julie Beals, supra note 2.

[118] Telephone Interview with Julie Beals, supra note 2.

[119] League of California Cities, Propositions 26 and 218: Implementation Guide 90–94 (May 2019). See e.g., Capistrano Taxpayers Association v. City of San Juan Capistrano, 235 Cal. App. 4th 1493 (2015); City of Palmdale v. Palmdale Water District, 198 Cal. App. 4th 925 (2011); Griffith v. Pajaro Valley Water Management Agency, 220 Cal. App. 4th 586, 600-601 (2013), disapproved on other grounds by City of San Buenaventura v. United Water Conservation District, 3 Cal. 5th 1191 (2017); Newhall County Water District v. Castaic Lake Water Agency, 243 Cal. App. 4th 1430 (2016).

[120] League of California Cities (2019), supra note 119, at 93–94.

[121] City of Palmdale v. Palmdale Water Dist., 131 Cal Rptr. 3d 373 (2011).

[122] Id. at 376.

[123] Id. at 375.

[124] Id. at 376.

[125] Id. at 378-79.

[126] Griffith v. Pajaro Valley Water Management Agency, 220 Cal. App. 4th 586, 601 (2013), disapproved on other grounds by City of San Buenaventura v. United Water Conservation District, 3 Cal. 5th 1191 (2017).

[127] Id.

[128] Capistrano Taxpayers Assn., Inc. v. City of San Juan Capistrano, 186 Cal. Rptr. 3d 362, 373–74 (2015), as modified (May 19, 2015).

[129] Id. at 366.

[130] Id. at 372.

[131] Id.

[132] Morgan v. Imperial Irrigation Dist., 223 Cal. App. 4th 892, 923 (2014). 

[133] See Notice of Proposed Water Rate, supra note 98.

[134] See Agenda, Los Angeles City Council, Wednesday, February 17, 2016 10:00 AM, http://clkrep.lacity.org/granicus/2016/02172016_cal.htm.

[135] See Agenda, Los Angeles City Council, Tuesday, March 1, 2016 10:00 AM, http://clkrep.lacity.org/granicus/2016/03012016_cal.htm.

[136] See Agenda, Los Angeles City Council, Wednesday, March 2, 2016 10:00 AM, http://clkrep.lacity.org/granicus/2016/03022016_cal.htm.

[137] CAL. CONST. art. XIII C, §6(c) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[138] Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[139] Urban Agriculture Working Group Food Policy Council, supra note 1.

[140] Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[141] Id.

[142] Id.

[143] Id.

[144] Any low-income water rate subsidy must also comply with Proposition 218; however, if the subsidy existed prior to Proposition 218, such a subsidy would be permitted, so long as it was not increased or extended. See CAL. CONST. art. XIII C, §2(d) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.). See also Ellen Hanak, et al., Public Policy Institute of California, Paying for Water in California 32 (Mar. 2014), https://www.ppic.org/content/pubs/report/R_314EHR.pdf. The specific details of LADWP’s compliance with Proposition 218 with respect to its low-income and lifeline programs are beyond the scope of this paper.

[145] Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[146] Schedule D is for recycled water and may have a different cost for provision of water. The ordinance indicate recycled water rates are set by contract. This likely avoids Proposition 218 issues because of the differing cost of providing recycled water versus potable water.

[147] Los Angeles, Cal., Ordinance 184130 (April 15, 2016).

[148] Urban Agriculture Working Group Food Policy Council, supra note 1.

[149] See Navigant Consulting Inc., supra note 102.

[150] Navigant Consulting Inc., supra note 102, at 1.

[151] Navigant Consulting Inc., supra note 102, at 77.

[152] Navigant Consulting Inc., supra note 102, at 77.

[153] Navigant Consulting Inc., supra note 102, at 77–78.

[154] Navigant Consulting Inc., supra note 102, at 78.

[155] However, LADWP’s initial report did acknowledge that the proposed rates would increase Schedule F by 289 percent. See Rate Design Report, supra note 97, at 70.

[156] Office of Public Accountability & Ratepayer Advocate, City of Los Angeles, Review of the 2015 LADWP Water Rate Proposal 6 (Feb. 17, 2016), http://clkrep.lacity.org/onlinedocs/2015/15-1543_misc_U_2-17-16.pdf.

[157] Navigant Consulting Inc., supra note 102, at 70–71.

[158] Navigant Consulting Inc., supra note 102, at 22-23.

[159] Telephone Interview with Julie Beals, supra note 2; Interviews with community gardeners, supra note 12.

[160] Letter from David Garden, Representative of the Crenshaw Community Garden, to Felipe Fuentes, Councilmember, City of Los Angeles (Feb. 17, 2016); Letter from Clare Fox, Executive Director, Los Angeles Food Policy Council, to Felipe Fuentes, Councilmember, City of Los Angeles (Feb. 17, 2016).

[161] See Council File: 15-1543, LACityClerk Connect, https://cityclerk.lacity.org/lacityclerkconnect/index.cfm?fa=ccfi.viewrecord&cfnumber=15-1543 (last visited May 8, 2020).

[162] Interviews with community gardeners, supra note 12; Telephone Interview with Julie Beals, supra note 2.  Although at least one representative acknowledged that Proposition 218 played a role in Schedule F increases.  See Item 10: Consideration of Proposed Water Rate Ordinance, LADWP Board of Commissioners Meeting Dec. 15, 2015 at 57:39–59:58 (public comment by David Garden, community gardener), http://ladwp.granicus.com/MediaPlayer.php?view_id=2&clip_id=764.

[163] Telephone Interview with Julie Beals, supra note 2; Interviews with community gardeners, supra note 12.

[164] Telephone Interview with Julie Beals, supra note 2.

[165] City of Palmdale v. Palmdale Water Dist., 131 Cal Rptr. 3d 373, 376 (2011).

[166] Proposition 218: Closing the Assessment Loophole in Proposition 13, Howard Jarvis Taxpayers Association, https://www.hjta.org/propositions/proposition-218/closing-assessment-loophole-proposition-13/ (last visited May 5, 2019). 

[167] CAL. CONST. art. XIII D, §6(c) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[168] Proposition 218: Closing the Assessment Loophole in Proposition 13, Howard Jarvis Taxpayers Association, www.hjta.org/propositions/proposition-218/closing-assessment-loophole-proposition-13/ (last visited May 5, 2019).

[169] Voter Approval for Local Government Taxes, Limitations on Fees, Assessments, and Charges, supra note 110, at 76.

[170] Voter Approval for Local Government Taxes, Limitations on Fees, Assessments, and Charges, supra note 110, at 76-77; CAL. CONST. art. XIII D, §6(a), (c) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[171] This is one example that calls into question the decision to allow lawmaking by initiative.  Legislatures tend to adopt law prohibit discrimination and protecting minority rights while voter sponsored initiatives and referendums are more likely to revoke those protections. Cynthia L. Fountaine, Lousy Lawmaking: Questioning the Desirability and Constitutionality of Legislating by Initiative, 61 S. Cal. L. Rev. 733, 749 (1988).

[172] Voter Approval for Local Government Taxes, Limitations on Fees, Assessments, and Charges, supra note 110, at 76.

[173] Fountaine, supra note 171, at 737.

[174] See Voter Approval for Local Government Taxes, Limitations on Fees, Assessments, and Charges, supra note 110, at 77.

[175] California Affirmative Action, Proposition 209 (1996), Ballotpedia https://ballotpedia.org/California_Affirmative_Action,_Proposition_209_(1996) (last visited May 6, 2019).

[176] Simon, supra note 43, at 538.

[177] Howard Jarvis Taxpayers Association, https://www.hjta.org/ (last visited May 5, 2019).

[178] CAL. CONST. art. XIII C, §1(e) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[179] CAL. CONST. art. XIII D, §6(b)(5) (West, Westlaw through Ch. 5 of 2019 Reg. Sess.).

[180] Bighorn-Desert View Water Agency v. Verjil, 138 P.3d 220, 227 (2006).

[181]The state’s Public Utilities Commission authorizes private energy and water utilities to cross-subsidize low-income customers with rate revenues, and lifeline rates funded in this way are common in both sectors. Hanak, supra note 144, at 32.

[182] Private companies are governed by the Public Utilities Commission and are statutorily mandated to provide low-income subsidies. CARE/FERA Programs, California Public Utilities Commission, https://www.cpuc.ca.gov/lowincomerates (last visited May 8, 2020). However, low-income subsidies tend to be limited to residential use and would likely not extend to community gardens.

[183] Privatization of government efforts should be cautioned on a number of other, more important grounds. Utilities services, especially water, tend to be poor candidates for privatization because of the tendency for natural monopolies. It is inefficient to have two sets of thousands of miles of water pipes for two competitors’ separate water systems. Andrew Linard, Deputy Director of Water Engineering and Technical Services, Los Angeles Department of Water and Power, Panel at the 2019 Kern County Water Summit (Mar. 7, 2019).

[184] A.B. 685, 2011-2012, Reg. Sess. (Cal. 2011). There had been a prior failed attempt to state this policy in statute in October 2009. James Workman, For California, second time’s a charm: Why the right to water depends on sustained political will and follow-through, The Source (Nov. 20, 2018), https://www.thesourcemagazine.org/for-california-second-times-a-charm/.

[185] A.B. 401, 2015-2016, Reg. Sess. (Cal. 2015).

[186] See Gregory Pierce, et al., California State Water Resources Control Board & UCLA Luskin Center for Innovation, Recommendations for Implementation of a Statewide Low-Income Water Rate Assistance Program (Feb. 2020).

[187] Id. at 22–23.

[188] Id. at 47–48.

[189] See S.C.A. 4, 2017–2018, Reg. Sess. (Cal. 2017).

[190] Bill History, SCA-4 Water Conservation, California Legislative Information, http://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=201720180SCA4 (last visited May 8, 2020).

[191] A.G. File No. 2015-116, Legislative Analyst’s Office (Feb. 3, 2016), https://lao.ca.gov/BallotAnalysis/Initiative/2015-116 (last visited May 8, 2020).

[192] See Local Government. Water, Sewer, Stormwater, and Flood Control Services. Fee Structures. Initiative Constitutional Amendment., Cal. Initiative 1775, UC Hastings Scholarship Repository (Feb. 18, 2016), https://repository.uchastings.edu/ca_ballot_inits/2042; News Release, Alex Padilla, Cal. Secretary of State, Proposed Initiative Enters Circulation (Feb. 18, 2016), https://www.sos.ca.gov/administration/news-releases-and-advisories/2016-news-releases-and-advisories/proposed-initiative-enters-circulation17/; California Alternative Local Funding for Water, Sewer, Stormwater and Flood Control Services Initiative (2016), Ballotpedia, https://ballotpedia.org/California_Alternative_Local_Funding_for_Water,_Sewer,_Stormwater_and_Flood_Control_Services_Initiative_(2016) (last visited May 8, 2020).

[193] Gray, supra note 4, at 1629.

[194] Robert P. Merten, The Sequel to Upland: A California Supermajority Tax Showdown, 2019 Law360 50-39 (2019).

[195] “Unless a provision explicitly constrains the initiative power or otherwise provides a similarly clear indication that its purpose includes constraining the voters’ initiative power, we will not construe provisions as imposing such limitations.”  California Cannabis Co. v. City of Upland, 3 Cal. 5th 924, 948 (2017).

[196] Id. at 931.

[197] Merten, supra note 194.

[198] Merten, supra note 194.

[199] California Proposition 218, Voter Approval Required Before Local Tax Increases (1996), Ballotpedia, https://ballotpedia.org/California_Proposition_218,_Voter_Approval_Required_Before_Local_Tax_Increases_(1996) (last visited May 8, 2020).

[200] Id.

[201] Sarah Ravani, Judge rules against Oakland on education measure that fell short of votes, S.F. Chronicle (Oct. 15, 2019), https://www.sfchronicle.com/bayarea/article/Judge-rules-against-Oakland-on-education-measure-14537163.php.

[202] In Oakland, a superior court judge ruled that Measure AA required a two-thirds majority to pass. Id. However, this litigation is less useful for determining the direction of taxing by initiative than the Fresno and San Francisco cases because the Oakland measure included a supermajority requirement in the text of the initiative.  Id.

[203] Proposition G litigation is pending in Superior Court before the same judge that ruled on San Francisco’s Propositions C. Dominic Fracassa, Judge says SF correct in passing two tax measures on simple majority vote, S.F. Chronicle (July 5, 2019), https://www.sfchronicle.com/bayarea/article/Judge-says-SF-correct-in-passing-two-tax-measures-14074436.php.

[204] Id.

[205] Brianna Calix, Is Fresno’s Measure P headed to the state Supreme Court? Local judge rules on parks tax question, The Fresno Bee (Sept. 5, 2019), https://www.fresnobee.com/news/local/article234769002.html; see Fresno Building Healthy Communities v. City of Fresno, CV No. 19CECG00432 (Cal. Superior Ct. Sept. 30, 2019); City of Fresno v. Fresno Building Healthy Communities, CV No. 19CECG00422 (Cal. Superior Ct. Sept. 16, 2019).

[206] See Fresno Building Healthy Communities v. City of Fresno, CV No. F080265 (Cal. Ct. App.); City of Fresno v. Fresno Building Healthy Communities, CV No. F080264 (Cal. Ct. App.).

[207] Fracassa, supra note 203; see also Howard Jarvis Taxpayers Association et al. v. City and County of San Francisco, CV No. CGC18568657 (Cal. Superior Ct. July 5, 2019).

[208] Howard Jarvis Taxpayers Association et al. v. City and County of San Francisco, CV No. A157983 (Cal. Ct. App.).

[209] Neil Cohen, California Justices Will Decide Woman’s Challenge of Water Rates, 2019 Law360 31-185 (2019).

[210] Id.

[211] Navigant Consulting Inc., supra note 102, at 70–71.

[212] Michael Hiltzik, A change to Proposition 13 that homeowners can get behind, L.A. Times, Mar. 29, 2019, https://www.latimes.com/business/hiltzik/la-fi-hiltzik-proposition13-split-roll-20190329-story.html. See California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), Ballotpedia (last visited March 2, 2020). An updated version of the initiative is pending signature verification in its qualification process at the time of this writing. Id. If the updated version qualifies, the original version will be removed from the ballot. Id.

[213] California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212.

[214] California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212.

[215] California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212.

[216] California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212.

[217] California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212.

[218] A.G. File No. 2017-055, Legislative Analyst’s Office (Feb. 5, 2018) https://lao.ca.gov/BallotAnalysis/Initiative/2017-055.

[219][219] Jennifer Ito, et al., Research Update: State and County-Level Estimates of Revenue Gains from Changes to California’s System of Assessing Commercial Real Estate 6 (USC Dornsife Jan. 2018) https://dornsife.usc.edu/assets/sites/242/docs/Getting_Real_About_Reform_2017_Update.pdf.

[220] Revenue from the measure will first go to the state’s General Fund to recuperate any reductions in personal income tax and corporation tax resulting from the measure and then second to counties to cover the costs of administering the measure. California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (2020), supra note 212. Of the remaining revenue, 40 percent will be allocated to schools and 60 percent to local governments and special districts. Id. Each local agency will receive an amount proportional to the share of property tax revenue received under existing law. Initiatives and Referenda Pending Signature Verification, Cal. Secretary of State, https://www.sos.ca.gov/elections/ballot-measures/initiative-and-referendum-status/initiatives-and-referenda-pending-signature-verification/ (last visited May 8, 2020); Proposed Initiative 1870 (19-0008A1) § 3(f), https://www.oag.ca.gov/system/files/initiatives/pdfs/19-0008%20%28The%20California%20Schools%20and%20Local%20Communities%20Funding%20Act%20of%202020%29_1.pdf.